Bitcoin (BTC) still remains the number one cryptocurrency, so it’s a good idea to start your crypto journey with it. To clarify the basics, here are some beginner’s tips:
- Bitcoin is a digital currency, so it can be used as a physical asset. Bitcoins are stored in crypto wallets: websites or software-based apps similar to traditional e-wallets and hardware devices like flash drives.
- Bitcoin is the most expensive cryptocurrency, priced at $8,000 as of end-July 2018. Still, it is divisible and you can buy or earn fractions of Bitcoin. The smallest unit is called Satoshi and amounts to 0.00000001 BTC.
- Bitcoin is the largest cryptocurrency but there are 1600+ others, according to CoinMarketCap. For risk diversification, better get some other coins apart from Bitcoin.
How to earn Bitcoin: 4 main ways
Here we list the most reliable and newcomer-friendly approaches which allow getting BTC easily.
1. Mining
Bitcoin is based on the Proof-of-Work algorithm which means that the entire system relies on the computing power of miners, who validate transactions and release new coins into circulation. Miners use specific hardware to solve math tasks and create new blocks in the Bitcoin blockchain, for each successfully solved block they receive BTC as a reward. With each new block created, the difficulty of solving tasks increases, so miners must spend more and more energy to receive new coins.
- Traditional mining. To be involved in it you need to get your own mining equipment, set up a mining rig, and maintain it. Consider expenses on electricity bills, as well.
Examples of mining equipment: Antminer, Dragonmint, Avalon.
- Cloud mining. As the name implies, you rent power from remote equipment controlled by a cloud mining service provider. Cloud mining requires initial investment to pay for a contract only. It carries more risks than traditional mining as you need to rely on a third party.
Examples of cloud mining companies: Genesis Mining, HashFlare, Hashing24.
2. Investing & trading
Probably, the easiest way to start earning Bitcoin is through investing and trading. For this, you will need fiat money – USD, EUR or other local currency – to buy the first portion of crypto. Where? Check Coinbase, one of the most popular exchanges. If it doesn’t support your country, try CEX.IO or Kraken. Also, explore LocalBitcoins, a P2P network which matches buyers and sellers directly.
Do you remember about wallets? Fine, you still need one. Send BTC from the trading platform to the wallet if you want hold crypto. This strategy is simple because you should wait until the moment when the price will go higher. Watch the market, follow its movements to catch the right time for selling your crypto. Holding is usually a long-term activity as it focuses on large profits. Let’s say, in early 2011 one Bitcoin was $1. Seven years after, Bitcoin saw 7000% growth.
Trading is more complicated to do. Basically, you have to find an exchange or exchanges, which support different cryptocurrencies. They are traded in pairs, for instance, Bitcoin/Ethereum or Bitcoin/Litecoin. Traders monitor rates to buy coins at a lower price and sell higher. It requires a lot of research, skill, and some luck. This method may also bring more money in the short term than holding.
Sure, you can combine these approaches by keeping some BTC for the long run and trading the remainder on a daily basis. But remember the fundamental law of the crypto market: Invest only the amount of money which you are ready to lose.
3. “Free” earning
This approach is based on using faucets, ad-watching sites, clickers and participating in various giveaways. Bitcoin faucets pay users in crypto for completing microtasks such as watching videos, visiting affiliate websites, etc. The real income is about $1-2 per day, so it’s suitable for getting initial capital only.
Giveaways aka airdrops and bounties are a bit different. With them, users may get coins by signing up for new projects, posting on social networks, or inviting new participants (this stands for affiliate programs). However, it’s almost impossible to get BTC this way directly. To earn some, you will still need to trade these new cryptocurrencies against Bitcoin at altcoin exchanges.
4. Gambling
There’s also a way to get Bitcoins as casino bonuses. Some online gambling websites let users deposit crypto including BTC. Generally, you will need to exchange it for casino tokens to start playing but it’s still possible to withdraw Bitcoins after the reverse trade.
For beginners who want to gamble without BTC at all, the best way is to get a no-deposit bonus. Some casinos offer “free” money for new accounts. Yes, they will really give you some Satoshis, but the catch is that you will need to wager ten times more (at least). Only after such wagers, the system will allow to cash out.
Bitcoin gambling is risky and requires a lot of luck. Consider this fact.
Other ways
Apart from the most popular options like mining or investing, there are a few other methods suitable for some users.
Let’s say, working for BTC and accepting BTC donations. Developers, copywriters, and designers may receive their salaries in Bitcoin, and this is a common practice nowadays. It works for crypto-related jobs mostly. Also, bloggers and website owners place widgets to accept Bitcoin donations.
Another way is lending. It’s valid if you have some coins already. The principle is similar to regular lending – you lend BTC at interest to someone directly or use specific platforms like Bitbond. Remember about frauds and deal with legit and trusted partners only.
