Understandably you might think of trading or investing as stocks and bonds. You might also think of commodities, currencies and other financial instruments. Bring up a conversation surrounding Bitcoin on a Friday night in you're local public house, you more than likely to get a few odd looks, unless your local watering hole is full of TechCrunch fans.
Introduced way back in 2009, Bitcoin was exchanged through it's own payment network. The Bitcoin is stored in a virtual wallet that is secured through a blockchain and has been described as a decentralised, peer-to-peer currency with no central bank and requires no trusted third parties to operate.
Wanting to dabble in bitcoin? I suggest buying £100 or so through [https://www.coinbase.com] but if your looking at becoming a millionaire, keep reading.
"Excuse me sir, do you accept bitcoin?"
The Bitcoin is essentially a speculative vehicle for early adopters. Simply put, do not eat out and expect to pay for the meal with Bitcoins or any other cryptocurrency for that matter, it's not quite there yet.
Certain vendors accept Bitcoin, allowing customers to purchase real products and services with the digital currency. Richard Branson has decided to accept it through Virgin Galactic. CeX accepts it when trading games in stores. Reddit allows you to use it when purchasing Reddit Gold. You might not be able to buy a coffee or your weekly grocery shop, but you can buy a trip to space!
So where to start? If you're looking to use Bitcoin to pay for stuff, you need a 'cryptocurrency wallet' like Cryptonator or Coinbase. Once you have registered, scanned over a few pieces of ID, you can securely buy and sell the currency.
With so much volatility, using Bitcoins in everyday life would be extremely risky anyway. With such volatility, any serious commerce conducted with Bitcoins is likely to result in one party losing out on a lot of value. So right now, the cryptocurrency is realistically just a tool for speculation. Coinbase is one of the major Bitcoin exchanges, which allows you to buy and sell Bitcoins as you please. You sign up, deposit real-world money and exchange the currency with relatively low fees.
Feeling Bullish
Let's take a look at the price history. According to coinmarketcap, as of today the market capitalization is over $76B with over 16 million Bitcoins in the system. Until 2013, Bitcoins were trading for either less than $10 each or not much over. As soon as 2013 started, Bitcoins seemed to ever-increase and in recent months the cryptocurrency has sky rocketed and it doesn't look like it's about to slow down. At the beginning of this year (2017), bitcoin was being traded around $963, fast forward 9 months and we can now see one bitcoin going for as much as $4500!
Right now, while the currency is fluctuating daily. You can make all the predictions you want, but no one knows what the future holds for Bitcoin. Is it just a fad or could Bitcoin genuinely develop into an everyday currency? If it really took off, would the government not just ban it completely? Only time will tell, but for now let's speculate.
How to become a bitcoin millionaire
So there are 2 options:
- Mining
- Trading
By mining for Bitcoins, as long as the markets remain active you can basically make money for nothing. But the problem is, mining is such a tough gig now that it is hardly worth it. Turning your computer into a miner will likely make it noisy and heat up. It would likely take you a long time to even mine one single Bitcoin, by which time you probably would have racked the up charges on your electricity bill. But for those who are fortunate enough to have access to some serious computing powers, and your lucky enough to get away without paying the electricity bill, making money couldn't of been easier. But before you do decide to take that route, here's a look at the set-up you need.
With that option out the window, lets take a look option two, through trading. Back in 2011, you could have bought Bitcoins for $10. Selling them at $4,500 today would have delivered a profit of $4,490 per Bitcoin. Basically you should have bought about 1,000 Bitcoins back when they were cheap. This would have cost you around $10,000 in 2011, making you a multi-millionaire today.
Making a million with Bitcoins today is probably still possible, but you will need some capital. Bitcoins can fluctuate daily. Day trading Bitcoins is going to be risky, but where there is risk, there is reward. Alternatively, you can go long and hold out to see whether Bitcoin will be successful.
On the other hand, if you have a strong conviction in the downfall of the Bitcoin, you need to short the cryptocurrency in any way you can. This would be an extremely risky endeavor still, but if the Bitcoin market is truly destined for failure, why not get rich when the bubble pops? To short Bitcoin, you will either need to get creative or join an exchange which allows you to do so.
Other Ways To Invest In Bitcoin
It's important to remember that Bitcoin is a currency. This means that “investing” in it is like investing in a currency. You're essentially hoping the value of Bitcoin currency goes up. The easiest way to invest in Bitcoin is to simply get a Bitcoin wallet and buy Bitcoins. Remember, you could also invest in Litecoin or invest in Ethereum as well.
To conclude
If you want to be a Bitcoin millionaire, get yourself a warehouse, a tonne of extremely powerful computers and get mining. Failing that, you need to either day trade Bitcoin or any other cryptocurrency that you may feel has potential for growth and take advantage of the short-term price volatility, or make a bet on the long-term success or demise of the Bitcoin.
A big shout out to @adsactly for his fantastic introductory post on the blockchain.
great post, I'm not getting into mining myself, too much electricity consumption.. and the noise
Get 0.00001000 CLAMS every minute, Is this for real? oh, and 0.00010000 every hour. Have claimed so many coins and still counting...
https://steemit.com/clamcoins/@yepbit/get-0-00001000-clams-every-minute-is-this-for-real-oh-and-0-00010000-every-hour