Earning money via bitcoin is one of the reasons so many people are invested in the cryptocurrency. It’s the quintessential “get-rich-quick” scheme. Over the years, people have learned how to buy bitcoin and how to invest them to make a profit. It has gone as far as to see people invest in other altcoins and penny cryptos. The point is, a lot of people are earning money via bitcoins.
Are you thinking about getting into bitcoin as well but don’t know how the money is made? Or are you scared of how the price fluctuates as much as it does? The bitcoin industry can be a little intimidating but don’t worry, it’s not as hard as it looks.
The most common ways people earn money from bitcoin
By now, we must have heard hundreds of stories of people getting rich via bitcoin. Were those flukes? Is there a certain strategy that these people do? In all honesty, the people that get rich via bitcoin is a case-by-case. Some people meticulously planned out their trading strategy, and some got rich by pure luck.
But how does a virtual currency yield a profit? How is it that something was designed to be an electronic cash system, earn people millions of dollars? How is the value of bitcoin determined? There are a bunch of different methods that you can use (and even combine). Here are a few of the most common methods:
Mining
Bitcoin mining has been one of the most basic forms of earning since bitcoin’s creation 10 years ago. Mining refers to the securing and verification of transactions on the blockchain. Miners solve complex cryptographic hashes to verify and secure these transactions. This is no easy feat. Miners, in turn, are rewarded with bitcoin after solving the complex hash. When bitcoin was first invested, the reward for solving a block would be 50 BTC. Every couple of years, that reward cuts in half (to prevent inflation). Currently, the reward is at 12.5 BTC, which is still a lot but you’ll have a lot of competition.
Mining is extremely complex and not recommended for beginners. It also doesn’t yield as much profit as it used to, but it’s still a way for you to earn nevertheless.
Bitcoin faucets
Bitcoin faucets are websites that reward you a small amount of bitcoin for completing small tasks. These small tasks can include clicking advertisements to full MMORPGs that reward you for ranking up. Faucets will usually reward you Satoshis, one of which is equal to a hundred millionth of a bitcoin (0.00000001 BTC). It may not seem like a lot, but it’s a good way to earn some bitcoin to eventually trade – kind of like a starter kit to bitcoin. Plus, some of these sites are actually very entertaining. There are several fun games for everyone to play.
Trading
Trading is the bread and butter for people that earn money for bitcoin. If you’re smart with how you trade, you could earn a lot of money. You’ll have to choose what strategy you prefer (in terms of what will work with your schedule and patience). These are the two most common methods of trading:
- Day trading – This refers to the full-time dedication to trading. In a nutshell, it’s a short-term trading method in which people don’t have open positions overnight. You could hold a coin for as short as a few minutes to a couple of hours. The main idea is that all your coins should be sold before the end of the day in the hopes that you make a small but quick profit. This method requires a lot of time and a lot of dedication.
- HODLing – If day trading is the short-term method of trading, HODLing is the long-term method. HODLing means putting all your faith into your investment and “Holding On for Dear Life”. HODLers can hold their positions for months to even years. These are the people that stay invested despite the rises and falls in the market.
Affiliate programs
Another good way to earn money via bitcoin is through affiliate programs. Affiliate programs are marketing campaigns that incentivize users to spread the word about their product. In terms of bitcoin, there are a lot of bitcoin exchanges and peer-to-peer marketplaces that will pay you to get users on their platform (hence bitcoin affiliate programs). In exchange, you will be rewarded with bitcoin. There are different kinds of affiliate programs but the rewards usually come via commission (from trades done by your affiliates) or bonuses (a bonus that’s given to you upon the signup of your affiliate/referral).
Commission-based affiliate programs are more ideal as some of these programs will allow you to earn from all your affiliates. If you stack up enough (active) affiliates, you’ll be able to make a passive income without having to trade anything.
Bitcoin: the tree that keeps on giving
It goes without saying that bitcoin is a good way to earn money. There are even more and more methods sprouting up every day.