What Is The Most Profitable Way To Make Money With Bitcoin? Even after a decade of ups and downs and the unidentified Satoshi Nakamoto, Bitcoin remains at the top of the charts. To be more accurate, Bitcoin is the largest cryptocurrency in the world. So, the response to a question such as is it still possible to make money with bitcoin is a resounding yes: Bitcoin is a viable source of revenue. Since you seem to be on solid ground at this stage, the next logical question is – What is the best way to make money with Bitcoin?, put in another way, what is the most profitable way to make money with bitcoin? There are various options, with Bitcoin mining, trading, investing, affiliate earnings, and micro earnings being the most common. However, there is no one-size-fits-all solution to making money with Bitcoin. The amount of money you earn is determined by your risk perception and the system you use. This write-up will go into seven of the most profitable ways to make money with Bitcoin.
One of the fundamental
questions many people have about Bitcoin revolves around the tokens themselves.
Questions about its value,
security and history, all eventually lead to one place: Where do bitcoins come
from?
While traditional money is
created through (central) banks, bitcoins are “mined” by Bitcoin miners:
network participants that perform extra tasks.
Specifically, they
chronologically order transactions by including them in the Bitcoin blocks they
find.
This prevents a user from
spending the same bitcoin twice; it solves the “double spend” problem.
Skipping over the
technical details, finding a block most closely resembles a type of network
lottery. For each attempt to try and find a new block, which is basically a
random guess for a lucky number, a miner has to spend a tiny amount of energy.
Most of the attempts fail
and a miner will have wasted that energy.
Only once about every ten
minutes will a miner somewhere succeed and thus add a new block to the
blockchain.
This also means that any
time a miner finds a valid block, it must have statistically burned much more
energy for all the failed attempts.
This “proof of work” is at
the heart of Bitcoin’s success.
For one, proof of work
prevents miners from creating bitcoins out of thin air: they must burn real
energy to earn them.
And two, proof of work
ossifies Bitcoin’s history.
If an attacker were to try
and change a transaction that happened in the past, that attacker would have to
redo all of the work that has been done since to catch up and establish the
longest chain.
This is practically
impossible and is why miners are said to “secure” the Bitcoin network.
In exchange for securing
the network, and as the “lottery price” that serves as an incentive for burning
this energy, each new block includes a special transaction.
It’s this transaction that
awards the miner with new bitcoins, which is how bitcoins first come into
circulation.
At Bitcoin’s launch, each
new block awarded the miner with 50 bitcoins, and this amount halves every four
years:
Currently each block
includes 12.5 new bitcoins.
Additionally, miners get
to keep any mining fees that were attached to the transactions they included in
their blocks.
Anyone can become a
Bitcoin miner to try and earn these coins. However, Bitcoin mining has become
increasingly specialized over the years and is nowadays mostly done by
dedicated professionals with specialized hardware, cheap electricity and often
big data centers.
To mine competitively
today, you need to know what you’re doing, you must be willing to invest
significant resources and time, and — last but not least — you need access to
cheap electricity.
If you have all of this,
you too can give it a shot and become a Bitcoin miner.
Source Bitcoin Magazine
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