Since bitcoin’s recent highs, the cryptocurrency has once again awoken the interest of the media, regulators, and speculators. Both the reputation and the regulatory environment for bitcoin is turning for the positive around the globally and speculators are once again investing heavily in the world’s first decentralised digital currency. In this post, you will discover ten ways to make money with bitcoin to help you get started with becoming a part of the bitcoin community or, at the very least, earn a bit of extra money by leveraging everyone’s favourite cryptocurrency.
Buying and Holding Bitcoins
If you want to start earning bitcoin you first need to obtain a bitcoin wallet, which is used to send, receive and store your bitcoins. You can obtain one from an online based service such as Coinbase or Blockchain.info. These are two of the most used bitcoin wallet and come with an online and a mobile version. Having said that, the safest way to store your bitcoins would be offline. For that, you could use a so-called “cold wallet” such as Trezor.
Once you have a wallet service, you can establish multiple bitcoin addresses, which allow you to receive bitcoins from others. No real life addresses are necessary, just your bitcoin address will suffice for any digital currency transfers. All transaction can then be viewed on the blockchain at Blockchain.info. This is why bitcoin is considered as a semi-anonymous digital currency as transactions are linked to bitcoin addresses but who is behind those addresses is unknown.
Mining bitcoins can be quite complex and is usually not recommended for beginners. The process entails the use of sophisticated machines that are expensive and consume quite a lot of electricity to solve mathematical algorithms in exchange for bitcoins. Bitcoin miners enable bitcoin transactions by sharing their processing power. In exchange for enabling the bitcoin network to function, they are rewarding with new bitcoins. This is what “mining” refers to.
Having said that, it is no longer considered lucrative for individuals to mine at home using mining equipment and the shift is being made towards more large-scale operations.
If you do want to engage in bitcoin mining and are willing to invest in expensive mining hardware, it is strongly advisable to join a mining pool. In a mining pool, miners pool their resources together and share their hashing power with the aim of solving a block and dividing the reward equally, depending on the number of shares contributed by each person. It is an effective way to motivate small-scale miners to continue their involvement in mining activities. Some popular mining pools are:
Bitcoin Cloud Mining
Alternatively, you could engage in bitcoin cloud mining. Bitcoin cloud mining is the process of mining bitcoins using a remote datacenter with shared processing power. Cloud mining is beneficial to individuals as it allows them to carry out their mining activities without having to manage the mining hardware.
It enables you to earn bitcoins without mining software, mining hardware, bandwidth, electricity or other offline issues. However, there is a cost associated with cloud mining as a service and this will have an effect on your bottom line.
The most reputable cloud mining company is Genesis Mining. I personally have a small bitcoin mining contract running with them. Having said that, the time it will take you to break even on bitcoin cloud mining can easily take well over a year and that is assuming the price of bitcoin doesn’t drop. If you want to play your part in the bitcoin network and want to mine at a low cost, then cloud mining is a good option. If you are looking for a lucrative investment, however, you are much better off just buying the cryptocurrency itself or engaging in peer-to-peer bitcoin lending.
If you who enjoy playing games or simply don’t mind looking at a few ads, you can visit bitcoin faucet websites. These websites generate revenue from ads placed on their pages and pay out a small amount of the ad revenue to its users. All you need to do is sign up with your bitcoin address and start earning a few cents worth of bitcoin every day.
While it is a very slow way to earn bitcoins, these sites allow anyone new to bitcoin to get obtain bits of the crypto-currency for free.
Completing Microtasks for Bitcoin
You can also earn bitcoins by completing micro-tasks on the following platforms:
Bituro is a smartphone app that pays you in bitcoins for small tasks, such as watching promotional videos, filling out surveys and testing apps.
Bitcoin Reward enables you to earn for watching videos, downloading and testing apps, filling out market research surveys and other minor tasks.
Coinbucks is a smartphone app that allows you to earn bitcoins for playing mobile games, downloading smartphone apps and completing online promotional offers.
Day-Trading Bitcoin for a Profit
If you love the financial markets and regularly trade online then day-trading bitcoin could be a way for you to make money with bitcoin.
When it comes to bitcoin trading, the basic speculation strategy applies. You buy when the currency is low and wait for the price to increase before you sell it a higher price to generate profit. It is important you understand market trends and price dynamics if you want to make successful trades and as bitcoin is primarily headline driven it is important to follow bitcoin news closely when actively trading the digital currency. Some exchanges also allow you to trade bitcoin using leverage, which can help you increase your trading profit substantially but also possess a much higher downside risk.
You can also trade in bitcoin via arbitrage; buy it cheap on one exchange and sell it at a higher price on another exchange.
Becoming a Market Marker on Localbitcoins.com
Localbitcoins.com allows you to trade Bitcoins for fiat currencies through individual trades, sometimes referred to as over the counter trading or OTC. Most people are comfortable selling bitcoins over the counter as the transactions are fast and they offer diverse methods of payment.
Hundreds of bitcoin traders from around the globe are making profits on Localbitcoins by becoming market makers (buying and selling in Localbitcoins). Here is a brief guide on how to sell bitcoins on LocalBitcoins.com.
- First, you sign up to LocalBitcoins.com
- Then, you need to create an online sell advertisement for bitcoins. When designing an advertisement you select a payment method, set you pricing limits and outline your terms of trade as a free-form message.
- Next, you need to replenish your wallet with bitcoin, for you to order customers to be able to access trade requests from your advertisements.
- Once a buyer opens a trade with you, the full bitcoin amount is automatically transferred from your wallet to escrow.
- When the buyer has made the payment and pressed the Mark payment complete button you will receive an SMS alert or a notification via email informing you that payment of the trade has been done.
- Upon confirmation of the payment, the bitcoins are released to the buyer from the escrow to his Localbitcoins wallet.
- The last step is to leave feedback for the buyer so as to gain reputation and make some trades.
Depending on the country, bid/offer prices vary greatly. If you are making markets in less saturated bitcoin markets, you can make easy money as a market maker on LocalBitcoins.
Gambling in Online Bitcoin Casinos
If you like gambling online and want to earn your gambling winnings in bitcoin, then you can choose from a variety of bitcoin casinos and gambling sites. Leading bitcoin online gambling sites include Starcoin, Crypto Games, BetKing, and vDice.
When you like playing dice, roulette, poker, lottery or slots, the bitcoin online gambling market is more than big enough to satisfy your gambling needs.
Investing in Bitcoin Peer-to-Peer Loans
You can also use your bitcoins to lend them to entrepreneurs and small SMEs using the bitcoin peer-to-peer lending platform Bitbond. You can generate excellent returns by lending through Bitbond.
Peer-to-peer lending refers to a method through which individuals, startups, and SMEs can borrow from individuals without the use of a traditional financial intermediary. This enables financing for those who are finding it hard to secure a loan from a bank and generates strong fixed interest returns, with low transaction fees and a low correlation to stocks and bonds for investors.
However, remember to always diversify your risk by lending to a number of borrowers as opposed to putting all your money into one loan.
Selling Goods and Services in Exchange for Bitcoin
And finally, one of the most common ways of earning bitcoins is by selling goods or services in exchange for bitcoins. Some of the things you can sell are clothes, old gadgets, cars and even homes in exchange for bitcoin. Presently, there a lot of sites that offer platforms for people to buy and sell products in exchange for bitcoins.
Two popular sites to sell products in exchange for bitcoin are Bitify and Purse.
- Bitify: Bitify.com is somewhat likened to the Ebay for Bitcoin. It uses an auction system to sell items in exchange for bitcoins. Bitify also offers escrow services so that buyers can ensure the goods are delivered to them first before releasing the bitcoins. The use of the escrow service is optional for buyers at a 1% fee. Sellers, on the other hand, have a 2.5% fee on the total sale price of the items. Premium advertisements are charged at 1.5% of the total cost.
- Purse.io: Individuals with amazon accounts can sell items at a discount on Purse. Buyers who use bitcoin advertise their wish lists on at their Purse.io accounts.
Alternatively, you could sell services, as a freelancer for example, and get paid in bitcoin. There are numerous bitcoin-based freelancer platforms where one can offer their services, such as BitGigs or Coinality.