You've likely heard at least a little something about Bitcoin, a form of digital currency that removes the financial institution as a middleman. One person can simply transfer funds to another, with each transaction logged anonymously in a centralized, publicly-available ledger. But Bitcoin isn't just a fancy version of PayPal. In fact, there are people who make money with the cryptocurrency.
What Is Bitcoin?
Launched in 2009, Bitcoin is the creation of an anonymous inventor who goes by the name Satoshi Nakamoto. The original goal was simply to create a way for two parties to transact money without using a financial institution. Each Bitcoin transaction is encrypted, keeping both parties' information safe, with computers running specialized software recording the information. This process is known as "mining," and the community members who own those computers compete aggressively for the privilege. The miner gets bitcoins for this effort and, at one time, mining was fairly lucrative. However, the payout for this has decreased over time.
How to Make Money With Bitcoin
There are two ways to make money with Bitcoin: mining and trading. Mining requires an investment in specialized software, as well as equipment that's heavy duty enough to handle a resource-intensive operation. With the rewards having dropped in recent years and mining having become so competitive, this may not be the best option. The alternative, trading, can be much more lucrative. As with any investment, though, this involves buying at the right time, waiting for the value to increase, then selling them at a profit. You can use services like Coinbase to make these trades when you feel the value has increased enough for it to be worth it.
Things to Consider With Bitcoin
If you're thinking about investing in Bitcoin, you should first fully understand it. At that point, buy a wallet and start adding bitcoins to it. Experiment with ways you can spend and trade your bitcoins and closely monitor the growth of the market. You'll likely find that you learn what you need to know to make a decision moving forward. Experts are at war, with some predicting that Bitcoin's value will continue to rise while others seeing that value will eventually drop to zero. One thing is certain, though – many experts believe there likely won't be a middle ground for the currency. In other words, if you choose Bitcoin trading as your moneymaking strategy, you'll either enjoy significant gains or you'll lose it all, assuming the experts are correct.
How to Make Money With Bitcoin ATM
Another option is to become a commercial investor in Bitcoin. One of the best ways is by purchasing and running your own Bitcoin ATM. All of those Bitcoin owners need a way to turn their coins into cash when they need it, and your ATM could be their source. The startup cost of this can vary, so you'll need to ensure you can make enough on fees to pay off those costs, as well as earn a profit. According to a survey of operators, an average machine brings in about $30,000 each month, but the key to maximizing those profits is choosing a high-traffic, easily-accessible location.
One of the biggest issues with Bitcoin is the fact that there is a finite number of coins. There can only ever be 21 million bitcoins, thanks to limits set by the founder. At that point, trading will be the only option, which could drive prices up. This may make Bitcoin a wise investment. But it could also drive cryptocurrency enthusiasts to a competitor, dropping the value to nothing. It's important to know these factors before you sink a great deal of money into digital currency.
- CNET: What is bitcoin? Here's everything you need to know
- BitcoinMining.com: What is the Bitcoin Mining Block Reward?
- The College Investor: SO YOU WANT TO BECOME A BITCOIN MILLIONAIRE?
- Fortune: Bitcoin's Fate? This Cryptoasset Manager Sees Two Possible Outcomes
- Coin ATM Radar: Revenue and costs of running a bitcoin ATM
- Investopedia: What Happens to Bitcoin After All 21 Million are Mined?