Created in 2009 by Satoshi Nakamoto, Bitcoin is currently the biggest cryptocurrency with a total market cap of $734,878,532,503 at the time of writing. Despite its volatility since its inception, Bitcoin reached an all-time high of just over $69,000 in November 2021.
As the father of crypto, Bitcoin has inspired tons of cryptocurrencies, and now the total market cap of crypto is just under $3 trillion.
So can you make money off of Bitcoin?
Trading at a price of just 0.09 in 2010, many who got on early are now millionaires and billionaires. Some notable early investors now enjoying their Bitcoin profits include The Winklevoss twins, Michael Saylor, Matthew Roszak, and Tim Draper.
Many consider Bitcoin and other cryptocurrencies as the future. This is evident by the current momentum we are seeing with new technologies such as NFTs, DeFi, and much more.
If you don’t want to get left out, we have compiled a list of how to make money with Bitcoin in 2022.
1. Buy and Hold (HODL)
Buy and hold is still one of the most popular ways to invest in Bitcoin. This strategy is perfect for newbies since it only requires one to buy Bitcoin and let it sit in their wallet. For this to work, you have to believe in the long-term potential of Bitcoin.
This strategy requires patience and knowing the right time to buy and sell. As an investor, you want to buy during the dip and sell during the highs when you’re satisfied with your profit.
Avoid panicking when the price of Bitcoin tumbles as this is normal in volatile markets and assets such as Bitcoin tend to rebound.
Also, take some time to learn about volatile markets and what affects them.
2. Mining Bitcoins
Mining is a way to verify Bitcoin transactions and introduce new coins to the network. It is what keeps the Bitcoin network secure as miners are given the task of verifying transactions in exchange for rewards in Bitcoin and transaction fees.
Verification of transactions prevents double-spending, a problem that is possible in digital currencies where a user who has 1 Bitcoin sends a copy of that and remains with the same Bitcoin to spend elsewhere.
So how do miners make money mining Bitcoin?
When verifying transactions, miners have to compete to be the one to verify transactions. To discourage bad actors from validating, miners have to solve complex mathematical problems, a process that is computationally intensive hence requiring top-of-the-range hardware and lots of electricity.
The first miner to solve the mathematical problem is rewarded with Bitcoins and transaction fees. The current reward is 6.25 BTC. Note that the Bitcoin network halves the reward roughly every 4 years.
To get a substantial return on investment as a miner, you need to find cheap electricity and efficient mining hardware. You can then mine solo (running a node) or join a mining pool where mining rewards are split among the pool members.
You are more likely to get a constant stream of income by joining a mining pool. As Bitcoin has grown in popularity, more miners have joined the network and as a result, increasing the mining difficulty. So running a node by yourself in a competitive blockchain like Bitcoin means you’ll need lots of luck to get a reward.
However, by joining a pool, lots of computing power is combined increasing the likelihood of getting more rewards.
For those who don’t want to purchase hardware, another option is Cloud Mining. Cloud mining works by renting hardware from a cloud mining provider and joining a mining pool. However, tread carefully as the cloud mining space involves lots of scams where fake providers collect people’s money with the pretense of renting mining hardware.
The future of mining is full of uncertainty, with many voicing concerns of climate impact and big blockchains like ethereum moving away from proof of work (mining) to proof of stake.
Calculate potential mining profitability here before investing in mining hardware.
3. Invest in Bitcoin Companies
Another way to make money with Bitcoin is by investing in Bitcoin companies involved with Bitcoin technologies or with Bitcoin portfolios. You can buy shares or stocks in such companies and theoretically, if the price of Bitcoin skyrockets in value, your investment should become more valuable.
Examples of such companies include Microstrategy, which held around 124,391 BTC in reserve as of December 2021. After the crash of Bitcoin price in early January of 2022, the company purchased additional 660 Bitcoins.
Popular electric vehicle manufacturer, Tesla, joined the Bitcoin world by purchasing $1.50 billion worth of crypto in 2021, according to a reveal from a SEC filing. At the time of writing, Tesla’s 42,902 BTC is worth around $1.6 billion.
Although Musk raised concerns about Bitcoin’s impact on the climate, his company plans to hold BTC for the long term.
Other companies worth investing in include Galaxy Digital Holdings, Voyager Digital LTD, Marathon Digital Holdings Inc., and Coinbase Global Inc.
4. Earn Bitcoin as Cash Back Rewards in Credit and Debit Cards
With the boom in cryptocurrencies, many traditional financial institutions are now joining the space. Crypto users can now enjoy financial incentives by using their everyday payment methods like credit cards and debit cards.
For example, the BlockFi Rewards Visa® Signature Credit Card offers 3.5% back in crypto, during the first 3 months. All purchases earn unlimited 1.5% back in crypto and purchases over $50,000 of annual spend earn 2% back in crypto. Other perks include no foreign transaction fees and no annual fees.
Other cards that offer incentives include Crypto.com Visa Card, SoFi Credit Card, Upgrade Bitcoin Reward Card, Gemini Credit Card, and much more.
5. Accept Bitcoin as Payment
As Bitcoin becomes more mainstream, many businesses are starting to accept Bitcoin as payment. So if you have a business or are planning to start one, consider integrating Bitcoin as a payment method for your customers.
Bitcoin as a payment method works for all types of business including brick and mortar stores and eCommerce sites. You can post a sign in your store notifying customers or allow online shoppers to pay with Bitcoin when checking out.
The perks of accepting Bitcoin payments include:
attracting a customer base of people who prefer to shop with Bitcoin.
the process is secure, fast, and simple.
you don’t have to rely on third-party payment processors to process transactions.
you can receive Bitcoin from anyone globally.
6. Accept Tips in Bitcoin
Another way to earn with Bitcoin is by accepting Bitcoin as tips. You can help others online by completing simple tasks such as answering questions, helping with advertising, and much more.
Some crypto tipping platforms include Bitfortip, Tipprbot, and Chaintip. Some platforms like Twitch have also implemented some crypto tipping services.
7. Lending Bitcoins
If you’re holding Bitcoins for the long-term after buying during the dip, why not earn more by lending it in exchange for earning interest? Let your Bitcoin work for you.
A new wave of peer-to-peer decentralized financial institutions has cropped up, allowing borrowers to connect with lenders. Users do not need a bank account and they can enjoy automatic payments and fast and secure transactions.
Some platforms also require no collateral, but this may result in high-interest rates for borrowers. Such platforms are mainly used by individual investors and small businesses. Requirements may include a good credit score, stable income, valid passport, and no bankruptcies.
Examples of lending platforms include BTCpop, Bitbond, Unchained Capital, etc.
Note: Make Sure to conduct thorough research before investing your money in such platforms to avoid falling for scams and other dishonest schemes.
8. Bug Bounties
For blockchain and cybersecurity experts(whitehat hackers), the world of crypto has brought more perks in the form of bug bounty programs. With platforms like exchanges and DeFi systems being set up, developers and investors are more than willing to handsomely reward those who find bugs in their systems.
With millions of dollars at stake in such platforms, security experts are encouraged to find and report any vulnerabilities. Many bug bounty programs pay in Bitcoin, while others may pay in cash or other cryptocurrencies, in case a bug is discovered in a crypto network.
For instance, Polygon paid $3.46 million as bug bounty rewards to two white hat hackers who discovered a double-spending bug on its network. The bug had potentially put a total of $23 Billion at risk.
9. Trade Bitcoins
Trading Bitcoin is one of the ways to make money off of Bitcoin. While buying and holding is a long-term game, trading is more of a fast-paced strategy, where if successful, you can make good profits within a short time.
Unlike traditional markets like stocks, the Bitcoin markets never close, allowing traders to take advantage of the volatility of the Bitcoin network 24/7 by opening positions and closing them within a short time. However, more volatility means more risk, so do your research before staking your money.
Types of Trading:
Day Trading: In this type of trading, traders buy Bitcoin positions and sell them within a short time. The goal is to predict the short-term movements of the price of Bitcoin. Experienced traders utilize a variety of tools and techniques to better analyze the market and end the day with good profit.
Hedging Bitcoin: Hedging is a strategy used by traders to offset potential losses from initial trade positions. Instead of closing out or reducing their positions when worried about potential risk, some traders prefer to maintain their initial positions and open new positions to counteract any losses. An example of this is short-selling Bitcoin when you already holding Bitcoin for the long-term, but you believe the short-term price is gonna fall.
Bitcoin Arbitrage: This process involves making quick profits by looking for money-making opportunities in exchanges. The strategy involves buying Bitcoin at an exchange at a lower price and selling it in a different exchange where the price is higher.
10. Invest in Bitcoin ETFs
For those who don’t wish to engage in the process of opening accounts with exchanges and getting a Bitcoin wallet, Bitcoin ETFs are a great alternative. Bitcoin ETFs track the price of Bitcoin allowing investors to trade Bitcoin without actually owning them.
Investors avoid the complicated process of trading bitcoin and enjoy the ability to own Bitcoin without the worries of Bitcoin storage and security.
Examples of Bitcoin ETFs include ProShares Bitcoin Strategy ETF, VanEck Bitcoin Strategy ETF, and Valkyrie Bitcoin Strategy ETF.
11. Join Bitcoin Affiliate Programs
You can make money off of Bitcoin by looking for Bitcoin affiliate programs. These are usually hosted by Bitcoin companies such as exchanges and trading platforms. After joining an affiliate program, you can advertise a company’s products or services through social media and earn a commission or fixed reward for any new customer or website visitors gained by the program owner.
For Bitcoin, this would entail influencing a user to sign up to an exchange or promoting Bitcoin products such as hardware wallets.
For this to work, you need to have influencing power by having an active following on your social media pages or a blog with lots of visitors. Examples of Bitcoin affiliate programs that allow you to earn money with Bitcoin include Paxful Affiliate Program, Ledger Affiliate Program, Binance referral, Coinmama affiliate programs, etc.
12. Start a Bitcoin Blog, Write for Blogs & Magazines or Start a Podcast
Bitcoin is still a strange term to many, and writers who have in-depth knowledge of the crypto space would be welcome.
You can teach people how to invest in Bitcoin, how to make money with Bitcoin, and much more. To write for blogs, you can send them pitches about your topic idea and if selected, you get paid for your piece and gain exposure as a writer.
Examples of crypto blogs include Cointelegraph, CoinDesk, NewsBTC, and CryptoNinjas.
Another option would be to start a blog or podcast focused on Bitcoin and other cryptocurrencies. These can be monetized through ads, affiliate programs, and sponsorships.
13. Micro Jobs
Micro Jobs refer to simple jobs rewarded with Bitcoins. These work by requiring users to watch or click ads, play games, answer surveys or download an app in exchange for Bitcoins.
However, making an income with this strategy is far from suitable. Micro Jobs tend to be tedious and repetitive. The Bitcoin payments are usually so little, equivalent to cents in dollars.
So lots of hours would have to be spent to make a substantial amount. However, if you have some free time, micro jobs can be a great way to make some extra cash.
Websites that offer such micro jobs include adBTC, BTC4ADS, Coinpayu, and Coinadder. Do your research when looking for micro jobs, as some may be run by scammers looking to get free ad engagements without paying, install malware on your device, or fleece you.
14. Play-To-Earn Blockchain Games
As blockchain technology is becoming more complex, play-to-earn NFT games are now the new trend. Games like Bitcoin Alien Run allow players to play and earn rewards in the form of Bitcoin (satoshis).
Other crypto games operate on Blockchains such as Solana, Ethereum, and Polygon, while others run on their own cryptocurrency. Games like Axie Affinity have become so big, some players are making a living just by playing the game. Other notable blockchain games include Axie Infinity, Age of Rust, CryptoKitties, Splinterlands, Alien Worlds, Farmers World, etc.
15. Running a lightning Node
You can make money by running a lighting node. A lightning node is similar to running a node through mining, however, the difference is that a lightning node connects and interacts with the main blockchain network through software.
While traditional nodes have to verify all transactions on the blockchain, lightning nodes only need to verify transactions that it is directly interacting with.
The benefits of running a lightning node are:
- Transactions are processed faster.
- Transactions fees are much lower.
- You get full custody of your crypto.
- You can earn transaction fees as a reward for routing payments.
Running a lightning node as an investment requires lots of research and maybe complex for non-tech-savvy individuals.
What Does the Future Hold for Money Making Opportunities in Bitcoin?
Now that you know the different ways to make money with Bitcoin, why not try one or two? If you pick one, try conducting more research by visiting forums, YouTube channels, etc., to get more insight into how these strategies work.
Every day, blockchain technologies are evolving, and in the future, you can expect to see more fun ways to earn money with crypto.
However, before investing your time or money, conduct thorough research to determine if you’ll get a return on investment and avoid running into scams.
Written by Edmond K.