Cryptocurrency has been growing steadily since its creation, and now, many people know how it works. A cryptocurrency is a form of digital payment maintained by a network of top-tier computers that authenticate every transaction for those who don't.
Bitcoin was the first kind of cryptocurrency ever to be discovered. It has been growing in popularity and will soon contribute significantly to the global economy, just as equities have. It’s already used as an online currency by major brands.
You may want to start investing in Bitcoin, but it can be difficult to know where to start. Here are the top six ways of using Bitcoin to generate wealth.
What is Bitcoin?
First things first! What’s all this fuss about Bitcoin, and what exactly is it?
Simply put, Bitcoin is a form of digital currency. Like all other digital assets, it has two main qualities.
- It is built from Blockchains
- It reflects a firm conviction of why people believe in digitalization
Satoshi Nakamoto founded it in 2009, and since then, millions have participated in mining and owning it. This has made it the most popular type of digital asset in the entire world.
As it keeps growing in popularity, the future of Bitcoin is bright, provided that various world governments enact regulations that will encourage its usage. As I speak, the value of 1 Bitcoin is estimated to be worth over $6000.
Once governments enact regulations that favor its usage, its value will spike up, making a massive impact on the world’s economy.
Using Bitcoin to Generate Wealth
It’s shocking to know that the growth of Bitcoin is primarily attributed to Millenials. Up until now, many investors have proved to be skeptical about Bitcoin and all other forms of cryptocurrency.
Research shows that almost half of the world’s millennials are comfortable owning and investing in Bitcoin. Those between the ages of 25-40 years are the most interested of all age groups.
As technology advances, everything is becoming digitalized, making Bitcoin a more attractive investment for millennials.
This information suggests that millennials still have a great deal of potential to take bitcoin to the next level.
Why are millennials so interested in Bitcoin? Owning and investing in Bitcoin could generate an immense amount of wealth in the long run.
Yes, you read that right.
Here is how you can generate wealth using Bitcoin.
1. Through Bitcoin mining
Bitcoin mining was the first-ever method invented for obtaining Bitcoin. In the recent past, bitcoin mining was a fast and straightforward procedure. Now, things have changed.
To participate in mining Bitcoin today, you’ll need a super-powerful computer to solve complex mathematical problems. Once you get one, you'll be tasked with cracking a particular code, after which you’ll be rewarded with newly minted Bitcoin.
Due to the constant influx of new miners on the crypto scene today, mining has become even more difficult. As a result, mining has become more competitive and complex.
If you want to survive in such a competitive environment, you can join mining pools and mining clouds to combine your efforts. In any case, Bitcoin mining involves a lot, so before you engage in mining, make sure that you do your research extensively to know how it all works.
Otherwise, you risk losing a lot of money, all to get rich faster. Additionally, it is important to know that mining Bitcoin takes a lot of time.
2. Buy and hold
One of the easiest and beginner-friendly methods of getting Bitcoin is by buying it.
To buy Bitcoin, you’ll need to:
- Sign up for a BTC wallet
- Buy your BTC through bank transfer or other various modes of payment
- Hold on to your BTC as you study and analyze market trends to know the most suitable time to sell.
Even though this process is easy, ensure that you first know your government’s policies concerning buying and selling Bitcoin in your country.
For instance, in China, it is illegal to make any sort of Bitcoin transaction. If caught, you may face serious charges that could otherwise make you suffer huge losses. So before you get involved, be sure you do enough research.
3. Trading BTC markets
Bitcoin can be traded in much the same way as other financial assets in the financial market. Essentially, everything about trading Bitcoin is the same here except that you do it with fellow Bitcoin owners.
In this market, you can trade and make profits through:
1. Day trading
Day trading entails a lot. You’ll have to be good at analyzing markets and chart patterns to be profitable. There are three types of market analysis that you can do to spot trading opportunities from the charts.
You can conduct:
- Fundamental analysis
- Technical analysis
- Sentimental analysis
Additionally, you’ll need to have a deep understanding of candlestick patterns and the psychology behind them. After you have mastered the art of analyzing chart patterns, you can now easily identify trading opportunities and maximize them to make money.
You should know, however, that day trading profits are not that high. Nevertheless, cumulatively, they may add up to be quite significant.
2. Swing trading
Here, the same-day trading principles apply, only that you will be going long or short on higher time frames.
For instance, as a swing trader, you can buy Bitcoin at a low price and ride along with the price as you watch your profits grow through time. However, once prices reach an all-time high, you may decide to sell your Bitcoin, enabling you to make more profits as the markets retrace their way down to support and resistance levels.
3. Arbitrage trading
Arbitrage trading is similar to swing trading and day trading, except you'll be looking at more money-making opportunities from various platforms.
Essentially, you buy your Bitcoin from a particular exchange platform and sell it to a different platform, thereby allowing you to earn profits up to 40% more of what you invested.
Even though trading BTC markets could help you earn lots of profit, a lot of skills and expertise are required. So before investing with real Bitcoin, first, sharpen your trading skills by trading demo accounts. The good thing is that demo accounts can also operate in the real-time market.
4. Accepting Bitcoin Payments
This can only work if you run a brick-and-mortar business or an online store.
All you need to do is integrate Bitcoin payment into your payment system. This way, customers can pay for your product or service through Bitcoin, allowing you to make significant bitcoin over time.
Also, by integrating Bitcoin into your payment methods, you can attract more customers who don’t have bank accounts or use credit cards. In the long run, your business will end up being profitable, therefore, creating more wealth than originally anticipated.
5. Lending BTC
One of the best ways to create wealth is by investing money. “Let your money work for you." The same principle applies to cryptocurrencies like Bitcoin.
Due to the decentralized nature of Bitcoin, you can easily loan someone without having to go through complex validation procedures as you would in financial institutions. Instead, all you need to do is transfer your bitcoin to someone else’s wallet, after which they are obligated to return it at an interest.
The good thing about lending BTC is that you control the profit (interest) you earn. If you want to make more profits, you can charge someone higher return interest rates. Bitcoin is highly scarce, so it is your right to charge whatever interest rates you wish as long as you are reasonable.
6. Getting tipped
If you are looking for a fast method to earn Bitcoin, perhaps this one is for you. How it works is pretty simple.
If you are compassionate about helping people, Bitcoin could help you earn some wealth! So how exactly does this work?
You just have to help someone find a solution to their problem via an online platform, and that is it. Through platforms like Bitfortip and Twitch, you can easily find clients you can help, and in return, they may tip you with Bitcoin.
Also, if you run a store, you could potentially be tipped by your customers.
If you’ve been looking for a way to generate wealth and don't know where to start, Bitcoin might be the answer. The cryptocurrency has already made major contributions to the global economy as an online currency and it's only projected to go up from here. Start using these six ways for using Bitcoin to generate that could help you get started. Which of these tips have you already tried?