Around 2009, a new currency had come into existence, created by a man with the pseudonym Satoshi Nakamoto, and with the name – Bitcoins.
Bitcoins are a cryptocurrency, which is transacted directly, without the use of middlemen, called banks. This also means that there are no transaction fees and there is no need for the user to with his/her real name.
Bitcoins are a digital currency and the transactions happen anonymously through blockchain technology. Over the years, Bitcoins have earned greater acceptance.
In fact, merchants have also started to accept this unconventional form of payment and it can be used to purchase pizzas, web hosting services, and other products.
Let’s understand the basics of bitcoin and how you can earn money with bitcoin.
Basics of Bitcoins
Here are some fundamentals about Bitcoins that you must know to understand Bitcoins
No 1. Why Should We Use Bitcoins?
Bitcoins can help to make anonymous purchases. International payments are also affordable and easy as Bitcoins are not tied to any country or regulation.
There are also no credit card fees that you would have to pay, and therefore, it is increasingly becoming a favorite medium of online transaction. Certain people invest in Bitcoins hoping its value will increase with time.
No 2. Acquiring Bitcoins
There are two ways for a person to acquire Bitcoins, and they are mining and buying on the exchange. Marketplaces, also known as Bitcoin exchanges, allow a person to buy and sell bitcoin currencies.
The largest Bitcoin exchange now available is Mt. Gox. In mining, people acquire Bitcoins by using their computers to solve complex mathematic puzzles and problems. Every 10 minutes, a winner gets rewarded with 25 Bitcoins.
No 3. Owning Bitcoins
Owning Bitcoins is like having a digital wallet. It exists only in the cloud or on the user’s computer. This virtual bank account allows a person to pay for goods and save their money by sending and receiving Bitcoins. However, while bank accounts are insured, Bitcoin wallets are not insured by FDIC.
No 4. Anonymity
While all the transactions recorded in the public log, there is never any information on the buyer and the seller as it is done only with the wallet ID. Transactions using Bitcoins are generally kept secret and it is not easy to trace the person. This, unfortunately, is one of the main reasons for Bitcoin’s popularity for those involved in illegal activities.
No 5. Future of Bitcoin
Presently, Bitcoin is unregulated. There is much potential for that to change. This makes for the unpredictable nature of Bitcoins. Currently, governments do not have control over Bitcoins and they are not taxable, which makes them worried about it as well.
Ways to Make Money Using Bitcoin
Over the years, Bitcoin has been the most effective way to make money; it is also the most overlooked method. Building and managing your Bitcoin wallet is also an effective way of earning money. By running a faucet of your own, you can make anything between $50 and $800 every month.
Setting up a faucet is like paying small amounts to the users, despite gaining significantly by advertisements that are put up on the site. There are other ways of making money using Bitcoin. They are explained below.
Setting up a Bitcoin Website to Generate Passive Income
Starting a Bitcoin website can help you make a lot of money in the form of Bitcoins. This method is different from the faucet. The site will explain the basics of Bitcoins to anyone who is looking forward to learning. The source of earning comes from advertisements and affiliate offers.
Initially, there is a small setup cost involved and the website does not pick up views shortly after it has been launched. In the long run, however, it will hopefully benefit the creator and give the best return on investment.
To know how to start a website that will help you in generating passive income in the form of Bitcoins, make sure to check out YouTube tutorials on the same and do extensive research.
Completing tasks for certain websites will also earn a small amount of money. Whenever people interact with the pages and view the ads, the site owner gets paid. Bitcoin faucets and other websites share the earnings with the visitors.
The earning that a person can have from different websites also varies correspondingly. In some ads, the user will have to feed animals or kill aliens. In some others, watching videos and clicking on ads is sufficient.
But, this method is not always recommended as this is also the most effective way of having your system be infected with malware and viruses as well as adware.
Writing: Cashing in on Your Literary Skills
With the Internet being filled with so many forums and message boards, there is also room for opportunity. Forums can be used to spread the word about products and services. To promote their products, some companies will even pay you.
This generally only requires using an ad code and using your signature. Some websites will pay you in terms of Bitcoins for writing articles and blog posts. Another suitable option is to start a blog.
Placing ads on your blogs will also get you payments in terms of Bitcoins. Translation work can also be done if you are really good at another language as well.
Knowing how to write can earn you Bitcoins. While opportunities are mostly in English, there are opportunities available in other languages as well.
Sale of Products and Services
By selling products, it is possible to earn Bitcoins. If you are accepting payment, accepting it as Bitcoins will help you earn Bitcoins. Overstock.com and other major websites also accept Bitcoin as payment.
For a top-notch marketer, selling products should be easy. For a person who is more inclined towards art and craft, the process is easy.
In case you are not presently selling anything online, using the Internet to sell it now is an innovative idea, as you can start looking at different markets so you can decide which one to venture into. You can also identify the needs of the users.
With the help of Bitcoins, users have become more entrepreneurial in nature and have become bold and ambitious and are working towards making business easier and cheaper.
This is the oldest way to create wealth by using Bitcoins. Bitcoins are actually created by solving and finding the solutions for complex algorithms. These originally create blocks which are added to the public ledger. History of the all the Bitcoin transactions can be found on the public ledger. In short, the public ledger is built by miners who allow the system of Bitcoins to function in the first place.
Miners are rewarded with Bitcoins for the creation of new blocks. More miners can be found in action, allowing the Bitcoin community to constantly grow. People originally used their personal computers to mine Bitcoins.
However, as technology progressed, the algorithms have become more difficult and mining has also become even more difficult. Now, a miner needs to join a pool for Bitcoin mining which utilizes the power of several computers or buy a mining rig that is specially built.
Most users indulge in the mining experience after a thorough calculation of the probability of mining Bitcoin.
Bitcoins were priced at 2500 USD as of the latter half of 2016. In 2017, the price has grown substantially and has been valued at 4500 USD. For those who had invested in it during the low period, they would have probably doubled their original investment.
Due to the way Bitcoins are regulated and the limitation in its availability as well as the nature of the algorithms, Bitcoins should see an increase in their value with time because of the anti-inflationary considerations that come along with it.
Online casinos are pretty straightforward and are based either on luck or skill. When you win, it is a way to earn some money. With Bitcoins, gambling becomes easy and it is also possible to score a jackpot. The problem with gambling is that there is an even higher chance of losing money than there is to winning money. The risk is high in gambling.
Lending is an effective way to make money through Bitcoins. Loaning bitcoins to relevant parties means that you get paid back along with interest. The interest rate varies with the amount of risk involved. For loans that have collateral, the interest rate will be low. Interest rates will be high when the collateral is high.
Handling the Money
Irrespective of your residence country, the income from Bitcoins are taxable. Consult a certified tax counselor to understand the process of managing money generated from Bitcoins.
Bitcoins have become the latest trend as any tech-savvy person would have you know. Bitcoins have also become the way most illicit activities take place in the world currently.
There needs to be some form of anonymity. It has also been the method of taking ransom from organizations as depicted recently by the Ransomware virus. This has made people more cautious about dealing with Bitcoins.
However, issues like anonymity and safety along with traceability are dealt with as there are no bank accounts involved, minimizing the online trail. It is believed to be the future of transactions and trading, with more number of people having awareness about this.