Known as the first and successful cryptocurrency worldwide, bitcoin is a highly traded currency and commodity, depending on how you look at it. Its production does not fall under any government or bank regulations because it is decentralized. It enables peer to peer transactions directly without the need for 3rd party authority (like a bank) to regulate the transactions in between. All transactions are secure, permanent, and unable to be forged.
Watch these videos to get the gist of what the cryptocurrency is about:
What is Bitcoin Used For?
Purchase Goods and Services
You can buy goods and pay for services with it. The cryptocurrency has gained enough popularity to convince multiple vendors to accept it as a form of currency. Here is a list of vendors that accommodate BTC transactions.
Lending to Traders to Earn Money
BTC is highly trading and there are several trading platforms that are built to support cryptocurrency trading. Just to name a few, you can try checking Bitconnect, USI-Tech, and Mastercoin Plus. Trading is lucrative. You can learn more about lending bitcoin currencies here: Bitcoin Lending
When you think about investing on bitcoins on macroeconomic perspective, no matter how volatile this cryptocurrency is, it has become a reliable go-to currency for future generations. Cryptocurrency is here to stay and BTC is well established among other cryptocurrencies to begin with. With impending hints of US Dollar collapses, threats of destabilization from different parts of the world, the value of physical is just as affected but the difference is that it’s more accessible than conventional regulated currencies.
“Eventually, this [dollar] will go to it’s true worth. Zero. So all of you savers [of dollars] out there, you’re going to lose big time!” – Robert Kiyosaki, author of Rich Dad Poor Dad
Peer to Peer
You can participate in transactions with anyone and anywhere as long as there is internet connection in between. No governing body is able to trace the transaction back to you. No bank to do its clearing times to add to the wait. You can receive your money in an instant. If you sent BTC while reading from the beginning of this paragraph and up to now, you already received your money. It’s that fast. Learn more about this here: Peer to Peer Lending with Bitcoin
Making Money with Bitcoin Mining
To simplify things, you can generate bitcoins through mining and exchanging the bitcoins you earned for other commodities or currencies. These will be explained later on.
Mining BTC can be done through solo or cumulative effort. The process would require a computer and mining software which can connect you to the stream of block chains. The actual mining process is undertaken by a computer’s hardware which can either be owned by you or rented by you through cloud mining.
Is Solo Mining Profitable?
To put it on a theoretical perspective, solo mining can be done. However, on the practical side of things, it is not as economical as you think. Mining bitcoin alone is no longer a profitable course of action than it was years ago. Back then, the amount of bitcoins generated per block broken were 50 BTC, and then proceeded to decrease in rewards of 25 BTC. Currently, it now rewards miners with 12.5 BTC. This is part of the program and the number of BTC generated comes at a fixed and decreasing rate over time.
Compared to mining back then and now, in terms of solo mining, the amount of puzzles your hardware needs to solve becomes too much of a challenge. You would require a specialized hardware built designed specifically for bitcoin mining. These are referred to as ASIC or Application Specific Integrated Circuit. These are expensive and frequently become obsolete in a matter of months given that improved versions are released due to popular demand in innovation.
Other than competing with other miners for rewards, you would also generate high electricity costs which can strip out all potential profits as a solo miner. Bitcoin mining consumes a lot of energy and it only becomes profitable when you have access to cheap energy and cost efficient hardware.
The only practical choice if you are determined to mine for bitcoins would be mining in a pool. You can think of a pool as a mining community with you all having the same objective and taking on the task as a collective. Hash is the major determinant on how fast blocks can be decoded and bitcoins be released into general bitcoin circulation. By joining a pool, you team up with other miners for cumulative efficient mining and get to share the rewards based on how much effort you have placed into the pool.
There is no guarantee that the rate of returns by joining a pool would be constant. Miners can freely change pools and this can have some effect on the overall hash rates. The first BTC mining pool is called Slush Pool which has been around since 2010; you can check out their site here. The largest pool is based out in China where more than 80% of the world’s BTC operations take place.
How Much Profit Can I Make When Joining a Pool?
It depends on how much you are going to invest in the mining process, the current price of Bitcoin, and how reliable your service provider is (if you have plan on subscribing to cloud mining services or rent a specialized hardware in some warehouse built for mining). To know more about the pros and cons about mining, check this out.
BTC cloud mining companies often turn out to be scams and there are too few reliable service providers out there. Bitcoin is a lucrative trade and people will find ways to exploit that trade at the expense of others.
You are better off subscribing to proven and reputable mining platforms in the industry than risk capital loss on scams. Here are some notable mining platforms you may consider subscribing to:
If this is your first time encountering the company name, you may start getting used to it by now as this one is going to be frequently mentioned among the top mining platforms out there. Genesis Mining has been around since 2014 and since it became public, positive reviews just keep pouring in about their service. It features world class bitcoin mining facilities based in Iceland.
It has relatively affordable hash plans for multiple cryptocurrencies. Yes, not only do they cater to bitcoin mining but also well known cryptocurrencies like Ethereum, Litecoin, and Dash just to name a few. This enables you to be flexible with your investments for the same trusted service provider. Furthermore, it also promotes daily payouts which enables you to access steady revenue and makes your investment more liquid.
Genesis Mining may be fairly new but it gained popularity and public confidence in such a short time for good reason, investing on cryptocurrencies through them has become profitable. You can check out their website to know more about their services.
Its goal is providing a mining service accessible for everyone around the world. Hashflare is one of the leading service providers for cryptocurrency mining. It also mines multiple cryptocurrencies other than Bitcoin, and these include Ethereum, and Dash. One of its best incentives to look forward to when subscribing the service is the referral programs.
You can earn as much as 10% of the commission rewards for your referred individual. This can only be realized once that referred person subscribes for the service. Hashflare removes the liabilities one can get from solo mining. Its cloud mining services is could also reduce your mining costs without sacrificing profitability. They pay out through BTC through which you can use to exchange for other cryptocurrencies or exchange for other goods. Learn more about them here.
Another leading provider in the cloud mining service industry, Hashing24 provides convenient mining services guaranteed to let users earn more bitcoins in the process. Hashing24 only delivers new bitcoins mined as part of its effort to be transparent when it comes to its mining services. Recently mined bitcoins means actual mining is being done and you are getting something back for your money’s worth.
You can opt for its reinvestment plan to maximize your earnings. You can have a peace of mind knowing you can request withdrawals anytime and BTC would reach your wallet within the next day. Hashing24 is one of the thriving crypto-mining companies to date.
Is Bitcoin a Bubble?
Its series of rises has become quite parabolic but not enough to reach Tulip Mania level. Bitcoin’s programming was designed to be a self sustaining virtual economy. If it reaches as certain point, its prices may come to a gradual decline but it is speculated that this would not be the case anytime soon. Here are what experts have to say.
Bitcoin is not yet a bubble and its S-curve is just the beginning of what other financial experts believe its end. However, the same thing could not be said for other crypto-money.
Other Cryptocurrencies Worth Mentioning
Since the rise of bitcoin, other cryptocurrencies have gained popularity as an alternative to the famous cryptocurrency. Enter Ethereum and Litecoin, not as high in value compared to the first one but these are popular more of as a backup means in case bitcoin’s value collapses. Furthermore, these two cryptocurrencies has their own identifies other than the standard, quick, anonymous, and permanent peer to peer transactions.
Ethereum is cryptocurrency that provides a wide range of user freedom when it comes to setting up smart contracts. Unlike bitcoin, Ethereum gives users the option to modify certain aspects of the transaction that would only take effect once certain conditions are met. It’s a cryptocurrency great for setting up contracts in advance and transaction could only be fulfilled once everything programmed into the system has met the conditions for another set of consequences to occur, while still having the functionality of bitcoin. If you are interested in Ethereum coins, check their website here.
This cryptocurrency has another take on how it operates different from other cryptocurrencies. The same principles still apply for the coin except some minor changes. Unlike bitcoin, the Litecoin is able to take on higher volumes of transactions which make it more optimal for the peer to peer transaction aspect of crypto-money. It’s still on its early phase, at the time of this writing, Litecoin blocks reward miners with 25 Litecoins per block broken which is an incentive. Check out what Litecoin is about on this website.
The whole strings of industries that surround BTC have shown there is profit to be gained in diving into cryptocurrency market. However, investors should exercise due diligence like any other investment given the volatility of bitcoins. This form of currency is here to stay and there is no stopping the hints of the new age of virtual economy.