The 21st century is an era of online financial operations. E-money is an easy way to operate and transfer your funds. Also, the 21st century is the time when humanity invented such type of economic tool as the cryptocurrency. The most recognized cryptocurrency (also the first) is bitcoin or BTC. So, in this article, we will try to figure out how to make money with bitcoin in Nigeria.
Why is bitcoin promising?
At the heart of bitcoin technology lies the principle of P2P, i.e. from person to person, which implies a lack of participation from the bank. The management of transactions and the release of bitcoins is carried out on the Internet. Bitсoin has no owner and no controlling body, anyone can use it on their own will.
The usage of bitcoins depends on the legislation of respective countries. While there are no global barriers to the evolution of cryptocurrency and bitcoin still exists, it’s possible to earn good money from it.
How to earn on bitcoins?
There are several ways to make money with bitcoin:
- Mining of bitcoins.
- Trading on the growth and fall of the bitcoin rate.
- Bitcoin arbitration between exchanges.
- Investing in bitcoin.
Let’s mention that there are more ways to earn money on bitcoin than listed above. But in our article we would consider the normal earnings, starting from three zeros.
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Mining of bitcoins
This is the most common. It involves the immediate extraction of bitcoins, which is called mining. It is a method of obtaining bitcoin by solving mathematical tasks. The complexity of bitcoin mining is constantly growing. For example, at the beginning bitcoins were extracted by processors. Nowadays these tools were replaced by video cards with the support of OpenCL and CUDA technologies, which are much faster than x86-compatible processors.
The very first miners who were engaged in the production of bitcoins, and who did not sell them for pennies, but held for at least a year or two, became very rich. Because in 2011-2012 the cost of one bitcoin did not exceed $20. And in 2013, on average, the price of one BTC was a maximum of $139, and in November 2013 the cost of one bitcoin exceeded $1,100. If you ask about this rate nowadays, you would probably be shocked. Today, 1 BTC costs above $15000, and it changes every day.
After the stage when the bitcoins were mined with the help of video cards, next came the time the same tasks began to be performed specifically for some devices called ASIC. There were entire farmscreated for the production of bitcoins. For example, there are a lot of bitcoin farms located in Hong Kong.
There are two options for earning on BTC mining:
- Standard mining.
- Cloud mining.
Standard way is possible after buying the above-mentioned equipment. Cloud mining requires you to rent a remote server with hardware. We have risks in both cases. If you physically have an ASIC, you can at least sell them if something goes wrong. And in the case of cloud mining, the service itself could shut down tomorrow and you will be left with nothing.
Trading on the exchange rate of bitcoin
It is the easiest way. You can register for any reliable exchange. For example, wex.nz (once known as BTC-E exchange), Kraken, BitStamp, Bitfinex, itBit, OKCoin. There are many options here. For example, you can recharge your account in bitcoins, or you can use electronic payment systems (Perfect Money, ADVCash, etc.).
For example, if you have replenished the account in US dollars, you decide on the pair you will like to trade. The most popular mode is the BTC/USD (bitcoin/dollar). You then look at the current BTC-to-dollar rate and buy bitcoin. Now you wait for the price of bitcoin to rise, after which you sell the bitcoins that you bought at a higher price.
This is the simplest version but you have to take into account the technical and fundamental analysis of the direction of the price movement. In the case of bitcoin, it is simple and predictable — globally, the cost of bitcoin will continue to grow.
Bitcoin arbitrage between exchanges
There are several large exchanges when it comes to cryptocurrencies. The cost of bitcoin on these exchanges is quite different. You can see for yourself if you visit the exchanges we mentioned earlier.
How to make money here?
- Register the bitcoin wallet (Blockchain Wallet for example).
- Register accounts in large exchanges from the number presented above.
- Load the money in equal parts for each exchange. For example, for $500-1,000 per account.
- For example, the Wex exchange is selling 1 BTC for $13,600, and on OKCoin the buying price is $13,800 per BTC.
- Next, you buy bitcoins on the Wex exchange and transfer them to OKCoin, where sell it and put the difference in your pocket.
You can also play with the exchange rates via search services like bestchange.com, that can help you to find exchangers with most profitable rates.
Underwater rocks:
- The bitcoin rate is constantly changing, so if you take out the purchased bitcoins from Wex and take them to OKCoin (this is just an example of the exchangers), the price of the bitcoin can change. So it is possible that when you transfer the money, you may not get the profit you hoped for.
- Therefore, the timing of withdrawal and input of funds needs to be clarified at the exchange.
- Commission of exchanges. On many stock exchanges, there is no commission to replenish the balance in bitcoins, but it is available when you want to replenish the balance through other payment systems.
Transfers in bitcoins are non-refundable. If the bitcoins were not sent to the right place, then they can not be returned
Investing in Bitcoin
There is another way to earn money on this cryptocurrency. Let's call it — investing in bitcoin with the strategy "buy and hold." Here the name speaks for itself. You buy BTC, then just wait, but not a day and two, and not a week, and preferably not even a month, but at least six months. With the expectation that the price of bitcoin through these six months will be significantly higher.
No matter what method you use, it is always necessary to get fresh information about BTC rates and market tendencies. Here is another tip: don’t save big amounts of money on the exchanges' accounts. We all remember what happened with the accounts of WEX root — BTC-E Exchange. People's investment were actually destroyed when the USA government opened a case against this Internet resource.
No matter what method you use, ensure it is legal or be ready to face the consequences. If you want to try cryptocurrency, you need to understand that this way of making money is rather risky but can make you rich as well. Anyway, we wish you good luck.
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Source: Naija.ng