Bitcoin’s detractors expected this impressive new decentralized currency just to disappear. They were wrong. It’s 2020, and Bitcoin is still gaining in popularity. Read on to find out how people are still making money with bitcoin.
Bitcoin Investing
One of the easiest ways to make money with bitcoin is to purchase it and hold it as an investment. Like any investment, bitcoin holding comes with some risk. This strategy is best for those who already have some traditional investment experience and want to diversify their portfolios.
It’s best to view bitcoin investing as a long-term strategy. The value of this cryptocurrency is volatile, so day trading comes with far more risk. Those who want to start investing should investigate safe storage solutions like hard wallets.
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Bitcoin Lending
Bitcoin lending can provide high returns, but it also comes with some risk. The greatest of those risks is that the borrower will not pay back the loan amount. Lenders can get around this problem by working with a reputable peer-to-peer lending platform. They can also find tips from xCoins about how to get started buying bitcoin and making money from crypto lending.
Trading Bitcoin
Bitcoin trading is by far the riskiest way to make money off this popular cryptocurrency. It’s also the strategy that carries the highest potential for lucrative rewards. As with stock day trading, bitcoin day trading involves purchasing small or large amounts of cryptocurrency when prices are low then selling it as soon as they rise. Traders then bank the profits and reinvest when prices fall again.
It bears repeating that bitcoin trading comes with a high level of risk, even for experienced investors. Get a feel for the market before investing any large amount of money in bitcoin for trading.
Bitcoin Mining
Bitcoin mining used to be one of the easiest and most lucrative ways to make money off of cryptocurrency. Unfortunately, the days when any random crypto enthusiast with a personal computer could mine bitcoin are over.
The process still works the same way. Bitcoins are created by setting computers to solve complex algorithms. Bitcoin miners receive some bitcoin each time they add a transaction to a blockchain. The difference is, today’s mining algorithms are much more complex, and the market is more competitive.
Mining bitcoin in 2020 requires specialized equipment and tons of processing power. It also requires access to a lot of electricity. Some small-scale bitcoin miners still operate in today’s competitive markets by joining mining pools. The payoff is significantly lower than it used to be, though.
Bitcoin Micro-Jobs
Since bitcoin’s rise to popularity, sites have been popping up that offer payment for micro-tasks in satoshis. These tasks include things like retweeting posts, watching videos on YouTube, or testing plugins. Don’t expect to make a fortune on bitcoin micro-jobs. They pay abysmally low.
The benefits of bitcoin micro-tasks are that they’re zero-risk, and they give people new to bitcoin a way to earn enough cryptocurrency to start trading, lending, or investing. Those who are serious about making money with bitcoin usually forgo this step and simply buy it using fiat currency. That’s also a good option as long as buyers find a reputable trading or lending platform.
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Bitcoin Faucets
Bitcoin faucet websites operate in similar ways to micro-task sites. They offer small rewards in the form of satoshis for completing minor tasks on the sites. Those tasks can include viewing ads, clicking on links to websites, or completing captchas. As with micro-jobs, bitcoin faucets offer very low pay, but they come with next to no risks.
Accept Tips in Bitcoin
For those who already work online, accepting tips in the form of bitcoin instead of fiat currency is a perfect solution. It won’t make anyone rich, but it will let those who are new to the crypto world get a foot in the door without risking any of their own money. Some online workers even offer their services for full bitcoin payments.
Methods That Don’t Work
While there are plenty of legitimate ways to make money with bitcoin, there are just as many scams. Some are fairly obvious, but others can be difficult to spot, especially for those who are new to using bitcoin. Here’s what to watch out for.
Fake Exchanges
Fake bitcoin exchanges take advantage of investors’ ignorance. They look like legitimate sites, but users won’t get any bitcoin in exchange for their hard-earned cash. To avoid this problem, stick to reputable exchanges and investigate new ones by checking their reputations in online forums.
Ponzi Schemes
Ponzi schemes date back to well before the bitcoin revolution. They involve taking money from new investors and using it to pay out previous ones. Some bitcoin Ponzi schemes last for years before the frauds are discovered. Never respond to someone offering bitcoin in exchange for recruiting investors. The only people who win in these pyramid schemes are the con men who start them.
Fake Cryptocurrencies
Bitcoin is not the only legitimate cryptocurrency. New ones are popping up all the time. Unfortunately, not all of them are legitimate. It’s best to stick with trading well-established cryptocurrencies.
Malware Scams
Some seemingly legitimate bitcoin exchanges are actually fronts for malware scams. When users sign up, they download malware to their computers. The scammers who run the sites then use it to gain access to personal and financial information. The extent of damage from malware scams can be even greater than that associated with other forms of bitcoin fraud. Never click on links from random email addresses and always vet a new platform by contacting the company directly.
Final Thoughts
It’s still perfectly possible to make good money on bitcoin, even more than a decade after the cryptocurrency was initially introduced. That speaks volumes about its lasting value. As long as investors, traders, and lenders stick with verified exchanges and lending platforms, and they’re willing to accept a reasonable amount of risk, the payoffs can be impressive. Just make sure to keep an eye out for scammers and always vet new platforms before clicking on links or offering financial information.
