With Bitcoin dominating the headlines for the past few years, it’s no surprise that lots of people are keen to find out how they can make money from the world’s largest cryptocurrency.
Thanks to the coin’s growing popularity, there are now a whole host of ways to make money with Bitcoin.
The method you choose will depend on a range of factors like your technical knowledge, investment experience, how much risk you’re willing to take, and how quickly you want to see rewards.
The most obvious way to make money with Bitcoin is through Bitcoin mining – the process by which new coins are created and transaction information is verified. Mining is performed by high-powered computers which solve complex mathematical problems. Miners are rewarded Bitcoin whenever they add a new block of transactions to the blockchain.
In the early days of Bitcoin, it was possible to make a decent amount of money with limited expenditure. Over time, however, mining Bitcoin has become a lot harder and more competitive. More processing power is required, which means miners need specialised equipment and must fork out a lot of money on electricity.
For those who can’t afford a large mining rig, the only feasible way to make money through Bitcoin mining is to join a mining pool and combine your processing power with other miners.
Investing in Bitcoin
You can invest in Bitcoin by buying and holding the cryptocurrency in the hopes it will increase in value over time.
Bitcoin is extremely volatile and high-risk, so investing is only recommended for people who have a good level of knowledge and can afford to lose their investment. You also need to be patient, as it could take a very long time for your Bitcoin to grow in value.
If you do want to invest in Bitcoin, it’s important to store your crypto in a digital wallet to keep it safe.
Trading Bitcoin
Trading Bitcoin is even riskier than investing in Bitcoin, but if you’re successful, it can be very lucrative. The idea is to buy Bitcoin at a low price and sell it soon after at a higher price, thereby banking the profits.
Trading is only suitable for people who have experience and knowledge of the market, but even then the risk of losing money is extremely high.
Some people choose to run a Bitcoin trading bot, such as 3Commas. A trading bot has a set of parameters and indicators which when met will cause the bot to sell or buy on the exchange you prefer.
Bots are efficient because they minimise human error, eliminate decisions based on emotion, and calculate formulae much faster than people can. However, they can be expensive and aren’t really designed for novice traders.
Another option to consider is contracts for difference, where you buy a contract for Bitcoin without actually buying or storing the coin itself.
Bitcoin lending
It is possible to get high returns from Bitcoin lending, although again it carries a very high level of risk.
By using a website such as Unchained Capital, Bitbond, or BTCpop, you can lend your Bitcoin to another person at an interest rate of up to 15%.
The main risk is that the borrower doesn’t pay you back, meaning you’ll have lost the entire loan amount.
Micro jobs and Bitcoin faucets
Some websites enable you to carry out small tasks in return for small amounts of Bitcoin. The tasks could include retweeting a post, testing a plugin, or watching a YouTube video. Websites to check out include Coinworker, Microworkers, Bitcoinget, and Cointasker.
Similarly, a Bitcoin faucet website dispenses small rewards for visitors to claim in exchange for completing a captcha or other task described by the website. There are also paid-to-click websites which pay Bitcoin if you visit particular websites or view certain ads.
These methods are simple, low-risk ways to earn Bitcoin, although the amount of money you can get is pretty negligible.
Run a signature campaign
Bitcointalk, one of the oldest Bitcoin forums originally set up by Satoshi Nakamoto, enables you to get paid by sponsors for posts you make on the forum. You need to post consistently and achieve minimum word limits to get a decent level of payment.
Get tipped
You can get tipped in Bitcoin by helping other people through platforms such as bitfortip. You can assist with a range of problems like finding a certain pair of shoes or identifying a song in a film.
Conclusion
Whether you’re new to the cryptocurrency market or an experienced trader, there are numerous ways you can make money with Bitcoin. Just make sure you assess the risks and level of knowledge required before you take the plunge.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.