As Bitcoin and Cryptocurrency becomes more mainstream and more people are joining in, lets discuss on how does people earn Bitcoin or other CryptoCurrency/Altcoin?
HOW TO EARN?
There are 5 different ways to earn from cryptocurrency:
1. Buy Bitcoin or Altcoin then hodl (Hold)
A. Bitcoin
You can buy your bitcoin via coinbase (https://www.coinbase.com), Exodus (https://www.exodus.io) or Coins.ph (for philippines). Afterwhich, you hold your bitcoin in your wallet and wait as bitcoin price rockets to the moon and you gain profit :)
B. Altcoin
There are two (2) ways to earn from altcoins:
a. Buy an altcoin during ICO and wait until value goes up before you sell. ICO or initial coin offering is a way for new upcoming coins to introduce themselves and gain support from the masses, people buy-in discounted coins during ICO as part of support and see the progress of the project until it succeed.
Important Note: You need to make sure that you do your due diligence and research about the project and its team, as there are a lot of coins or project that does not succeed in this market.
b. Buy an already active altcoin at its low price and wait until its price gets higher then sell it. there are a lot of altcoins which has potential and is considered to succeed by 2018 (Ethos, Power Ledger, Cardona, Dash, Litecoin, Neo, Iota, etc.)
Buying a high potential coin at a low price is a very profitable as there are coins that jumps from $0.5 to $1.00 in just a weeks time.
2. Trading
This is what most people do, buy bitcoin at a very low price and study the market until it reaches its highs then they sell, as the market fluctuates then traders earn more, as they can do buy and sell at low and highs of the bitcoin's price.
Here is an example, a trader bought 1 BTC at a price of $11,000 then when the price reached $14,000 he then sells his 1 BTC. then the market fluctuates and the BTC goes down to $12,500 and he then bought 1 BTC again, he did earn a profit of $1,500 because of the buy/sell trading.
3. Bitcoin/Altcoin Mining
Bitcoin mining is the process of adding transaction records to Bitcoin's public ledger of past transactions or blockchain. This ledger of past transactions is called the block chain as it is a chain of blocks. The block chain serves to confirm transactions to the rest of the network as having taken place.
Bitcoin nodes use the block chain to distinguish legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere.
The primary purpose of mining is to allow Bitcoin nodes to reach a secure, tamper-resistant consensus. Mining is also the mechanism used to introduce Bitcoins into the system: Miners are paid any transaction fees as well as a "subsidy" of newly created coins.
This both serves the purpose of disseminating new coins in a decentralized manner as well as motivating people to provide security for the system.
Bitcoin mining is so called because it resembles the mining of other commodities: it requires exertion and it slowly makes new currency available at a rate that resembles the rate at which commodities like gold are mined from the ground.
Bitcoin mining can be done by allowing computers solve complicated mathematical encrypted codes, Today, we can only use high powered GPU (Graphics Processing Units) to mine bitcoin.
The profitability of Mining is dependent on the Hashpower of your GPU, the cost of your electricity and the mining difficulty.
Mining Difficulty - It's a measure of how difficult it is to find a hash below the target value (a 256-bit number) during the proof of work.
Mining Difficulty is indirect proportional with the Target Value.
Due to a lower mining difficulty, the bitcoin mining is very profitable right now.
4. Bitcoin/Altcoin Cloud Mining
Two operators, Hashflare and Genesis Mining, have been offering contracts for several years.
Bitcoin cloud mining enables people to earn Bitcoins without bitcoin mining hardware, bitcoin mining software, electricity, bandwidth or other offline issues.
Bitcoin cloud mining, sometimes called cloud hashing, enables users to buy the output of Bitcoin mining power from Bitcoin mining hardware placed in remote data centers.
What are Bitcoin Cloud Mining Advantages?
- No excess heat to deal with
- Quiet because of no constantly humming fans
- No electricity costs
- No bitcoin mining equipment to sell when bitcoin mining is no longer profitable
- No ventilation problems with hot equipment
- No pre-ordered bitcoin mining hardware that may not be delivered on time by bitcoin mining equipment suppliers
Cloud Mining is currently most profitable as there is no need to pay for electricity cost, which is very expensive for most countries (specially here in the Philippines).
Here is an example of the profitability for a 1.81THs contract (Cost: $271.50)
5. Investment/Lending Platform
Investment Platform or Lending Platform is an investment option in the cryptocurrency world where you lend your money (in USD) to a platform for a several days and they provide you with a percentage return every day, some are providing 0.7% to 1.4% per day. Some of which are considered HYIP (High Yielding Investment Program) as they promise very high returns after a certain period.
Some of the Top Lending Program are the following:
- Bitconnect
- Investellect
- USITesch
- Hexabot
Some of the Lending Program/Platform promise to return your capital after the investment period, example is Bitconnect and Investellect, Bitconnect promised to return your principal to you after 299 days and Investellect will return your principal to you after 60 days.
Lending Platform is considered very high yielding, however, the main disadvantage is that the model is not sustainable and most of the SCAM platforms came from this programs.
To conclude, I would recommend the Cloud Mining or Trading approach to earn Bitcoin, why?
- Mining Difficulty is lower as of today and Bitcoin is at a very high price, making cloud mining more profitable than ever.
- Trading is based on your own skills to study and monitor the market.
I hope you enjoyed my content, feel free to include your inputs if I have missed out other ways to earn bitcoin. Thank you.