Bitcoin is the most popular cryptocurrency in the world. It is so popular in fact that its name is frequently substituted to refer to digital money in general, although there are many other currencies other than Bitcoin out there. Speaking of which, it’s very telling that there’s even a term designating all crypto that’s not Bitcoin, namely “altcoin”. As the most popular currency in the crypto market, it’s natural that if you’re thinking about investing in this sector, you’d gravitate towards BTC.
Introduced in 2009 by Satoshi Nakamoto, its popularity has inspired the development of all other cryptocurrencies. Many have attempted to replace it by creating different payment systems, ledger technologies and tokens, but Bitcoin has held its ground and is still the uncontested ruler of the crypto realm.
And since the original is always better than anything that follows it, here are some of the ways in which Bitcoin can bring you substantial revenue.
What is it?
Bitcoin is a virtual currency. In this sense, it acts the same as fiat money, in that you can perform transactions of all kinds, including buying, selling, or borrowing. Unlike traditional money, however, Bitcoin doesn’t exist physically, in the sense that it is created, distributed and used within a decentralized system, the blockchain. This is also the place where it’s stored, and if you want to access your funds, you’ll need to have proof of ownership in the form of a wallet that holds all your keys and passwords.
The idea behind Bitcoin was to create an electronic cash system that wouldn’t need any third-party intervention or management. This idea would then be replicated across the crypto world, as more and more altcoins continue to come into existence. One of the pivotal aspects of Bitcoin is the halving, the process whereby the supply is cut in half. This is done in order to suppress the rate of inflation and create upwards pressure on prices.
Halving takes place every 210.000 blocks. During its incipient stages, all the way back in 2009, the block reward for miners was a whopping 50 new coins. As of 2022, after the third halving that occurred two years prior, on May 11, 2020, the earnings of the miners were dropped to 6.25. In two years’ time, the block reward will reach 3.125.
While one Bitcoin is divisible to eight decimal places at the moment, this may very well change in the future, with the coin made divisible to even more decimal places. That is, of course, only if miners accept the changes. Which brings us to our next point:
Mining
The process through which bitcoin is created uses a variety of hardware and software. In the beginning, mining could be achieved entirely on a personal computer, with no other gadgets necessary. However, the growing popularity of the coin meant that the chances to be the one to solve the hash are smaller. While you can still mine if your computer possesses newer hardware, the likelihood of solving complex mathematical problems entirely on your own are reduced. This is due to the sheer frequency at which new hashes are created, which is no less than 220 quintillion per second. Such a number is almost impossible to visualize mentally, so the challenge becomes apparent. Specialized machines known as Application Specific Integrated Circuits (or ASICs for short) generate hashes, with the latest ones being able to support the creation of no fewer than 255 trillion per second. To compare, a computer, even when equipped with the latest hardware, isn’t able to put forward over 100 million.
If you’re thinking about becoming a miner and gaining your Bitcoin that way, the easiest option is to join a mining pool. These are groups of miners that join their collective computational power to compete with the larger mining farms. If you possess the financial means, you can purchase an ASIC. While the costs are usually as high as $20.000 for a new model, you can find used, albeit older, options for less. Many miners sell their gadgets as they update to newer hardware. However, you must also consider the unavoidable additions to your power bill. These extra costs won’t only come from the electricity the ASIC uses, but also from the energy used for cooling.
Buying
If mining Bitcoin sounds like too much of a hassle, you can always try and learn more about how to buy BTC. The first step to purchasing Bitcoin is to start a personal account on a crypto exchange. This isn’t as easy as choosing a username and password. You’ll also have to provide additional credentials to validate your identity. After the verification process has been completed, you still have to wait some time before you’ll be able to start performing transactions.
You can fund your account using your credit or debit card, as well as your bank account. In order to be able to buy BTC, you’ll have to make sure there’s sufficient fiat currency in your account at all times, less you’re caught unawares. Some exchanges allow you to trade altcoin for Bitcoin as well, but you should be mindful of trades in other crypto, as prices are generally more volatile than in the case of BTC and can cause you to register significant losses. If you’re a novice trader, this can be a rather scary and unappealing experience and may even put you off crypto for good.
Uses
Given its time on the market, Bitcoin has several uses. In order to use your crypto you’ll have to be able to provide proof of ownership in the form of a wallet. This device contains all the private keys that allow you to access your coin on the blockchain and use it however you wish. An increasing number of stores and vendors accept payments in digital money. It’s relatively easy for online businesses to do this as all they need to do is add it as a payment option alongside others such as card or PayPal.
If you’re thinking about starting an investment in Bitcoin, don’t hesitate. It’s the most reliable cryptocurrency out there.