It’s not that easy to start with Bitcoin. Fortunately, many people have already gone through education process. It is not only possible, but also available to everyone! To get started, you need to learn the basics of new technology.
If you can explain with a few sentences what Bitcoin is and how it works, you are going in the right direction. The next step is to get secure BTC address in your wallet. Hence, it’s only a small step to buy on the cryptocurrency exchange.
Suddenly it turns out that the beginnings weren’t that hard and what’s coming is even more exciting. Years after the launch of the Bitcoin project, the market discounts the positive future of many projects and their potential to change the world.
How to start with Bitcoin?
Firstly, find out what Bitcoin is. Quick suggestion: a value transfer method based on blockchain technology. Find the answers to the most frequently asked questions by beginners.
Do I store Bitcoins on my computer? No! You only have access, with your private key, to BTC held by all computers on the network.
Where does the value of Bitcoin come from? From the potential of blockchain technology application and adaptation among people. There are many more such questions.
Get Bitcoin Address. The easiest way to generate it is safely on your own computer. You will learn how to do this from this article.
Learn to secure your private key. Never share it with anyone. Buy a hardware wallet or generate a wallet and password-protect it or encrypt it.
Get Bitcoin. You can easily buy it on cryptocurrency exchanges. Check the list of exchanges and their risks in a cryptocurrency exchanges summary. If you don’t want to buy BTC, check how to get Bitcoin without paying for it.
Keep it or spend it. By holding Bitcoins, you can treat them as a long-term investment or as a method of diversification your savings. By spending cryptocurrencies, you support technology adaptation.
How to start investing in Bitcoin?
Investing in Bitcoin may seem easy, especially when we enter a long-growing market. Sometimes you will encounter calculations of how many percent Bitcoin has grown since its inception. However, we need to find a method of profit here and now.
Cryptocurrency Investing Plan. To begin with, it is necessary to create a plan based on our needs and expectations. What is our investment horizon? What profits do we expect? What risk are we willing to accept? How will we ensure the security of the wallet? These are just basic questions. Consider which group you belong to: traders, i.e. short-term speculators, or long-term investors.
Quick Cryptocurrency Profits via Speculation
If you are going to speculate on Bitcoin and cryptocurrencies, you need the right tools. You will certainly need real-time access to the price of Bitcoin and other cryptocurrencies, preferably on the exchange where trading takes place. Graph drawing and indicator calculation tools are very useful if you are using Bitcoin technical analysis. Read on to find our recommendations.
Get access to current prices and check the Bitcoin rate conveniently. Thanks to price alerts, there will be no need to constantly visit and refresh the page. Create an account on a cryptocurrency exchange that supports traders and has the lowest commissions. Binance cryptocurrency exchange meets both of these criteria (you will also receive a commission refund!). Remember, while making many transactions, you will spend a lot of money on fees.
Long-term investing in Bitcoin
If you intend to invest in cryptocurrencies in the long term, i.e. at least 2 years, you are in a better position. First, you’ll be making fewer trades and spending less on commissions. Second, this method is less mentally stressful. The drops will not be a dramatic experience for you, because you intend to keep Bitcoin for a long time anyway. Averaging strategy is a successful strategy, i.e. buying selected cryptocurrencies for a certain amount of money every month, e.g. $500.
What do you need to become a long-term Bitcoin investment?
- secure wallet, e.g. hardware Ledger Nano S or encrypted paper or software wallet,
- safe cryptocurrency exchange,
- a spreadsheet for tracking progress and calculating your rate of return or an app on your phone for portfolio summary.
How to set up a secure Bitcoin wallet?
Choosing a safe and convenient storage for Bitcoins is crucial for the future of portfolio with cryptocurrencies. Which Bitcoin wallet to choose if you are a novice user? The easiest way, of course, is to keep Bitcoin on the cryptocurrency market, but it’s a short-sighted solution. Cryptocurrency exchanges, despite increasing sophistication and funds allocated for security, are not able to provide 100% protection against the loss of cryptocurrencies, for example as a result of hacking, technical error or a prosaic reason, such as the inability of the user to regain access to the account.
Which Bitcoin wallet to choose?
The solution to security dilemmas is simply taking over responsibility for protecting digital assets. It is therefore necessary to personally look after the security of the Bitcoin portfolio, which involves securing the private key under investors own control. The best choice for most users is a hardware wallet, such as Ledger or Trezor, where the private key is securely encrypted. The best Bitcoin wallet is therefore a secure hardware solution, physically similar to a usb flash drive. Another option is the Bitcoin wallet installed on a secured computer, disconnected from the internet on a daily basis. There are many solutions to choose from, such as Bitcoin Core, Electrum, Mycelium, Armory and many more. It is also worth to buy Bitcoin wallet on a mobile device, in this case we can choose from Bitcoin Wallet, Mycelium, Bither, BRD, Edge, Electrum.
What to check when getting a BTC wallet?
Since we already know that for the safe storage of Bitcoin, you need a wallet, let’s see how to take a step-by-step approach to creating a Bitcoin wallet. Of course, if we choose a hardware solution, we will be carried out step by step through all the complexities of configuration and use of the Bitcoin wallet hardware.
How to set up a Bitcoin wallet if we have it on a computer or mobile device? The most important are the following stages:
- make sure that you have full control over the device (computer, laptop, smartphone), because the most important factor determining safety is usually a person. Select a wallet installation on a device that only one user has access to and that is thoroughly checked for threats from viruses or unauthorized access, also via an Internet,
- check if the software you are downloading comes directly from the producers’ or wallet’s website,
- install the wallet and use all available security methods: difficult password, two-way confirmation (2FA), pin, and other available ways
- secure your portfolio backup in a location that is inaccessible to others and safe for long-term storage
Creating Bitcoin wallet step by step: Exodus
To set up a Bitcoin wallet, make sure that you go to the wallet manufacturers’ website, not the page that pretends to be legitimate and intended to infect your computer.
For example, the Exodus cryptocurrency wallet page can be found at exodus.io. The “Downloads” page with applications for specific operating systems allows you to choose the right version.
In order to fully use your wallet, you must first transfer funds there. If you do not yet have Bitcoins, use the cryptocurrency exchange that meets your expectations for ease of use and risk level. We recommend Binance with a lowest commissions offer.
The first transaction will allow two things:
- setting the wallet access with password. Remember that the password has to be secure! The most common problem of cryptocurrency users is … forgotten password, so it must also be memorable. Use secure password storage solutions such as LastPass.
- creation and saving of the so-called seed, an emergency key that allows you to recover your wallet. The key usually consists of 12 or 24 words. Remember to NOT store it on your computer, but in a safe offline location.
And that’s all! You can now use the Exodus wallet, accept and send cryptocurrencies from your computer. The list of crypto accounts supported by Exodus is long and has over 100 items. These are among others:
Bitcoin BTC, Ethereum ETH, Bitcoin Cash BCH, Litecoin LTC, Tron TRX, Dash DASH, Binance Coin BNB, Monero XMR, Ethereum Classic ETC, EOS EOS, Zcash ZEC, Bitcoin Gold BTG, Bitcoin SV BSV, Lisk LSK, Waves WAVES, Loom LOOM, 0x ZRX, Aeron ARN, AirSwap AST, Appcoins APPC, Aragon ANT, Ark ARK, Augur REP, Bancor BNT, Basic Attention Token BAT, Bread BRD, BitTorrent BTT, ChainLink LINK, Cindicator CND, Civic CVC, Crypto.com MCO, Decentraland MANA, Decred DCR, DigiByte DGB, DigixDAO DGD, Districtx DNT, Edgeless EDG, Ethos ETHOS, FunFair FUN, Genesis Vision GVT, Gnosis GNO, Golem GNT, IExec RLC RLC, Kyber Network KNC, Loopring LRC, Lunyr LUN, Maker MKR, Matchpool GUP, Metal MTL, Mithril MITH, NEM XEM, Neo NEO, Numeraire NMR, OmiseGO OMG, Paxos PAX, Po.et POE, Polymath Network POLY, Populous PPT, Power Ledger POWR, Quantstamp QSP, Raiden RDN, Request REQ, Ripio RCN, Ripple XRP, SingularDTV SNGLS, Status SNT, Stellar Lumens XLM, Storj STORJ, Storm STORM, TenX PAY, TrueUSD TUSD, USD Coin USDC, Viberate VIB, Wings WINGS, Gemini Dollar GUSD, Qtum QTUM, AdToken ADT, Amber AMB, BnkToTheFuture BFT, Dai DAI, Dent DENT, Dentacoin DCN, Dragonchain DRGN, FirstBlood ST, Iconomi ICN, Kin KIN, Kucoin KCS, MediShares MDS, Melonport MLN, Pillar PLR, Qash QASH, Revain R, Rivetz RVT, Salt SALT, Santiment SAN, TAAS TAAS, Tether USD USDT, Time New Bank TNB, Veritaseum VERI, Waltonchain WTC, Wax WAX, WeTrust TRST.
Can Bitcoin wallet be treated like a Bitcoin account?
Quite popular question is from people who think about the cryptocurrency market as an analogy to banking or websites. Often, however, without knowing the popular names from the Bitcoin industry, it is difficult to orientate well at first. We think, therefore, that being synonymous with how to set up a Bitcoin account would simply be setting up a place to store Bitcoins.
The easiest way is to get the Bitcoin address (check the instructions: how to quickly get the Bitcoin address), although you do not need complicated technological configuration done by yourself to start with cryptocurrencies. For the start you can use the address of the cryptocurrency maintained by the cryptocurrency exchange or another service that deals with the sale or transfer of cryptocurrencies. From there Bitcoin can find a secure, hardware wallet, paper wallet or address configured on a secure, disconnected computer. Use the instructions above to set up your Bitcoin Exodus wallet and use a secure solution on your computer or smartphone. After installing the wallet, you already have a safe place to store cryptocurrencies, it’s a good time to start investing in cryptocurrencies!
How to choose a password for the Bitcoin wallet?
Your digital money password should be strong and secure. What rules should guide the user who chooses a secure password for the cryptocurrency wallet?
- Never use the same password multiple times
- It has been assumed that a strong password consists of upper and lower case letters, numbers and special characters
- Use a secure password manager such as LastPass or KeePass
- Don’t use secret questions or hints, as these are potential places to attack
- Never share your passwords or read them aloud
Don’t use popular passwords!
Common passwords are a very common cause of trouble! Under no circumstances should you use the most popular passwords. Using weak phrases is one of the easiest ways to grant unauthorized access. Check if you use an unsafe password on the list of the most popular passwords. You can immediately tell that “password” or “12345678” do not meet the security standards.
One of the xkcd comics has an interesting way to generate a simple method for a manageable password that meets the security criteria. We leave the decision to the users.
How to get Bitcoin address in 60 seconds?
Using cryptocurrencies starts with having an address. The address consists of a private key that should be discreetly protected and a public key that is an identifier. We pass the public key to the other side of the transaction to transfer funds to or manage transactions.
Bitcoin address in the form of a public key will be more often seen and might seem to be more important. However, it is really an irreversibly encoded private key that needs the most attention and security.
What is my Bitcoin address?
A Bitcoin address is an identifier that represents a possible destination for a bitcoin payment. It is beginning with the number 1 or 3 and consists of 26-35 alphanumeric characters (a-z and 0-9).
If you like to have control, you probably will secure your private key on your computer or offline device. If you would rather delegate security or storage hassle to others, you would use cryptocurrency exchange or online wallet service, at the cost of more risk.
How to easily get Bitcoin address?
Consider the following options:
- The easiest way to generate a BTC address is using the Bitcoin BitAddress.org address generator, running in the client’s web browser. After visiting the site, just move the cursor or write any of the characters to add randomness … and it’s ready. Then, save the address in the form of a public and private key as a pdf and store it in a safe place. It will be useful to copy the public part that will serve as an ID or directly to the transaction. It took less than a minute, right? This way you also get anonymous bitcoin wallet.
- The most popular online services for Bitcoin wallets such as Blockchain.info or Coinbase also provide address support, including the secure storage of private keys. These options, however, are not recommend as a way to store cryptocurrencies in long-term.
- Cryptocurrency exchanges, such as Binance, will also provide the bitcoin address. They are accepting cryptocurrency transfers to such an address. Balance will appear on our account in a given stock exchange. However, we do not recommend this method as it depends on exchange’s credibility.
- The offline, hardware cryptocurrency wallet is one of the safest ways to store Bitcoin. The wallet in the form of a usb device also has an address – a public key, and the private key is stored securely in the device. Check out test of one of cryptocurrency wallets: Ledger Nano S.
As you can see above, there are a few solutions to choose from. We recommend full control over cryptocurrency portfolio, i.e. the shortest route: generating and saving the address by the browser (point number one above). Which way was right for you?
Your own private key and Bitcoin address generator
For advanced users, it is possible to securely generate a private key using programming language Python.
We have three types of BTC addresses that are in use:
- P2PKH, starting with “1”
- P2SH, starting with “3”
- Bech32, starting with “bc1”
They are all correct and allow you to accept BTC transactions. Additionally, they are all subject to privacy rules, one of which is very important. One address per transaction. This rule explains the lack of popularity of vanity addresses.
So let’s tackle the topic of BTC address generation as an application in Python. Where did this idea come from? It all started with the vanity address generator. There are several sites that allow you to generate a vanity address for free, up to a few characters, and for a fee in BTC for a longer address.
Such a service should trigger wa warning for the careful readers. Generating a private key on an unknown website is against the basic security principles. However, if someone really wants to have a BTC address generated completely at home, how to do it?
A simple solution is to use the bitcoin library (pybitcointools). We install it with the
pip install bitcoin command.
Then we check the list of available functions and discover that there are several solutions for manipulating the keys ready. Our private key generation program will look like this:
#import only necessary functions
from bitcoin import random_key,privkey_to_address
#generate private key and assign it to the variable
private_key = random_key()
#use generated private key to generate BTC address and assign it to the variable
address = privkey_to_address(private_key)
#display private key and the address
The result of the program can be seen here:
The generated address is ready for use.
Private key: 17ddeca952210880cfe74acbe3a5f8381fcc0d9b535c2bf4fd661a28fbb47308
Public key: 14xfXuMtLb3Je1U82YJCND5AxvQB4AXZww
What to do with them next? You can send BTC to the public key. We have a Bitcoin address that can be used to receive BTC.
What good practices should we remember? Bitcoin addresses are one-time and should not be used repeatedly. Using the same address multiple times is associated with higher BTC fees, security and privacy issues, and a higher chance of accidental loss of funds.
Likewise, you should be confident that the funds are “at btc address”. It often happens that sending the BTC fraction causes that the rest will also be sent to the “change address” (address with the so-called rest). Modern wallets automatically secure these addresses. In the case of addresses generated by us, we need to understand the basics of technology and protect ourselves properly.
The best description of Bitcoin was written by… the US Central Bank
Due to the fact that Bitcoin and cryptocurrencies are a developing technology, still most people in the world do not know what cryptocurrencies are and what the benefits of Bitcoin are. We are already after two market bubbles with cryptocurrencies, and yet less than 4% of the US population declares that they own cryptocurrencies. It is still not enough to reach the critical mass. Guides and news portals try to fill the knowledge gap. However, this task was best fulfilled by… the FED, the US Federal Reserve Bank. They published an excellent document explaining the principles of operation, advantages, disadvantages and the use of blockchain-based cryptocurrencies.
The BTC introductory document is the best invitation to cryptocurrency that anyone with a basic knowledge of English can find. There is no need to be familiar with computer science, cryptography, economics and mathematics. Written in plain language, divided into clearly defined sections.
- A short history of Bitcoin with a description of its implementation.
- An explanation of what cash and digital money are and how they work, with an appropriate historical context.
- The mathematical foundations of Bitcoin.
- Bitcoin mining and a mechanism for deciding on the future of cryptocurrency.
- Monetary policy in the world of cryptocurrencies.
- How do Bitcoin transactions take place and how are they secured in the absence of central management?
- Potential future use of cryptocurrencies.
- The risk of Bitcoin and cryptocurrencies.
By reading this document, we learn the basics of cryptocurrencies, presented in simple language and described with graphics. Even more pleasing, the bankers’ conclusion is as follows: cryptocurrencies are a welcome and warmly welcomed addition to the global monetary system. It’s so nice that you can start to be suspicious…
What do you need to know about BTC price?
Cryptocurrencies, like any new market in its early stages, are very volatile. Bitcoin can fluctuate by several dozen percent in the short term. If the cryptocurrency investor’s goal is to speculate, he must keep an eye on the rate even several times a day to avoid an unpleasant surprise. The place where we will check the cryptocurrency prices depends on what accuracy we expect and what form of data is the most convenient for us.
Coinmarketcap is the most popular website that allows you to check the price of the most important cryptocurrencies. It shows the rate, market size, change in the last 24 hours and cryptocurrency ranking. Coin360 allows you to check cryptocurrency prices, a graphical representation of the market size (interesting comparison) and the daily shift. CoinPaprika recently hit the Bitcoin price processing website and has gained a lot of users.
The price on the exchange we use. Whether it’s Binance, Bitfinex or another exchange, you can always quickly check the price at which the last transaction was made.
Charts for cryptocurrency traders
Tradingview – Exact price flow, available directly on TradingView or through exchanges such as Kraken. It is useful to be able to draw a pattern, mark up chart
Tradeblock – up-to-date charts that allow you to draw technical patterns.
Bitcoincharts – not only current charts, but also technical analysis tools and tracking exchanges in various currencies.
Checking the current rate of bitcoin and cryptocurrencies is extremely popular among investors. Some people can refresh the price page multiple times a day. This is mainly due to expectations of progress in earning tokens for value, as has been the case in the past. Will they be satisfied and bitcoin will hit $100,000 is one thing, and the other is the extent to which investing in cryptocurrencies affects your daily life… Maybe checking once an hour is a bit too often after all?
Bitcoin exchange rate on your smartphone
Typing “bitcoin rate” in the address bar and going to the page with the price can become a habit, especially if we have expectations about the direction of the cryptocurrency value chart (always up?!). It’s easy to believe in a quick profit looking at historic gains fueled by analysts’ predictions of reaching $10,000, $50,000 or even a staggering million dollars for 1 BTC. Why not alleviate the fear of losing an opportunity by frequently checking where the price level of the cryptocurrency we have is located? The most convenient way to check it is on your smartphone, and the easiest way is to simply use one of the many websites showing the Bitcoin rate.
What if something more is needed? There are Android applications for this – there are many cryptocurrency applications, but the most popular are:
Coinbase Bitcoin wallet (Android – link to Google Play). The application allows you to manage the Coinbase wallet, in addition to, of course, checking the Bitcoin rate. It is distinguished by a nice and modern look.
Blockfolio (Android – link to Google Play). Allows you to control your cryptocurrency investment portfolio. The ownership status of each crypto is entered and the wallet converts the current value in currency. You can also check the portfolio value history and performance.
Remember, however, that too much is often unhealthy. Cryptocurrencies have so far allowed you to earn huge profits, but it is not worth checking the rate to dominate productive activities or family life.
BTC price volatility
Tracking Bitcoin’s price is sometimes like riding a roller coaster. Going downhill squeezes unpleasant feelings out of the stomach, and uphill runs are euphoric. How to find yourself in an act that is highly volatile?
Why is Bitcoin’s price rising?
Considerations about the sustainability of the uptrend in cryptocurrencies actually continue throughout the cycle. Breaking through the levels of “round” Bitcoin prices is a good indicator of the progress of the trend. The price then hovers around a higher level, with the trend being confirmed (or not) by altcoins. Often, projects rest from gains in previous months for several consecutive months.
What about the long-term average BTC rate? Let’s be honest, $6000 per BTC is not an exorbitant price. Tens of thousands of investors were able to pay over three times more for BTC units at the peaks of the price couple of years ago. How much participation in blockchain technology will be valued in the coming years will be determined by the market. This time, however, investors can decide to buy earlier. Even the information about the troubles of the Binance exchange (loss of 7,000 BTC from the hot wallet) did not cause a permanent drop in Bitcoin prices. Moreover, the short break in growth only lasted for a moment. Perhaps it was the strong support of the cryptocurrency community and industry influencers that decided here?
From the times when we had rapid gains, the ones from 2017 are the most memorable. So we are surprised to see similar actions, which brought significant price increases. For example, BTC reached the price of $7,300 in 2019 and thus saw a 20% increase in… a week. Only very small and speculative projects, the growth of which cannot be predicted, can boast of this result. This sequence of things confirms the good decision of those who bought or added to their portfolio in the Bitcoin botton at a price of around 3-4 thousand dollars.
What to do during sudden events in market prices?
It is worth using common sense and not buying panically rapidly growing prices. Market volatility is characterized by retreats that can bring prices lower than we defined the starting level. This is when you need to be disciplined and buy when the market is in a worse mood. Markets are likely to face a pause in gains in the near future due to a dramatic sell-off. In this situation, it is worth remembering to optimize costs by using a cryptocurrency exchange with low commissions. Traders, especially those using bots or algorithms, most often use a proven exchange that allows you to play with leverage. Not listening to your emotions and investing strictly according to your plan are the key.
Bitcoin Key Price Levels
The general public seems to be completely ignoring the cryptocurrency price rises. We admit, no surprise, this is perfectly normal. People who entered the market during the bubble still remember how painful the losses are. The second, very large part of investors still remember and feel disappointed that they had cryptocurrencies with huge virtual profits at the peak of prices at the end of 2017 and… did not realize profits. Neither one nor the other group is currently contributing to the supply. This phenomenon is characteristic of lightning-fast spikes as the order books are filled with small sell orders from market makers and small sales from conservative investors.
It was the lack of supply from big money, tough investors and miners who regained vigor after the carnage that swept the industry for 12 months after the bubble that supported the gains. The fact that projects solidify and most of the major players are organized around a strictly business concept helps a lot. Appearance of the DeFi surely helped as well.
To what extent does the speculative aspect work here? The market seems to be halving on BTC, which has less than a year to go. Moreover, the artificially prolonged end of the economic cycle means that a lot of speculative capital is still circulating in the market, which is looking for its opportunities. There are many more paths to the cryptocurrency market than just 2-3 years ago.
How do key price levels work on other cryptocurrencies?
All cryptocurrencies on the list of the largest projects increased rates by significant values. Ethereum grew along with Bitcoin and surpassed the critical level of $200 and then $300 and $400. The increases on ETH are overshadowed by the work on changing the PoW algorithm to PoS, which, unfortunately, is still a long way to go. Meanwhile, Ethereum is firmly in second place in terms of capitalization.
Ripple is back at twenty cents. Despite concerns about the centralization of this project, investors are still eager to buy XRP, and the project’s capitalization is almost twice the value of another project, Litecoin. LTC, on the other hand, benefited from the halving rally which fell out. The price for 1 LTC rose to nearly $140, then fell to a steady level of around $40-$50. Fifth on the list of Bitcoin Cash capitalization, after the split with Bitcoin Cash SV gained in value, but Bitcoin SV lost. Both projects together cost around $400-$500 dollars.
Why is Bitcoin price falling?
The question about the falling price of Bitcoin became the most frequently asked question just after the breakdown of the support on the chart after the price peaks at the turn of 2017/2018. Several dozen percent? We are trying to answer the question why Bitcoin is falling?
One of the bolder hypotheses is that Bitcoin is falling because it has just increased too much. The BTC exchange rate was too high given the demand for Bitcoin and the supply of mined BTC units sold on an ongoing basis to cover the rising costs of infrastructure maintenance. Some entrepreneurs and investors started selling their BTC only because the high price of BTC allowed for a significant improvement in their quality of life thanks to exit from the investment. At the beginning of the “bubble”, the growth was favored by a small number of cryptocurrency exchanges that could not keep up with the supply of bitcoin to willing investors. At the end, exchanges were flooded with liquidity by investors wanting to panically exit the market. What is happening in the second decade of the project? We are likely to face another cycle of ups and downs.
Important BTC data sources
Data on price movements, block mining and mining activities and much more valuable information can be found on Bitcoinity. The statistics of the major cryptocurrencies are in a convenient form at BitInfoCharts and Blockchain.com.
Calculating BTC transaction fees will make Bitcoin Fees much easier.
Lots of charts with indicators to help you make investment decisions on the Woobull website.
How to mine Bitcoins?
If we go back a few years and look at the landscape of the Bitcoin world, we will discover that one of the easiest ways to get BTC was Bitcoin mining. It was enough to get a graphics card (previously a CPU processor) to work and after a few weeks we could enjoy a fraction of Bitcoin. Those times are over. Bitcoin and most cryptocurrencies are mined using specialized equipment, the acquisition of which is associated with an investment.
Bitcoin mining takes its popularity from several factors. The main one comes from the past and exceeded expectations of those who mined Bitcoin on their home computers and made huge profits selling during the speculative bubble. Another important aspect is the fact that you can make a tangible profit with computer hardware. Yet another factor is that Bitcoin mining is not at all difficult from a technical perspective, especially in light of the large number of guides.
How do you start Bitcoin mining assuming it is an attractive and potentially profitable activity? The easiest way is to buy a specialized Bitcoin mining device from a Chinese manufacturer. It is worth remembering, however, that the computing power of such a device is subject to inflation, i.e. the amount of mined cryptocurrency units tends to decrease over time, due to technological progress and a race with other Bitcoin miners.
How does professional Bitcoin mining work? The functioning of the Bitcoin blockchain depends on people who are mining Bitcoin. It has one goal: to find, through complex calculations, the appropriate algorithm result, thanks to which the blockchain grows by one block with new transactions every 10 minutes. Bitcoins are currently most effectively mined using specialized devices, e.g. Bitmain, Innosilicon, Canaan, GMO, Bitfury or Ebang.
What is a Bitcoin miner?
Now that we know what Bitcoin mining in general is, let’s check the term bitcoin miner and what is a Bitcoin miner. It is a device that is used to perform calculations that result in maintaining the Bitcoin blockchain. Due to the built-in earning potential for “hitting” a block, the simplest understanding of a Bitcoin miner is an endeavor to convert electricity into digital assets, in this case Bitcoin. The main activity of cryptocurrency miners is therefore to secure enough cheap electricity for the entire project to be profitable.
A Bitcoin miner is usually equipment from an Asian manufacturer that competes with others for increasingly economical calculations in terms of energy consumption. The most popular Bitcoin mining devices are Bitcoin miners: Antminer S15, Innosilicon T3, ASICminer Zeon, GMO Miner B3, Ebit E11 ++, DragonMint T1.
How to start mining Bitcoin, despite the numbers?
Some cryptocurrency users and investors see the benefits of mining Bitcoins, so they wonder how to start mining Bitcoin? Let’s take a step-by-step look at this process.
It is worth starting Bitcoin mining by considering whether the investor is able to get electricity at a price that will allow Bitcoin to profitably mine. If not, then the entire business is at risk, where the BTC price could drop so low that it would be impossible to recover your investment and make profits in the short term. For this reason, the price of electricity and adequate financial liquidity are important.
If we have solved the problem of cheap electricity, the next step is to select the appropriate devices, preferably from one manufacturer, to facilitate configuration and maintenance. You can choose from Bitmain, Innosilicon, Canaan, GMO, Bitfury, Ebang miners, among others.
Then arrange the place where mining will be made: it must be safe, dry and meet the manufacturer’s requirements for temperature and ventilation. An industrial contract with an electricity supplier or a favorable tariff breakdown will certainly come in handy. As you can see, the first steps to maintaining a Bitcoin mining company are simple, but the details of the process of starting Bitcoin mining can take a lot of effort and negotiation.
Where and how to buy Bitcoin?
When the decision to buy Bitcoin is made, the question remains where to buy BTC? The answer to the question of where to buy bitcoin is often limited to only a few options, which include the possibility of buying small amounts of BTC from friends or relatives. In almost every family there is a young, talented person who knows computers, this person has certainly heard about Bitcoins.
The answer should start with specifying in what form we want to pay for Bitcoin? If we just want to buy some BTC to get to know the technology, we can do it with the help of friends or family, if there is someone more experienced in this group. You can also visit the BTC association, local group or a thematic conference where specialists will help you take the first steps.
What are the BTC purchase options?
For those who want to solve these issues on their own, the simplest option seems to be a cryptocurrency exchange such as BitBay or Binance, where you can make a deposit using a bank transfer or credit or debit card. You can also use a Bitcoin ATM that will accept cash and send the purchased Bitcoins to a mobile wallet, e.g. on a smartphone or a QR code printed on paper. As you can see when it comes to Bitcoin, how to buy seems already available to anyone, even the less advanced internet user.
There are several options for purchasing Bitcoins.
- A cryptocurrency exchange, the most popular of which is Binance.
- Bitcoin ATM, i.e. a device that allows you to buy or sell cryptocurrencies. They are most often located in popular places in large cities, such as shopping malls or railway stations.
- Cryptocurrency brokerage services, such as Paxful or LocalBitcoins or projects operating on existing blockchain ecosystems.
- Buying Bitcoin from friends or acquaintances.
How to buy Bitcoin with a native currency?
For those who want to quickly start investing in Bitcoin, the easiest way seems to be simply to buy Bitcoin for 1 unit of the currency. First, the easiest way, as your intuition tells you, is to simply pay in cash to someone who wants to sell you Bitcoin directly. We can find such a possibility:
- among friends and their acquaintances
- on websites that connect people willing to make transactions in Bitcoin, e.g. LocalBitcoins
in Bitcoin ATMs
- in cryptocurrency hubs and associations, which are most often in the largest cities
If you do not want to look for a specific person, you can use the services of cryptocurrency exchanges that allow you to pay in, e.g. by internet transfer or money order. It is worth remembering that in this way we get rid of a large dose of privacy. Bitcoin purchased in this way, e.g. on the BitBay exchange, can be paid to a Bitcoin wallet on a computer, mobile or paper or hardware wallet.
Do you have to pay attention to anonymity?
First of all, how we are going to pay for Bitcoin is important. If it is cash, we are going to make the transaction in person (with the benefit of anonymity if we take care of it in advance). In the case of an electronic transfer, the transaction will be saved in the bank’s archive and the user may be asked to verify his identity by the cryptocurrency exchange.
The second important issue is the need to have a Bitcoin address to which the purchased BTC units will be received. After all, the question of where to buy Bitcoins is practically no longer a problem, even for a novice user. The choice of the place of purchase and payment method allows you to adjust the process to the user’s needs.
How to start earning Bitcoins?
People who appreciate the power of blockchain technology consider getting paid in Bitcoin. This is not yet popular in businesses where it is easy to pay by bank transfer or cash, but the situation is slowly changing. It is certainly easier for technically gifted employees who operate on the Internet or in services, although thanks to innovative projects, Bitcoin payment methods reach more and more entrepreneurs. So what to do when we want to receive Bitcoin for our work?
Earning in Bitcoins can start with a simple question to the employer or customers if they would consider settling in BTC. Most of those who themselves did not receive such an offer followed this path. Entrepreneurs who operate in the service or sales industry may consider implementing smartphone-integrated payment terminals for accepting cryptocurrency payments. If you are just starting work or if you are still studying, try to provide services on the Internet for which you will get Bitcoins.
There are people who count on the short-term benefits of cryptocurrency. An enterprising person will benefit from the technology itself, its implementation and use. We know a few proven ways to enter the Bitcoin earning industry:
- if you believe Bitcoin will rise in value, simply buy BTC and hold it until it reaches a high value. It is best to buy the cheapest cryptocurrency exchange with the lowest commission.
buy bitcoins and sell them on commission to people who want to buy them safely
- expand a service that will solve a specific problem, e.g. with payments or billing
- speculate on the Bitcoin market with a lever
- gain knowledge and work with an employer (most often corporations, but also fintech and startups) who is looking for a blockchain specialist
- take part in bounty hunting, airdrops, referral programs and other activities to popularize Bitcoin
The ways to earn Bitcoin
People who ask how to earn money on Bitcoin probably have a long-term vision in their heads, where they participate in the development of the cryptocurrency market and profit from it. It is therefore about earning regularly on Bitcoins. Here, many activities that will allow you to earn regular income from Bitcoin come in handy:
- Cryptocurrency mining we have covered in detail from scratch in our beginner’s guide to how to mine cryptocurrencies. Take into account that this involves an investment!
- Setting up a startup or venture that solves a specific problem or provides a product or service. It can be a regular service, or a more complex model, such as a token for storing and transferring values, or even Blockchain-as-a-service.
- Freelancing for Bitcoins.
- Daytrading on the BTC or ina altcoin markets, including arbitrage and looking for opportunities on new tokens.
- Implementation and maintenance of Masternodes.
- Dividends from cryptocurrency projects such as Cosmos, Algorand and Tezos.
- Possessing Proof-of-Stake cryptocurrencies such as Neo, Vechain or the above-mentioned ATOM, ALGO or XTZ and collecting payouts for it
- Having cryptocurrencies that pay out airdrops such as Tron and BTT
Earning on BTC step by step
Now that the idea that you can make money on Bitcoin and we already have a general answer on how to do it, let’s try to go a step further. What steps exactly to start earning Bitcoin?
If you are new to cryptocurrencies, get your first free Bitcoin with our BTC Collecting Guide (very small amounts that will be used to get into practice).
- Create an account on the cryptocurrency exchange with the lowest commissions and try your hand at speculating on the Bitcoin and altcoin market.
- Have in your portfolio cryptocurrencies based on Proof of Stake, such as Neo, Tezos or Cosmos. You can buy them with Bitcoins and receive additional cryptocurrency just for owning them. Remember that their value fluctuates and may drop.
- If you have technical skills, try maintaining the masternodes.
- Mine Bitcoin or other cryptocurrencies.
- Get some experience starting with the ways above and work your way towards more difficult topics.
How to sell Bitcoin?
This may seem like a distant perspective at the moment, but it will become reality at some point. The time will come to sell cryptocurrencies. Those who bought a few years ago have multiplied their capital. Others who have bought at higher prices also have a chance to end the investment with more value than at the beginning. The following questions arise: how to sell Bitcoin? How to cash in cryptocurrencies to keep their value and safely transfer them to a form that will be more useful: cash, currency on a bank account, dollars, euro, tokens or other investement?
Suppose you already have Bitcoin and are thinking how to revert back to traditional currencies like euro or pound. Ideally to the person, who would like to add more cryptocurrencies to their savings or investments.
If there is no such opportunity, cryptocurrency exchanges will come to the rescue. Most of them allow you to sell cryptocurrencies and withdraw money from this sale to your bank account.
An anonymous solution is to use Bitcoin ATMs, which are found in most large cities around the world. However, it is worth remembering that then you will pay a commission of several percent.
Be sure to check your local laws when selling Bitcoin. In most countries, when selling cryptocurrencies to the regular currency, there is a tax obligation, similar to capital gains.
How to withdraw money from Bitcoin?
The question of how to return to national currencies will appear sooner or later in the mind of every investor. Whether the investment is profitable or when an emergency or opportunity forces the investor to cash in on his or her holdings, there are several important issues. Therefore, we check what conditions an investor must meet in order to withdraw money from Bitcoin.
First, you must have control over the address where the Bitcoin is located. In the case of a long-term investment, the private key discovery process can be complicated, including trying to recover backups. In the case of cryptocurrency exchanges, it is necessary to control the e-mail address and the device for two-step authorization.
Second, the sale of Bitcoin to currency can be made in a few places. Whether the choice is a broker, cryptocurrency exchange, Bitcoin ATM or a private person, it is worth remembering about basic security measures and common sense.
Third, you need to remember about the tax settlement if you have made a profit from the sale. In Europe, the tax on profit could be analogous to capital gains.
What can you buy using Bitcoins?
Thanks to the rapid adaptation, more and more sellers and service providers make it possible to pay in Bitcoin. The number of companies that accept BTC is expanding every day, especially as there are more and more ways to reduce fluctuations in the exchange rate of a cryptocurrencies. One of the easiest ways to preserve the value of your cryptocurrency wallet is to quickly convert a large chunk to stable coins. Thanks to this, entrepreneurs avoid volatility, thanks to which their cashflows are more stable.
The customer gains the opportunity to pay with Bitcoin for goods or services. So let’s check what can be bought with Bitcoin?
- electronic products (computers, laptops, electronic equipment), e.g. on Overstock or Newegg
gift cards, e.g. via Gyft or eGifter
- flight tickets and accommodation, e.g. on Expedia or Cheapair
- Microsoft products and services
- local shops and services, the lists of which are kept by, among others Spendbitcoins or Coinmap
- VPN, WordPress, Reddit and many more.
As you can see, the list is not limited to electronic services or closed to internet products. For those who value activity and the ability to move around, it is a very good idea to use cryptocurrency payments for airline tickets and hotels.
One of the largest mobile telephony operators in the United States, AT&T introduced Bitcoin payments. This is one of the most important events in the context of Bitcoin adaptation in the world, because if its competitors notice that AT&T has gained an advantage thanks to this, they will also enable BTC payments.
The Dish satellite distributor has joined large enterprises for a wide range of customers that enable cryptocurrency payments. In Canada, Bitcoin can be used to pay at KFC and Subway, popular restaurant chains. In India, users of Nafa gift card store can pay with Bitcoin. Another service offering cheap accommodation, car rental and flights, More Stamps Global, also enabled customers to pay in cryptocurrencies.
According to the CoinMap website collecting data on places where you can pay with Bitcoins, there are almost 20,000! They are mainly found in urban areas of North America and Europe. As you can see, adaptation is progressing and the number of places increases every month. Do you know any interesting and worth publishing places in your area, where you can pay with BTC?
Speculating on Bitcoin halving
There is a belief among the cryptocurrency community that halving performed at specific intervals has a positive impact on the price of the cryptocurrency. As it turns out, an in-depth study of the subject reveals that it is not so obvious.
What is Bitcoin halving?
Halving is a feature of Bitcoin where the reward for “miners” for the block decreases every 210,100 blocks, which takes approximately 4 years. Each time the reward is reduced by half. The goal of halving is ultimately reaching the planned number of 21 million Bitcoins.
From the beginning of Bitcoin’s existence, miners on processors and graphics cards could expect as much as 50 BTC for finding a block. On November 28, 2012, the award was halved to 25 BTC. On July 9, 2016, there was another reduction, this time to 12.5.
On May 11, 2020, there was another cut, this time from 12.5 BTC in each block to 6.25. Bitcoin mining speed depends on several factors, including the number and processing power of mining devices and luck. This makes it difficult to pinpoint a very precise date for the next reduction in the reward for miners. Another indicative halving date is 2024.
What is the impact of Bitcoin halving?
According to the Messari research center, all Bitcoin price movement scenarios can happen during halving. The Bitcoin community draws its conclusion on the basis of the most basic economic rules that limiting the supply will increase the price (as many people are willing for a less available good). To confirm this, they refer to the Stock-to-flow theory, which worked with the previous halvings. However, it seems more likely that prices will be kept at a level corresponding to the market consensus. This is because everyone knows about halving and all subsequent halvings in the following years. Thanks to this, they can react today, and the market discounts all these decisions in real time.
There are voices that suggest a look at its sister currency, Litecoin, and its halving. LTC price movements were more abrupt before the halving as sizable market forces were keen to profit from speculation. The miners also contributed to the chaos, for whom the reduction of the reward often meant the end of the big profits, even by mining at low-cost electricity in China.
There is a good chance that the market will behave similarly to the past. Bitcoin’s price will not rise too much as the market underestimates the impact of halving on supply. Then the turmoil, the influence of speculators and their pre-halving actions will be revealed by market mechanisms. The two previous halving ended with big gains as the market underestimated the power of speculation and the disappearance of BTC held by “hodlers”.
Is Bitcoin Digital Revolution Worth Participating?
People who are unfamiliar with the technology may feel lost for a moment because Bitcoin does not provide, despite many attempts, the physical characteristics and properties. Wallets and private keys only serve to access funds that are kept in existence with the block mining and transaction confirmation infrastructure. Then the answer to the Bitcoin question: what you are actually investing in if there is no physical representation of your assets?
Bitcoin is therefore about participation in the digital revolution, where BTC units are, in a way, shares in a medium that allows for rapid, cheap, cross-border value transfer. These shares change value depending on demand, supply, network condition and many other factors. However, the volatility of BTC values is not our main focus. The awareness of the transformation that the world will face thanks to blockchain technology allows us to believe that in the long term, having Bitcoin and other cryptocurrencies will be a good decision.