How to Make Money on Bitcoin
The bitcoin world is filled with stories of people who struck it rich. We’ve all heard about the college kids who invested pocket change in bitcoin back in 2009 – then became millionaires in 2017 when the price skyrocketed to $20,000 per BTC.
Today, the bitcoin world has changed dramatically. Bitcoin is a household name. Pretty much everyone – from teens to millennials to the elderly – has heard about bitcoin.
Fortunately, there are still plenty of ways to make money on bitcoin. In fact, some people believe the industry has more earnings opportunities than ever before.
Today, we’re teaching you how to make money on bitcoin.
The most obvious way to make money on bitcoin is to trade it. If you can consistently buy low and sell high, then you will make money on bitcoin.
Bitcoin is one of the most volatile currencies or assets in the world today. In an ordinary day, the price of bitcoin fluctuates between 5% and 10%. On hectic days, the price can rise or fall by over 30%.
This volatility creates opportunities to earn money. Some people are “day traders” with bitcoin. They take a position at the beginning of the day – like shorting or buying bitcoin. Then, they trade large volumes based on small price movements.
Obviously, trading bitcoin to make money is risky. Longtime bitcoin users will tell you that day traders generally lose, and “holders” (people who hold their bitcoin long-term) always come out ahead. If you plan to make money by trading bitcoin, then you better know what you’re doing.
The other major way to make money with bitcoin is to mine it.
We’re not going to go into huge detail about mining here because it’s outside the scope of our discussion. However, here’s a basic explanation: the bitcoin network requires enormous amounts of computer processing power to operate. The network is decentralized – it’s run by a distributed network of computers worldwide. You can download the bitcoin client today to become a node on the network. As a node, you contribute your processing power to the network. You help process bitcoin transactions.
Why would you give your processing power to the bitcoin network? Because you earn block rewards and transaction fees. Every time you process a “block” on the bitcoin blockchain, you’ll receive all of the transaction fees in that block, along with a fixed block reward set by the bitcoin network.
In the early days of bitcoin – like long before 2013 – hobby mining was an easy way to make money. Anyone with a gaming PC or high-end GPU could download the bitcoin client and begin earning a few bitcoins a month.
Today, things have changed. Bitcoin is a big business. The difficulty of the bitcoin network has increased, and that means it requires more processing power to complete a transaction. Even if you have a high-end gaming PC, you’re not going to generate much profit by mining bitcoin.
If you really want to make money by mining bitcoin, then you’ll want to purchase a dedicated mining rig. Miners like the Antminer S9 are pre-built computers specifically designed for cryptocurrency mining.
You’ll also need to join a mining pool if you want to make any money. In a mining pool, you join together with other users around the world, pooling your processing power together. This gives you a better chance of mining a block and receiving the reward and transaction fees in that block.
Ultimately, even with this method, you’re not going to make a lot of money with bitcoin mining. If you want to really make money through bitcoin mining, then you’ll want to open your own mining farm. You’ll need a lot of upfront capital. You need to purchase dozens – or hundreds or thousands – of miners. You also need to find a warehouse with cheap electricity costs and cooling. If you can find that, then you can make a steady income through bitcoin mining.
Build a Bitcoin-Related Product, Service, or Website
The most successful people in the California gold rush weren’t gold miners. Instead, entrepreneurs like Levi Strauss sold supplies like wheelbarrows, tents, jeans, and pickaxes to miners.
You can take a similar approach with bitcoin: build an informational website for bitcoin investors. Develop a bitcoin-related app. Offer a service to bitcoin investors.
Gamble your Bitcoins
“Gambling” is never a great moneymaking strategy. However, if you’re feeling lucky, then you’ll find plenty of ways to gamble your bitcoins online. Bitcoin casinos can be found all over the internet.
Look for websites that promise to offer “provably fair” gambling. These sites use publicly-verifiable randomizers to ensure each game is fair. Typically, these sites have a house edge of just 51%. And, because these casinos are decentralized, they charge minimal fees compared to traditional online casinos.
Lend your Bitcoins
The term “lending scheme” is synonymous with “Ponzi scheme” in the crypto industry. Notorious scams like Bitconnect have been shut down for operating sleazy lending schemes.
However, there are still some legitimate bitcoin lending programs out there. These systems all work in a similar way: you loan your money to a borrower, then they post bitcoin as collateral. You earn a small return in exchange for letting someone borrow your money. If the price of bitcoin sharply rises during this time, then you might make even larger returns.
Trade Bitcoin for Altcoins
Altcoins, or alternative coins, are any cryptocurrencies that aren’t bitcoin. Ethereum, Ripple, Litecoin, and Stellar Lumens are just a few of the most popular altcoins available today. Bitcoin is already a household name. Many of these altcoins, however, still have enormous room to grow.
Conclusion: You Can Still Make Money on Bitcoin in 2018
Everybody wishes they bought bitcoin in 2009 when it was priced at less than $1. You can’t change the past – you can only change the future. Fortunately, there are still plenty of ways to make money on bitcoin in 2018.