Bitcoin, as a cryptocurrency, has been subject to mainstream debate for quite some time now. People analyze its past and speculate about its future for a wide variety of reasons - some people want to know the history of cryptocurrencies, others are curious about possible investment opportunities.
Whatever your reason would be, in this guide we’ll talk about different ways of how to make money with Bitcoin.
We’ll talk about the different ways of how to profit from Bitcoin - but first of all, we’ll ponder on why Bitcoin is so popular in the first place. Then, when we understand the history (or at least the super short version of it) of this cryptocurrency’s emergence and rise to power, we shall explore its profiting opportunities.
Note: It doesn't matter if you make a smart investment and earn a lot of money from it if you have an unsafe wallet that can be easily hacked. That said, choose a reliable Bitcoin wallet. The most recommended options include Ledger Nano S and Trezor Model T.
Table of Contents
The Short Version of Bitcoin History
Bitcoin was created back in 2009 by someone (or some group of people) known by the pseudonym of Satoshi Nakamoto. At the time that it saw the light of day, nobody had even heard of cryptocurrencies, let alone encountered one.
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Bitcoin's infant and teenage years were pretty rough - it failed to gain significant traction and attention, even though its prices fluctuated for what (at that time) seemed quite a bit. No one was still wondering how to make money with Bitcoin.
Finally, at the beginning of 2017 Bitcoin breached the benchmark of $1000. In just a matter of a year, it managed to almost reach the $20,000 checkmark.
Needless to say, this was huge - everybody either stood with their chins reaching the floor or poured everything they had into Bitcoin - it seemed like an unstoppable force that kept on increasing its momentum every single day. If you’ve recently checked the Bitcoin price charts, however, you know that things took a different turn.
The Fall of Bitcoin(?)
At the beginning of 2018, Bitcoin’s price was around $11,000, then reached a shocking low of almost $6000. At the time of writing this guide, Bitcoin is currently worth $6400.
UPDATE 2020: Two years later we can see that Bitcoin is performing pretty well. The current pricing of the cryptocurrency is $10,292 and, while there are some noticeable ups and downs, the price seems to remain pretty high, just like at the beginning of 2018.
What caused a crash of this magnitude? Well, there are many speculations.
People who often look at how to make money with cryptocurrency will probably know what the Bitcoin price chart looks like:
Does it, perhaps, remind you of something? A… tooth, maybe?
This type of diagram is called a “shark tooth” diagram. It means that a cryptocurrency’s (in this case - Bitcoin’s) price rose and fell so fast that the path it took on the chart resembles a sharp shark tooth.
This is also called a “burst bubble”. A famous economist was even quoted saying that Bitcoin was the “biggest bubble burst in history”. Reasons behind this are speculated to be the built-up hype, lack of support for the blockchain, market manipulations and many, many more.
Whatever the case might be, it is obvious that if nothing else, Bitcoin took a huge dive from which it is currently trying to recover. Anybody looking at how to make money with Bitcoin should probably keep these things in mind.
How to make money with Bitcoin?
So now that you know a couple of things about the rise and fall of Bitcoin, we can finally move into the money-making methods.
There are quite a few methods to make money with the help of Bitcoin, but in this guide, I’ll cover just the main ones - if I had to list them all, this guide would be at least three hundred pages long.
The list isn’t composed in any specific order. Some methods work better (or faster) than others, but - generally - it depends on the person.
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Method #1 - Buying Bitcoin
No, I’m not joking.
There are huge groups of people who “invest” into Bitcoin by simply buying it. This is a risky method, of course, but probably the simplest one to perform.
There are a couple of types of such investors. Some people just buy a certain quantity of the coin and forget about it for a year… or ten. These people usually have no real intention to profit short-term - they often believe in the successful future of cryptocurrencies and hope that their investment now will one day bring them a tenfold profit.
Another type of Bitcoin investors are the people who do loads of research, read all of the available predictions on how to make money with cryptocurrency and spend weeks analyzing data and statistics. These people tend to have a very specific time frame in mind - most of the time, they are looking to invest short-term and just need to know when to do it.
Also, these investments tend to be smaller when compared to the long-term ones - after all, people invest having done a ton of research beforehand, but if their investment fails, they could just move on to the next time frame.
If you’re thinking about how to make money with Bitcoin or how to make money with cryptocurrency in general, buying Bitcoin can be a great starter - or a disastrous one. It can make you huge amounts of money real fast or might drive you to the brink of debt. It all depends on one single factor - the amount of research you’ve done beforehand.
Tip: You shouldn't invest the amount of money that you cannot handle to lose.
Method #2 - Accept Payment in Bitcoin
Have you heard of Fiverr? It’s a site where people pay $5 for some sort of a service done by other freelancers. Now take this same concept, but imagine Bitcoin coming into the place of USD.
All you need to do for this method to work is as follows:
- Think of a skill you’re good at. This can frankly be anything - starting from copywriting and digital marketing to painting or singing. Pick your strongest quality (or qualities) and think of ways you could monetize them.
- Create a cryptocurrency wallet. If you’re reading a guide on how to make money with Bitcoin, chances are this step seems obvious and you’ve done it long ago. But just in case, let this serve as a reminder - a crypto coin wallet holds your cryptocurrencies safe and ready to use, just like a wallet for your physical money. If you still haven’t got one - research and create it ASAP! In case you're interested in finding the most secure cryptocurrency wallets in the market, check out Ledger Nano S and Trezor Model T.
- Find a way to charge people. A good place to start is to offer your services on online forums and marketplaces, stating that you only take payments in the form of Bitcoins or other cryptocurrencies. Do this long enough, and you might eventually want to create a designated website for this same purpose and teach others how to make money with Bitcoin.
If you’re thinking about how to profit from Bitcoin (and if you’re serious about it), doing research is going to be unavoidable. Without it, it’s like trying to drive a car at night with the headlights off - sure, you MIGHT make it, but the chances are not worth the risk.
Method #3 - Mining
If you want to mine individually (meaning, with your mining rig), it might not be the best way of how to make money with Bitcoin. Bitcoin is considered to be one of the tougher cryptocurrencies to mine since it’s a subject of mainstream success and a lot of people want to pitch into the hype, yet there’s a limited supply of it.
A single rig, as good as it could be, might struggle to produce significant profits, especially when you consider the electricity and maintenance prices.
Cloud mining, however, has become very popular over the last few years. It’s a great alternative when it comes to mining because you don’t need to buy any hardware or software, assemble or even DO anything - all you need to do is pay a one-time fee for a contract and that’s it!
Usually, at the end of every month, you’ll receive your earnings. The amount will be based on your plan of choice and the electricity bill at the facility that the cloud mining service is based on.
Overall, cryptocurrency mining is a very popular method for people searching on how to make money with Bitcoin. It does require some knowledge and expertise in the field to be able to perform it successfully (especially if you want to build your rig), but the results are definitely worth the effort.
Method #4 - Investing
And no, not the buying-bitcoin-and-then-selling-it type of investing.
There are quite a few choices you have when it comes to investing in Bitcoin. You could make money with Bitcoin by investing in startups, companies, stocks, or even blockchain development itself.
Blockchain-based startups are a very popular choice when it comes to investing in a cryptocurrency-related field. Already, some notable startups have made it into mainstream success (i.e. Brave’s Basic Attention Token).
You would need to do some digging and find out the next best thing, but if you’d be right and invest in the startup while it’s still in its early days of infancy, you might just hit the jackpot and grow your profits to the roof.
Companies that deal with Bitcoin or blockchain development (or research) are also a good option for investments. You’d have to look over their info - White Paper, their goals and work ethics, results, statistics, etc., and if their overall view seems attractive, you could think about investing in their projects or the company itself.
You should be careful with investments, though - especially when it comes to cryptocurrencies. It is no secret that the cryptocurrency market is a very unpredictable place.
Always do your homework and research the objects that you plan to invest in, or else the question of “how to make money with Bitcoin?” might turn into “how to get out of debt (no Bitcoin)?”.
There are loads of various methods of making money with Bitcoin, both directly and indirectly. Direct methods would be buying the cryptocurrency or trading it, while an example of an indirect method would be crypto mining. It's only natural if you get confused at the beginning - cryptocurrencies are a tough nut to crack!
As I’ve stated in the beginning, the preferences for any of these methods lie solemnly on the person using them. If one person finds a cloud mining a gift sent from above, another could think it’s all a major scam and want to do everything on his or her own.
One piece of advice: RESEARCH. Do a lot of research. If you put in the effort, you'll pick the right method in no time. Forums are a great place to start. Join Facebook groups, participate in their chats. Don't be afraid to ask questions.
Additionally, it is worth noting that these were just a few, hand-picked methods of how to make money with Bitcoin. If none of these methods suit or seem appealing to you, you could always try and search for alternatives, such as day trading, crypto lending, etc. The choices are truly limitless. Don't be afraid to experiment and try new things!
Even though cryptos have been around for quite some time now, the world of cryptocurrencies is still a mystery to many people. Every day there are new analyses, statistical info and even new coins that enter the community and the market. It is no easy feat, but if you do decide to follow through and try one of these methods to make money with cryptocurrencies (or, more specifically, Bitcoin), I wish you the best of luck!
Just remember, if you decide to make a long-term investment, it's crucial to not only choose reliable crypto exchanges (such as Coinbase or Simplex) but also keep your cryptocurrencies in secure wallets, such as Ledger Nano S and Trezor Model T. They're both hardware wallets and keep your private keys offline.