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How to earn Bitcoin
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How to Earn Bitcoin
While investors can buy Bitcoin or swap other cryptos into Bitcoin, there are also ways to earn a lot of Bitcoin, but they tend to require a larger up-front investment.
While most people have heard of cryptocurrencies, many people haven’t taken the jump and bought any. Understandably, investing a significant amount of money into a digital asset isn’t for everyone. After all, even Bitcoin, the first mainstream crypto, has experienced large price swings. It reached an all-time high of nearly $69,000 in November 2021 and then dropped to less than $20,000 in June 2022. But for the crypto curious who aren’t ready to put their money on the line, there are ways to earn Bitcoin.
Buying Bitcoin isn’t the only way to get into the crypto world. In fact, there are several ways to earn Bitcoin, including a few free options. Because each Bitcoin is worth thousands of dollars, the earnings are often a portion of a Bitcoin—for example, 0.00005 BTC is worth $1 when Bitcoins cost $20,000 each—rather than a full coin. But, being a digital currency, it’s easy to earn, store, and spend parts of a Bitcoin.
is the process of using computer power to mint new Bitcoins and add them to the Bitcoin blockchain—the digital ledger that keeps a record of every Bitcoin transaction. To do this, miners compete against each other to solve complex computational problems as part of a proof-of-work (PoW) mechanism, which Bitcoin uses to verify transactions. For example, the miners ensure that someone who wants to spend Bitcoin has the Bitcoin available in their crypto wallet, and that the person doesn’t spend the same Bitcoin twice.
Miners earn Bitcoin for their work, and they collect fees from the transactions that they verified. While a basic computer could profitably mine Bitcoin when it first launched in 2009, the math problems’ difficulty increases and the Bitcoin rewards decrease over time. Today, the computing power required to solve these problems is much higher and someone might spend more on electricity than they’d earn in Bitcoin using a home computer. This is why many Bitcoin miners are now professionals (individuals or companies) who use specialized equipment and set up shop in places that have low energy costs.
While owning, using, and mining Bitcoin is generally legal across the U.S., some overseas governments have banned commercial mining operations because of the energy draw.
Some crypto exchanges and investing apps that support crypto trading offer new users a sign-up bonus. And while it’s not a way to continually earn Bitcoin, a sign-up bonus could be an option for jump-starting an investment fund.
To qualify, someone may need to deposit or trade a minimum amount of dollars with their new account. The bonus amount can vary significantly depending on the platform and how much the new user invests. For instance, someone might get $5 to $10 worth of Bitcoin for simply opening a new account, or might get several thousands dollars worth of Bitcoin if they deposit more than $100,000 into the account.
At the most basic level, refer-a-friend programs give users a bonus for getting a friend or acquaintance to sign up for a new service. Some crypto platforms have these programs, which customers can use to earn small referral bonuses. A few, such as CoinLedger and BitcoinIRA, have more robust affiliate programs with varying commission levels for people or companies that get a large number of new customers to use the platform.
Earning affiliate commissions can be difficult because success depends on attracting an ever-growing audience and earning their trust. But some people make a career out of building affiliate websites and social media accounts, and the successful ones can earn a lot of money. These types of affiliate programs are common in other industries. For example, Brian Kelly built and ran The Points Guy, an affiliate site focused on travel and credit cards, which he sold to Bankrate in 2012.
Similar to credit cards that offer cash back, miles, or points, there are several crypto credit cards that cardholders can use to earn free Bitcoin (or other cryptos) on their purchases. The Bitcoin rewards per dollar can depend on the credit card and the cardholder’s status in the issuer’s program.
Some platforms, such as Gemini, offer interest on cryptos that are kept on the platform. Similar to a bank, the platform pays depositors a percentage on their holdings and lends out the funds to borrowers who pay a higher interest rate. The annual percentage rate (APY) that depositors earn can depend on the platform and the type of crypto. Some cryptos may pay out less than 1%, while others pay out hundreds or thousands of percent.
Bitcoin tends to have an APY on the lower end, in part, because other cryptos create and pay out new coins to attract users. But, at the same time, these inflationary tactics could wind up bringing down the price per coin. Rates can also depend on current supply and demand. Still, even if it’s a low rate, an interest-bearing account could be a way to earn more Bitcoin on long-term Bitcoin holdings.
The crypto world has a variety of play-to-earn (P2E) games that let users earn crypto while playing on their computer or phone. Some of these require players to make an initial investment, make money when gamers watch advertisements, or they host online casino games. These games aren’t always great opportunities, and sometimes they leave players worse off. In March 2022, Axie Infinity, one of the most-popular P2Es, was the target of a hack that led to the loss of more than $650 million worth of cryptos.
There are also so-called Bitcoin faucets, which give people a small amount of Bitcoin for completing a task, such as watching an advertisement or filling out a survey. The rewards are often minimal, sometimes as little as a single Satoshi—the smallest denomination of a Bitcoin, which is worth 0.00000001 Bitcoin, or $0.0002—but they could be a way to earn free Bitcoin. However, it’s best to be cautious because sites that offer free Bitcoin may also be scams.
Another option could be to accept Bitcoin as payment. Some freelancer and gig marketplaces have job boards and support crypto payments by default. Someone who has their own e-commerce site can also use a third-party payment processor to add Bitcoin and other types of crypto as a payment option.
Before accepting cryptos, understand the potential implications—how to convert Bitcoin to dollars that can be spent elsewhere, for instance, and the tax rules associated with crypto transactions.
While investors can buy Bitcoin or swap other cryptos into Bitcoin, there are also various ways to earn Bitcoin. These could allow investors to get started and earn a small amount of Bitcoin for free. There are also ways to earn a lot of Bitcoin, but they tend to require a larger up-front investment.
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