We’re indeed living in a bizarre world when it comes to Bitcoin and other cryptocoins. Terms such as digital currency, networks, and hashing come to mind, while we are left to wonder, how is this possible? There’s no brick and mortar building like the Federal Reserve. How can it be real if we can’t see it? Are we stepping outside of our comfort levels and putting our faith in numbers, code, and anonymous people somewhere out in cyberspace? Trying to break it down could practically drive one crazy. An insanity that can only be encapsulated in the mind of Satoshi Nakamoto––the pseudonymous person or group––that designed and created the Bitcoin protocol and reference software, Bitcoin-Qt in 2008.
In just five years, this group has achieved a nearly $10 billion market cap. Nakamoto is believed to be in possession of roughly one million bitcoins. At one point in December 2013, this was the equivalent of $1.1 billion US dollars. Considering that wealth, most folks would say, “where do I sign up?” However, that question only leaves us with one stark realization…it’s not that easy. Is this type of wealth achievable by the average population? I think not. Must one be a technical or mathematical genius? Again, I think not. There are ways to approach this peer-to-peer electronic cash system phenomenon for mere mortals as well.
When searching for a relatable definition of Bitcoin, I found a report from Satoshi Nakamoto that reads, “A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.” For the detailed report, click here http://bitcoin.org/bitcoin.pdf
Here is a table of how the process is explained:
Without getting into mind-boggling algorithms, let’s just get straight to how to make money with Bitcoin. Take a look at these five opportunities:
1. Earn Bitcoins by accepting them as a means of payment. One of the quickest ways to earn Bitcoins is by accepting them as a means of payment and charging fees to convert bitcoin to fiat for traders and merchants who are beginning to accept the currency of the Internet. You can integrate this payment system easily by following three steps:
Get a free online Bitcoin wallet from Blockchain.info. There’s a host of other providers apart from Blockchain.info, just be cautious as no wallet is completely safe.
Display a QR-code with your Bitcoin address next to your cash register. Once you have set up your Blockchain.info account go to ‘Receive Money.’ Under the ‘Actions’ drop-down menu select ‘QR-code’. Print out the image with the QR-code and place it next to your cash register. Another option is ‘Receive Money’ and then under the ‘Actions’ drop-down this time select ‘Create Payment Request,’ then ‘Receive Money’ and then under the ‘Actions’ drop-down this time select ‘Create Payment Request’.
This is a sample of a QR Code:
Display the “Bitcoin Accepted Here” logo prominently.
2. Making and selling money-minting machines. Bitcoin money-minting machines are called ASIC mining machines. The cost is pretty steep, selling for thousands of dollars. One of the most powerful on the market, the Neptune from Stockholm, Sweden-based KnC miner retails for almost $10,000. These machines will theoretically pay for themselves once you’ve mined a dozen or so Bitcoins. In just two weeks, KnC Miner reported that it sold $25 million worth of the machines. Interested in buying a machine? Here are the details; you can house the machine yourself or order hosted machines that KnC keeps in a warehouse in an undisclosed location for security and its customers can remotely monitor them.
3. Earn Bitcoins from interest payments. Make your Bitcoins work for you. Earn Bitcoins through interest payments by lending them out. As a disclaimer, only lend through sites and or people you trust. Look for proper terms and conditions in place, status of incorporation and contact details before lending out any of your Bitcoins. If you don’t pay special attention to this, you could be left wondering what happened to your Bitcoins––be dubious.
Here are the three most common ways to lend Bitcoin:
Lend directly to someone you know.
Peer-to-peer Bitcoin lending.
A Bitcoin banking like model.
4. Earn free Bitcoins by completing tasks on websites. Earn Bitcoins by watching videos and completing simple tasks. With dozens of websites offering you ways to earn free Bitcoins, it truly boils down to how much time you have available to put forth into earning. The payout is not huge, but it is worth considering.
Here’s a screenshot from bitcoinget.com:
Check out these sites:
bitvisitor.com. Bitvisitor helps start-ups find new users by allowing companies to compensate users directly for trying out their website. Companies can use Bitvisitor to drive influential early adopters to their website. The added bonus for Bitcoin enabled websites is that every user of Bitvisitor is an active Bitcoin user with a valid wallet filled with Bitcoins to spend! Bitvisitor represents a fundamental shift in the online advertising model that could only be made possible by the success of Bitcoin micropayments. If you are looking to drive high quality traffic to your website or looking to earn free bitcoins while using a variety of high quality websites, then check out Bitvisitor.
Coinworker.com CoinWorker lets you earn bitcoin by completing analytical tasks using only your web browser. Here’s how you start:
Step 1: Introduce yourself. Register and then enter your bitcoin receive address.
Step 2: Think a little. Earn points by completing short analytical tasks that can be done in your browser.
Step 3: Profit! After your account hits 180 points, points convert to bitcoin (as if USD cents) and are paid directly to your address, usually within minutes.
Rugatu.com Rugatu is a Q&A Community where you can ask questions with Bitcoin rewards or become a Bitcoin freelancer. On the Rugatu site you can ask and answer questions. You can also comment and vote for the questions of others and their answers just as you would do in a usual Q&A community. The concept is to introduce the use of Bitcoin, the new Internet currency, as a way to enable people to reward others for giving good and fast answers to their questions.
Here is a screenshot of the Rugatu Homepage:
5. Earn Bitcoins with Trading. Arbitrage is one of the safest ways to make money with trading. In laymen’s terms, you buy an asset for a certain price and sell it immediately for a higher price. You will want to keep in mind price differences between exchanges. A good starting point is this thread on Bitcoin StackExchange.
Similar to stock traders, you will need to become adept at spotting patterns, for instance wait until the price increases, then sell for a fiat currency and buy more Bitcoins once the price drops again. It’s a pretty risky business, but in risk, there’s often reward.
Those who get in early reap the benefits. Also, the more powerful the equipment, the more lucrative the rewards should you wish to do mining on your own. Through the undeniable Internet era that we are engulfed in, Bitcoin offers a lot of opportunity to reconsider how the financial system could work as we look toward the future.
Matthew Toren is an Award Winning Author, Serial Entrepreneur, and Investor. He Co-Founded YoungEntrepreneur.com along with his brother Adam. Matthew is co-author of the newly released book: Small Business, Big Vision: “Lessons on How to Dominate Your Market from Self-Made Entrepreneurs Who Did it Right” and also co-author of Kidpreneurs.
Follow Matthew on Twitter: @matthewtoren