Today I am here with the most exciting topic of the year. How to make money with Bitcoin in India in 2023? No doubt this is the most Googled topic of the year and keeping that in mind I have categorized every step for your better understanding of Bitcoin.
Bitcoin initially started in the year 2009 and since the last few years has taken the market like anything and people has eagerly started searching about it every now and then.
Bitcoin was created as a decentralized alternative to banking systems. This means that the system can operate and transfer funds from one account to another without any central authority.
Now, let’s jump directly how to make money with Bitcoin, and understand every term related to it.
What is Bitcoin?
As the name suggests Bitcoin is an electronic currency but unlike government-issued currencies, there is no single entity that issues Bitcoin or is in charge of processing its transaction.
In a simple way, Bitcoin is a digital currency which aims to do away with all the problems that we have paying for things online.
It is basically virtual money you can use to buy and sell things online and it mimics real-world limited resources like gold for instance.
How Bitcoin came to existence?
In the year 2008, a document was published online by a person named Satoshi Nakamoto. The document also called a whitepaper, suggested a way of creating a system for a decentralised currency called Bitcoin.
This system claimed to create digital money that solves the double-spend problem without the need for a central authority. At its core Bitcoin is a transparent ledger without a central authority.
Now, let’s understand how does it actually works.
Let us compare this Bitcoin to the bank. Since most money today is already digital, the bank basically manages its own ledger of balances and transactions.
However, the bank’s ledger is not transparent and it is stored on the bank’s main computer. You can’t sneak a peek into the bank’s ledger, and only the bank has complete over it.
Bitcoin on the other hand is a transparent ledger. At any point in time, I can sneak a peek into the ledger and see all of the transactions and balances that are taking place.
The only thing you can’t figure out is who owns these balances and who is behind each transaction. This means Bitcoin is pseudo-anonymous; everything is open. transparent and trackable but you still can’t tell who is sending what to whom.
How does Bitcoin work?
Here are some ways you could acquire Bitcoins. Accept them as payment for goods and services, exchange them for a more traditional form of currency, or you can mine them.
Just like Gold, Bitcoins are mined. Not by old timing, grizzled prospectors, but by powerful computers and like gold the more people mine Bitcoins, the less there are to be found, so they become harder to find.
So instead of physically mining with a pickaxe, you can attempt to solve math problems with a computer. With little competition the problems are easier to solve but when more people join the search you have got a race and the problems get more difficult, but as Bitcoin mines dwindle, the math problems will get easier again to ensure the flow is steady, their value is boosted, and they remain inflation proof.
Not all have been mined yet and, we expect they won’t be until around 2140.
What is Cryptocurrency?
Cryptocurrency meaning is that it is encrypted in a way that prevents it from being copied. Here every Bitcoin transaction is recorded using Blockchain.
This information acts like a ledger that is encoded onto the Bitcoin itself. This prevents people from spending the same Bitcoin more than once since everyone else on the currency’s peer to peer network knows that it just was spent.
Cryptocurrency is a global phenomenon knows by most people but understood by few. You will have a hard time finding a major bank accounting firm software company or government that hasn’t researched cryptocurrencies or started a blockchain project.
Now, How we can make money with Bitcoin?
- Bitcoin Mining
- Buy and Hold Bitcoin
- Trading in Bitcoin
- Accepting Bitcoin as payment
- Bitcoin Lending
Bitcoin Mining
Bitcoin mining, yes you can make money with bitcoin. It is called mining because of the fact that this process helps “mine” new Bitcoins from the system. The main goal of mining is to maintain the ledger in a decentralized manner.
Anyone who wants to participate in updating the ledger of Bitcoin transactions, know as the blockchain can do so. All one has to do it guess a random number that solves an equation generated by the system. The guess is obviously done by your computer. The more powerful your computer one has, the more quick guesses you can do per seconds.
If you pass the above guess, you earn bitcoin and get to write the “next page” of Bitcoin transactions on the blockchain.
Let us understand this process in much easier way that you can make money with bitcoin mining:
- Once your mining computer comes up with the right guess, your mining program determines which of the current pending transactions will be grouped together into the next block transactions.
- Compiling this block represents your moment of glory as you have now become the temporary head of bitcoin who gets to update the Bitcoin transaction ledger known as the Blockchain.
- The block you have created, along with your solution is sent to the whole network so other computers can validate it.
- Each computer that validated your solution updates its copy of the Bitcoin transaction ledger with the transaction that you choose to include in the block.
As this stage completes, the system a fixed amount of Bitcoins and rewards them to you as compensation for the time and energy you spend in solving the math problems. You get paid any transaction fees that were attached to the transaction you inserted into this block.
Buy and Hold Bitcoin
In this process, it really doesn’t matter how you earned Bitcoin, but you have got it. You will greatly benefit by holding on to it. This is a passive strategy meaning once you have Bitcoin in your possession there’s really no more work to do at all. All you have to make sure is your wallet is secure that’s it.
The reason you will make money over time is that Bitcoin is going to continually go up in value and the reason it’s going to keep increasing in value is mainly because of its scarcity.
Bitcoin is often referred to as digital gold because it has a lot of similar characteristics as gold.
Trading of Bitcoin
Here we are with type 2 where we can trade bitcoin to make money with bitcoin. Traders view Bitcoin as an instrument for making profits. Sometimes, they don’t really care about the technology or the ideology behind the product they are trading.
Of course, people can still trade Bitcoin if they do care about it. And many people out there invest and trade at the same time.
Types of Traders
- Day Traders: It involves conducting multiple trades throughout the day, and trying to profit from short-term movements.
- Swing Trading: In this trade, the traders try to spot the beginning of a specific price movement, and enter the trade.
Accepting Bitcoin as payment
If you are already running a business then why not you are accepting payments in Bitcoin? There are thousands of companies out there that accept the payments on Bitcoin. And it is one of the easiest way to make money with bitcoin.
As Bitcoin has taken over the world and people are moving forward with cryptocurrencies. There are many businesses that have started accepting payment in Bitcoin.
Industries that accept Bitcoin payment to make money with bitcoin
- Car companies
- Travel companies
- Web hosting companies
- Airlines companies
- Fast-food companies
- Banks companies
- Technology companies
- Non-profit organization
Bitcoin Lending
Bitcoin lending is a one-stop platform for both lenders and buyers. Here borrowers can deposit their crypto assets and take a loan against them lenders can deposit their stable coins or crypto assets to earn a yield on them.
So basically it’s a place where both borrowers and lenders can benefit so in one way if you compare them with traditional banks. The best part of Bitcoin lending is that they deal only with crypto assets and stable coins. And it becomes another way to make money with bitcoin.
Conclusion for how to make money with Bitcoin
Digital currencies are an increasingly important topic for accountants, traders and other types of financial professionals more companies are beginning to use digital currencies in operations or offer digital currency-related services to customers.
Additionally, regulatory issues and best practices surrounding Bitcoin and digital currencies are rapidly developing and with that demand for accounting professionals with expertise in this new domain proactive professionals are therefore now taking the time to fully understand the opportunities.
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