Not too long ago, bitcoin was the buzzword of the day. Readers shouldn't think that just because they don't hear this crypto giant mentioned every 20 minutes anymore that it's no longer relevant. In reality, bitcoin remains one of the most popular cryptocurrencies and bitcoin investing can still be quite a lucrative venture for those who take the time to do research the markets.
Of course, it wouldn't make sense for most readers to just jump in head-first and start investing every dollar they have in bitcoin. After all, the majority of interest in bitcoin is still speculative and cryptocurrency can't be used at most grocery stores, although there are some retailers who are already accepting it. That doesn't mean they shouldn't start learning how bitcoin investing can help them diversify their investments and make some extra money with bitcoin. Read on to find out how to get started.
How to Save Bitcoin
There are a few methods for acquiring bitcoins. These include bitcoin mining, crypto trading, and simply buying bitcoin online using credit cards, debit cards, PayPal, or another accepted payment. These solutions will all be discussed in some detail below but first, let's take a look at where all of those bitcoins will go once readers have obtained them.
Where to Save Bitcoin
Those who are completely new to bitcoin investing will obviously have to start from the beginning. This involves heading to a site like xCoins.io to establish an account and get a free bitcoin wallet. Bitcoin wallets can be used to buy, sell, trade, and more importantly store bitcoin.
There are a few different kinds of wallets available to investors, including online and mobile wallets such as those offered by many crypto exchanges and peer-to-peer trading or lending platforms, hardware wallets, and software wallets. Those who intend on getting serious about bitcoin investing may eventually want to upgrade to a hardware wallet, as these tend to be more secure. For now, though, an online or mobile wallet will work just fine.
Bitcoin mining is the process by which bitcoins are created and tracked. It used to be quite lucrative and, more importantly, accessible to just about anyone with a computer. Today, though, this is really no longer the case.
The process requires computers to solve complex problems by using equally complex computer algorithms and these are actually designed to become more complicated and difficult to solve over time. Readers who want to get into bitcoin mining today will need to invest in some serious hardware and unless they've got a good deal of capital to invest in efficient machines, they'll likely spend more on electricity than they'll make on mining.
The fact that mining is no longer as profitable as it used to be for average consumers shouldn't scare them away from this cryptocurrency completely. There's still money to be made by investing wisely. Just remember that bitcoin is a decentralized currency, not a stock or a bond, which means that investing in bitcoin will only be profitable if its value goes up relative to readers' native currencies.
Although bitcoin certainly shouldn't be written off yet, its detractors are right about one thing. Bitcoin's value is quite volatile. As a result, it can actually be quite profitable to make short-term investments in bitcoins while their value is comparatively low.
Factors Affecting Value
Since bitcoin is a decentralized currency, normal factors like economic growth and inflation rates don't necessarily affect it in the same way that they do fiat currencies. This can make its frequent price fluctuations a bit confusing. There are, however, a few factors that can be expected to consistently impact bitcoin prices as they change over time.
Ultimately, the price of bitcoin will depend on the tried and true economic model of supply and demand. The more people are mining new bitcoins, the less they will be worth. Similarly, if fewer people than normal are trading their bitcoins or buying new ones, their price can also be expected to drop.
The fact that cryptocurrencies, in general, have only recently been introduced has also caused some price volatility. Governments across the world are still attempting to establish laws and regulations regarding the use of bitcoin within their borders and cryptocurrency companies are still undergoing internal governance changes, as well. Since the number of competing forms of cryptocurrency can also impact the price of bitcoins, even changes in how other forms of crypto are bought, sold, and traded can alter the price of bitcoins.
How to Build Up a Bitcoin Wallet
The obvious answer to how to start making money with bitcoins is to buy while the price is low and sell while the price is high. Of course, this sounds easier than it is and bitcoin investing is risky, just like any investment strategy. Those who have the extra cash and love a good challenge will almost certainly enjoy trading bitcoins.
Although there are a few different ways that consumers can buy bitcoins, arguably the best of them is to use a peer-to-peer (P2P) platform like xCoins. There are a few advantages of xCoins and other P2P platforms over traditional exchanges. For one thing, readers can expect to pay lower fees when they use P2P lending platforms since unlike traditional exchanges, they are designed to facilitate transactions between two users.
P2P platforms do tend to charge small transaction fees. With xCoins, in particular, the majority of fees are set by lenders, though, rather than the company itself. It is thus possible for readers to find some pretty good deals, allowing them to start building up their bitcoin wallets for less.
Is Bitcoin Investing Really Worth It?
The value of bitcoin may be fairly volatile, but few experts believe that there's any reason to think bitcoin, as a cryptocurrency, will be going anywhere any time soon. Readers who are less interested in short-term investment might still want to set up a bitcoin wallet and start squirreling coins away for a rainy day. Crypto enthusiasts cite a wide array of reasons to think that bitcoin's value will increase in the long run as technology continues to progress and the world catches up.
It's important to keep in mind that like any kind of currency investment strategy, the decision to make money with bitcoin does come with a certain amount of risk. This risk is due to the volatile nature of contemporary markets, not to any fundamental flaw in the idea behind decentralized online currency itself. As long as readers find a reputable trading or lending platform that takes reasonable measures to keep its clients' data safe, there's no reason to be concerned about online bitcoin wallets being hacked.
How to Buy Bitcoin
At this point, readers should have a better idea of how bitcoin investing works and how to get started by setting up a bitcoin wallet. Now it's time to discuss what options are available for buying bitcoin using fiat currency or credit. It's important for readers to keep in mind that not every exchange or P2P platform will accept all of the following forms of payment, though. They should check their platforms' terms of service prior to setting up a wallet.
Buying With Cash
Buying with cash is by far the least convenient way to start building up a bitcoin wallet. It requires finding a bitcoin ATM, and there just aren't all that many of them around. Plus, the fact that the regulations placed on crypto trading make the process much less anonymous than it used to be makes it less worthwhile to go through the hassle of buying bitcoin with cash than ever.
Buying On Credit
Not all exchanges accept credit card payments for bitcoin, although the xCoins platform mentioned above is one popular exception. It's also important to consider the fact that some banks are now refusing to allow bitcoin transactions on their credit cards, as well, although Visa and Mastercard, more generally, don't have a problem with it. Using a credit card to start building up a bitcoin wallet may not be the best idea for consumers who already have credit issues, but it's a perfectly viable option.
Readers can also use their debit cards or schedule wire transfers directly from their bank accounts to buy bitcoin through the vast majority of P2P platforms and crypto exchanges. This is arguably the easiest way to obtain new bitcoins. PayPal accounts can also be used to purchase bitcoins online, although these generally need to be funded via bank accounts, anyway.
The Bottom Line
While the days in which consumers could stack up a ton of cash by mining bitcoin from their basements are over, it's still perfectly possible to make money with bitcoin both in the short-term and in the long-term. Just like traditional investments, any investment in bitcoin or another alternative currency is going to come with a certain amount of risk. Smart investors will still find that starting and building up a bitcoin wallet can be an effective way to put aside a little bit of extra capital that can later be exchanged for cold, hard cash.