In the 12 years of its existence, Bitcoin has experienced nothing short of remarkable growth. The success of the original cryptocurrency might be baffling to some, but not to others. As an open-source and fully decentralised system, Bitcoin is volatile yet secure.
Since the price of a single Bitcoin has now reached a record high, some major corporate players have taken notice and decided to invest. But where does that leave the average Bitcoin user?
In many ways, in an excellent position to make money. Let’s talk about how you can profit with Bitcoin.
How Is Bitcoin Price Determined?
Before we do a deep dive into all the ways you can turn a profit with Bitcoin, it’s essential to establish why Bitcoin is valuable in the first place. The short answer is that people give it value, but that’s not the one we’re looking for here.
Bitcoin has all the critical attributes of any other currency, regardless of not having any physical properties. It relies on mathematics, the same as any other type of money. More importantly, it has value because it’s trusted and adopted by so many people worldwide.
But simply having value is one thing; assigning it to an actual price is another. Like most things, Bitcoin’s price is determined by supply and demand. As the number of Bitcoin users grows, so does its value.
Once the demand decreases, the same happens to the price of Bitcoin. In the past 12 years, Bitcoin’s price has been on a steady rise, signifying that the interest in this cryptocurrency is rising accordingly.
However, that doesn’t mean the number of bitcoins in circulation changes quickly as well. On the contrary, there is a limited number of bitcoins available at the moment, and they are being created at a very predictable yet decreasing rate of late.
Can Bitcoin Become Worthless?
If you’re ready to take a step towards earning with Bitcoin, it’s natural to wonder if the cryptocurrency can suddenly lose all its value. In short, yes, that can happen.
But the odds are below 0.4%. To put that into context, the chances of a national currency becoming devalued are greater.
It’s also essential to point out that all currencies, crypto or otherwise, should have the potential to fail. If a currency were to be completely fail-proof, it would be difficult to assign it any value.
Ways to Get Paid With Bitcoin
There are many reasons why Bitcoin is an exciting project for many, including the lack of centralised authority, genuine anonymity, and payment freedom.
However, the potential for earning is at the top of the list as well. Here are some of the ways you can earn a significant amount of money with Bitcoin.
Bitcoin Mining
No doubt you’ve heard that mining is the only sure way to turn a profit with Bitcoin. It’s also one of the most challenging options.
The term itself might conjure images of a pickaxe and a mine. But what does Bitcoin mining entail, exactly? It represents the process of solving complex mathematical equations with the help of specialised computers.
Bitcoin miners need to have powerful hardware and specific software to perform this task. When a single mathematical problem is solved, they get newly minted bitcoins as their reward. In many ways, Bitcoin mining is a race and those who solve the problems quickest will get more coins.
Although not strictly true, you can expedite solving the mathematical problems, as the issuance rate of bitcoin is fixed.
Buying and Holding
For absolute beginners, this is one of the simplest ways to make money with Bitcoin. All you have to do is get a Bitcoin wallet, buy some bitcoins, and then let them sit there.
It might seem like a counter-productive way to “earn” money. However, when the price spikes, and there’s a high probability that will happen sooner or later, all you have to do is sell to make a profit.
Trading
The fast-paced equivalent of buying and holding Bitcoin is trading. Basically, trading Bitcoin means relying on its highly volatile nature. This is, undoubtedly, the fastest way to make a profit with Bitcoin. Unfortunately, it’s not for beginners.
You need to have a knowledge of the market, as well as some practice in it. If this is the route you’re interested in, some research is necessary before you start.
Accepting Bitcoin Payments
For merchants, Bitcoin offers a world of possibilities. Adding Bitcoin as a payment method to an online business will speed up the process significantly. The funds you receive go directly to your Bitcoin wallet, and from there, you can sell them or trade them.
Lending Bitcoin
Yes, you can even lend Bitcoin, and there isn’t any centralised authority to tell you how to do it. All the transactions are made easier and faster.
You can loan bitcoins to someone at an interest rate and turn a profit if they’re successful at trading it, for example. There are designated websites that can help you with the lending process.
Bitcoin Micro Earning
Micro earning websites are not a novelty, but those which pay you in bitcoins are. You can watch advertisement videos, complete surveys, and do all kinds of micro tasks and receive minimal amounts of bitcoins for your efforts.
Keep in mind that this is one of the most tedious ways to earn bitcoins. But if you don’t have a problem with it, the number of bitcoins can accumulate relatively quickly.
The Ever-Evolving Nature of Bitcoin
Regardless of its mainstream success lately, Bitcoin is still in its infancy. As digital currency evolves, there’s no telling how you will be able to make money using it in the future.
The methods we’ve talked about in this article are, for now, the most common ways. Bitcoin users can turn a profit.
As more and more merchants see Bitcoin as the preferable form of payment, chances are Bitcoin will evolve even further, and so will the ways to make money.