How To Make Money With Bitcoins
Hey guys Dave here…I know, I know its been forever since my last post but what can I say life is BUSYYYYYYY! For those of you that are new, I am all about passive income. Aside from being a great idea, passive income has grown into hobby of mine. I mainly invest in rental properties, you can read about them here, here, and here, today, however, we are going to be discussing bitcoin.
What are Bitcoins?
Bitcoin is one of those things you wish you had a time machine to go back and invest from the bottom. Bitcoin is a new currency that was created in 2009 by a mysterious person under the alias Satoshi Nakamoto. Transactions are made with no middle men – meaning, no banks! There are no transaction fees and no need to give your real name.
How the heck do you make money with Bitcoins?
Buy and sell them like a stock trader!
Well think of bitcoins like a stock on the NASDAQ, the price vs the USD is ever changing. Meaning you can potentially make money by buying low and selling high. The best thing about bitcoins is that lately,they have skyrocketed in value. When first introduced in 2013 bitcoins maintained a value of around $20 each, as of today October 8, 2017 the bitcoin has a value of approximately $4600 dollars. Let’s think about that for a second. If someone would have purchased 100 bitcoins at $20 each they would have invested 20K which at todays value would now be worth $460K in just 3 years. But since hindsight is 20/20 and we don’t have access to time machines, we can only move forward. Check out the current price of Bitcoin for today here!
Make your own bitcoins.
Yea you read that right you can make your own. I mentioned this a while back in my previous post on 25 side hustles you can start today. The processed is called mining. The mining process requires the use of specialized computers that solve complex equations on the bitcoin blockchain extremely fast. You are rewarded by this with fragments of bitcoin. This process can take a while and is power intensive meaning that one of the biggest expenses after purchasing this hardware is going to be electricity. Most people who invest in this hardware and electricity consumption are usually able to turn a decent profit by mining and then selling their bitcoins. I will go more in depth with this process in a later post as it can get complicated. Here is an example of a mining rig on the right! If you set up a few of these, it can be a nice source of passive income.
Where do you buy bitcoins? Well before you can buy bitcoins you need a program or app called a bitcoin wallet. A bitcoin wallet is how you save your bitcoins or other cryptocurrency. There are many out there but I use Coinbase. It was the highest rated app in the app store and works well on my phone. The cool thing about Coinbase is that you can also purchase bitcoins directly through the app at market price. I know what your thinking…But Dave, didnt you just say bitcoins cost about $4600? Well heres the beauty of bitcoin, you do not have to buy a full bitcoin. exchange any amount of dollars for its value in bitcoin.
Think of bitcoin like a large pizza, lets say you have $2300 you want to invest, you simply type in the dollar amount and then you are given the equivalent slice of the pie. In this example you would be getting half or 0.5 bitcoins.
If you sign up at Coinbase here you can get $10 worth of bitcoin FREE, and then they give me $10 for referring you so hook me up 🙂
The Bitcoin Experiment
I’m not gonna lie..I’ve known about bitcoins for quite some while but had never taken time to really understand it until recently. After much research, I believe that the bitcoin is going to continue to raise in value. Some analyst think that the price will reach a million dollars usd. While I’m not sure about that I definitely feel like its the wave of the future and as of the last few
While I’m not sure about that I definitely feel like its the wave of the future and as of the last few months the price has made some fantastic gains. That said, I’ve put my money where my mouth is and have invested a small $500 investment into bitcoin. I am going to let this sit for 365 days. At the time of writing this I am 1 day into this challenge because bitcoin prices are changing 24/7, even though i purchased these on a saturday the price has already increased $10 higher than my initial investment. I challenge you if you can afford it to also invest $500 into bitcoin. I suggest checking out price charts like this and buying when the price dips.
I personally feel super confidently about this investment and I don’t like to throw my money at investments with low probablity of success. That being said, this is an investment so its possible to lose money. Never invest more than you can afford to lose. Not only here this is just a good life principal when it comes to investing. I will keep you guys updated on my journey.