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Today we have a guest blogger, Danial Pervaiz, who will give you the low down on how to invest in bitcoins for beginners with no experience since there are tons of new people wanting to know more about cryptocurrencies.
I hope you will enjoy this post and that you will find it helpful to you. If you have any bitcoin stories you’d like to share, we would love to hear it in the comments below!
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What is a bitcoin?
How can we invest in bitcoin in this competitive world?
There are some easy ways to do that if you can learn these skills, which I’m going to show you in this article.
But first, we should know that what is a bitcoin and the history behind it.
Also, always remember, only invest an amount you are willing to lose as bitcoin and other cryptocurrency coins are highly volatile and is considered an extremely risky investment.
WHAT IS A BITCOIN?
Bitcoin is a virtual currency. The founder of bitcoin cryptocurrency is Satoshi Nakamoto.
The difference between paper money and the bitcoin is very simple. Paper money is controlled by the government and bitcoin has no central government.
The government has no control over this currency yet. Investing in bitcoin could be a very hard thing for you if you don’t understand it.
If you are a beginner and really want to go more in depth into bitcoin, then you can read this amazing book Mastering Bitcoins For Beginners, which you can check out here:
The Hype of Bitcoin
I remember back in 2010, the price of bitcoins was around $0.30 and my friend bought 10 bitcoins.
From 2010, the prices have soared from $0.30 to a groundbreaking $12,000 in 2018. It went up to $20,000 in 2017. The prices are fluctuating every month in the bitcoin world.
So here is the question, should you invest in bitcoin? Or is there any easy way to invest in bitcoin without any risk?
The answer is yes! Keep Reading this article to find out how.
Investing In Bitcoin As A Beginner
When it comes to bitcoin investments, there is a possibility of a crash in the market.
I saw a lot of people investing in bitcoin by watching other people winning in this game.
But when the market crashed in January 2018, a lot of people lost their life savings. The Bitcoin dropped from $19,000 to $9,000 (at the time of this writing).
Some experts say, that it will go back to the old price ($18,000 – $19,000). But we don’t know yet.
There are two ways to invest in bitcoin:
- Buy them directly from an exchange;
- Bitcoin Mining
I will go through each one quickly below.
How to Buy Bitcoins?
Bitcoins can be stored on your local computer or either in your online bitcoin wallet.
If your computer got crashed or your bitcoin wallet gets hacked, then all your money is gone.
Despite the negatives, buying bitcoins today is very simple.
There are some online companies in the U.S and abroad for buying and selling the bitcoins. If you are in the U.S then CoinBase is the best option to go with.
You can use CoinBase to purchase bitcoin with your bank account (takes a few days to confirm but locked in at the right you confirm your buy) or a credit card (higher fees but faster).
If you don’t want to deal with this one, then BitStamp could be a better option for you. It’s a very popular exchange in Europe and you can buy and sell bitcoin directly in this exchange as well.
Here’s a quick comparison chart between the two found on Ether Plan (etherplan.com):
I saw a lot of people talking about bitcoin scam nowadays. If you understand the cryptocurrency properly, then you can lower the chances of scams like Bitcoin Advertising and Bitcoin Millionaire Club.
There is another way of making money with bitcoin. Maybe you don’t like the idea of CoinBase or BitStamp. You can still earn bitcoins by becoming a bitcoin miner.
WHAT IS BITCOIN MINING?
Bitcoin mining involves commanding your computer to solve complex mathematical problems.
Each problem takes 4 – 5 days to solve and miner gets $0.50 – $1.60 without electricity cost. Bitcoin mining eats a lot of electricity.
With time, these problems get more complicated and take 1 – 2 years.
Now, how can we make money if it takes years?
Miners use different hardware to solve these problems very fast. There are some hardware and software on the market to mine bitcoins.
We will talk about hardware and software stuff in a minute. But first, let’s talk about the history of bitcoin mining.
History of Bitcoin Mining
In the early days, Miners used their computers to solve different mathematical problems but the ordinary graphics card of your computer can’t really solve your problems.
Miners started using the external graphics card for mining. But these graphics card eats a lot of electricity and can’t really give you any profit.
Then there were chips, that were introduced to mine bitcoins. These chips were faster than graphics card but still power hungry.
ASIC Chips for Mining Bitcoins
ASIC chips were introduced in 2017 and were faster than the graphics card.
These ASIC chips consume less electricity and give you more profits.
The bitcoin mining is increasing every single day and it’s getting difficult to solve these mathematical problems.
To fix this problem, miners found a way to work in pools to make profits.
Now, what is a pool?
Bitcoin Mining in Pools
The goal here is to solve math problems in less time. In pools, bitcoin miners work together to solve math problems to make profits.
So how to start with mining pools?
You can use mining software like Nice-Hash. Nice hash is a software that puts together tons of miners to solve these complex mathematical problems.
Then they distribute the profit. You need a good graphics card or ASIC chip to mine bitcoin.
I can recommend you the following:
- ASUS GTX-1060
- GeForce GTX-1080
- GeForce GTX-1070
- GeForce GTX-1060
How Much Can You Make with Bitcoin Mining?
Well, it depends on the number of hours you put in each day.
Miners make from $200 – $3000 a day.
You can earn a different type of coins like altcoins, Ethereum, and bitcoins. The current price of a bitcoin is $9000.
On the other hand, Ethereum is $900/coin and Altcoins are $1100/coin. It can go up in the future or it can crash even more.
What about your investments?
Here are the benefits of bitcoin mining, you only invest in graphics card or chip to mine bitcoins. There are no other costs. You will have to pay the electricity bill.
But if you are working in pools, then you can make money each month. If you are using Nice Hash, then you can read the documentation on their website to learn more about it.
The easiest of the two ways discussed above to invest in bitcoin is just buying it on an exchange like CoinBase if you don’t want to get into bitcoin mining which can be significantly more technically involved.
For the average person, buying bitcoin on an exchange would be your first step as you can buy other cryptocurrencies with it.
Many other exchanges that allow you to buy other cryptocurrencies will need you to buy them with bitcoin or ethereum because these other exchanges don’t allow you to buy these alternative coins with fiat currency.
At CoinBase, you can directly buy and sell bitcoin, ethereum, litecoin and bitcoin cash only so you will have to check CoinMarketCap.com to see where you can buy the coin you want to invest in.
You can learn more about making money with bitcoins on Beginner Tuts. Consistency is the key to success. Learn and take actions. You will be successful.
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