How To Make Money With Bitcoin

Getting rich with bitcoin certainly not going to be as easy as your local evening news makes it sound. If you didn't accidentally mine bitcoin in 2011 and suddenly discover the lost hard drive in your basement, then you're going to have to work hard to make money with bitcoin.

One of the guiding principles of what makes bitcoin valuable as a money is the concept of proof of work. In other words, to earn something valuable, you have to spend energy to get it. Bitcoin mining is based on the proof of work concept, and if you apply this core concept to your own money-making ventures in the bitcoin space, you'll be in a much better way than the guy who's still looking for his hard drives in the garbage dump.

5 Legit Ways To Make Money With Bitcoin

1. Buy & Hold It

The tried and true, fail-proof way to make money in with bitcoin is simply to buy and hold. It may be surprising, but the people who are performing best are the ones who are doing nothing. They simply have a stash of bitcoin that they never sell.

But how can you make money if you never sell? I like to rephrase the question as what's the best way to increase my purchasing power over time? Holding bitcoin helps you increase purchasing power over time.

For myself, instead of thinking of “how to make money” in bitcoin, think of it as “how to become wealthy saving in bitcoin”. By far, the most powerful strategy to become wealthy with bitcoin is to add a little bit to your stack every month, and hold onto it for many years.

Can you really make money in bitcoin if the price is going down? Yes, the key here is to lengthen your time horizon!

Sure, if you bought bitcoin a year ago, you'd be down bad. Like 80% down. But if you bought bitcoin 5 years ago, you'd be up 100% despite the being in a crushing bear market. If you bought 10 years ago, this devastating crash wouldn't even phase you right now because you'd be up more than 1000% since you bought. If you hold long enough, it doesn't matter if you sell bitcoin in a bull or bear market, and that's a comfortable place to be.

When #Bitcoin is down 69% you might be mistaken in thinking that *every* Bitcoiner in the world is dramatically underwater. But the truth is that every purchase has its own individualized performance, and those who have been buying for years have tons of high-performing buys. pic.twitter.com/AngzFaPbOH

— Stephen Chow (@chowcollection) October 17, 2022

2. Trade It (WARNING!)

When most people think of making money with bitcoin, they imagine trading it like a stock. You know — buy low, sell high, right? Seems pretty simple!

The truth is that most traders eventually end up losing money trying to time their bitcoin trades. The eventually part is important here. You can make a couple of great trades with some good luck on your side, but 99% of traders can't make consistent money. People forget that part of being a good trader is making recurring winning trades, not just hitting the lottery once and quitting.

Let's say you do a great trade and earn $10,000 over a weekend. What then? Do you quit? Unlikely. You want to dump that $10k back into the market and 10x it to $100,000. Can you quit your job and retire on $100k? No.

So do you keep working a day job and just invest the $100k into mutual funds like a good boy? Of course you're going to put it back into the market and so on and so on. So basically, unless you make an insane amount of money you're probably going to gamble it away until you lose. Even then, there are many stories circulating on social media from traders who had life-changing money in their hands and lost it all trying to double their money just one more time.

Personally, I don't trade. I tried it for a day, lost a few hundred dollars, and figured out real quick that I didn't have some natural trader instinct like I thought I might have. Yes, some people make money trading, but personally I don't recommend it, especially for beginners.

3. Participate In Promotions

There are tons of ways to earn free bitcoin from companies who are literally paying you to use their products. Sats-back rewards cards are pretty common, and some companies like exchanges will pay you to create an account and use their product. There are also many games that pay in bitcoin as well.

Unfortunately, many times these promotions are for a limited time, and only for users who actually spend money. For example, you may have to spend a few thousand dollars on a newly opened exchange account to earn $25 in free bitcoin in return, or you may be earning sats back on gift card purchases.

Is it free money? Sure, but technically you're still spending money to get it. You could spend $100 to earn $3 in bitcoin, or you could just not spend $100 and buy $103 worth of bitcoin and have more bitcoin at the end of the day.

4. Work For It

More and more companies are starting to offer the ability to get paid in bitcoin, so if you want to make money with bitcoin, you can simply earn it. Most companies paying in bitcoin are bitcoin-related companies, but there are some outliers out there. It's important to remember that bitcoin companies still have the need for traditional employees, so you don't have to be a shadowy super coder to work for a bitcoin company. Check out Bitcoiner Jobs for bitcoin job listings and see if there's something that fits your skill set. You could be doing something you're good at and enjoy, plus get paid in bitcoin!

If not, you can set up a few different apps to automatically convert your paychecks into bitcoin. Strike and CashApp both do this, so although technically you're getting paid in fiat dollars, you get the same effect of getting paid in bitcoin as it lands in your account every pay period. It's a great way to stick with your monthly DCA.

5. Build on It

If you can't find a job that suits you and pays in bitcoin, why not just start your own company? You don't need permission from anyone to start building your own bitcoin company.

You don't have to literally build on top of bitcoin using code, but that certainly is an option. You'd be surprised at how fast you can pick up coding if you dedicate yourself to it. I've seen several stories on Twitter about people who couldn't code at all, studied hard for 1-2 years, and now run their own bitcoin software company. Everyone starts somewhere, and with enough drive, you could make this a reality.

If coding isn't your thing, my recommendation to you as a potential bitcoin entrepreneur is to think of what you're already good at, and how you can combine it with bitcoin. For example, my work for the past decade has been blogging and search engine optimization, so I started a blog about bitcoin and will eventually make money from affiliate links and advertising.

6. Mine It

Mining bitcoin literally creates new bitcoin, so if you want to make money with bitcoin, mining it is a guaranteed way to get that done. The main downside here is that it is going to require a bit of investment into hardware, and you'll have to do some research to figure out if you can actually make this a profitable venture.

Back to the this proof-of-work thing one more time, to mine bitcoin, you need to expend energy through the process of hashing, using a specialized machine called an ASIC. In other words you buy the ASIC, then to spend money on electricity to run the ASIC. This can be done at home, but you'll need to know your electricity cost and compare how much you spend per day in electricity versus how much bitcoin you're earning. Electricity in California is a different cost than electricity in Texas.

The ASIC itself will cost you anywhere from a few hundred to a few thousand dollars, and new generation ASICs require specialized electricity hookups (220v). If you purchase this equipment, you'll have to factor in those costs to see how long it'll take you to make your money back.

If you're mining for fun, as a hobby, or to acquire private bitcoin outside of a centralized exchange, then these calculations are not as important, but if you're mining bitcoin specifically to make money, then they are an important part of the determining profitability. Just because you can mine bitcoin, doesn't mean you'll actually turn a profit.