Shock Notes

Notes on Creativity, Technology, and Life

How to Get Bitcoins

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To get your own bitcoins, you can mine for them, accept them as payment, or buy them on bitcoin exchanges. Bitcoin is a virtual currency which is both created and held digitally. It is not printed like our conventional dollars and euros, nor is it controlled by the financial institutions. Bitcoin is primarily produced by individuals who mine them by using their computing abilities for verifying the transactions of other users. They receive bitcoins in exchange for verifying these transactions. This currency can also be bought with US dollars and other currencies. Sales via bitcoins can be made anonymously, and this is one of the main reasons why it is widely popular among tech enthusiasts and speculators.

Heads up: This article was commissioned as a part of the Adam Rush Project. It was an experiment I did a few years ago to see if having books written by ghostwriters would be commercially viable. It wasn't. That said, the following article was written by someone else and not yet edited to my standards. I hope to find time to rewrite it myself in the future, but for now, read with caution.

How to Buy Bitcoins

If you want to acquire bitcoin, you can easily do so by contacting any one of the companies offering cash-to-bitcoin exchange services. Of course, there will be some fees associated with exchanging your cash for bitcoins. A US-based company called Coinbase (www.coinbase.com) is one of those companies. The difference between it and LocalBitcoins (www.localbitcoins.com) is that Coinbase will always require you to furnish it with personal information which it then uses to open an account resembling one opened by mainstream banks. The company then links the new account with the customer’s bank account, credit card or debit cards, and proceeds to sell the new account holder the bitcoin in exchange for fiat currency.

You may also choose to accept bitcoin as payment for goods and services offered to your customers. All you have to do is to set up a bitcoin address, which can even be done anonymously.

Recently, several new bitcoin purchasing options have been made accessible in certain countries. In the US, for instance, there are platforms like Coinbase and Circle (www.circle.com) that let you purchase bitcoins with your credit cards. Similar services are offered by platforms like CoinCorner (www.coincorner.com) and Bittylicious (www.bittylicious.com) in the UK. Binance (www.binance.com) and HitBTC (www.hitbtc.com) are popular in China.

Bitcoin ATMs

Although this is a relatively new concept, the number of bitcoin ATMs is increasing. Bitaccess (www.bitaccess.ca), Genesis Coin (www.bitcoinatm.com), and Lamassu (www.lamassu.is) are some of the leading bitcoin ATMs.

This is similar to a face-to-face exchange. The only difference is the fact that this time, the encounter is with a machine. Here, you will have to insert your cash or scan the QR code with your mobile phone for loading the bitcoins to your wallet. You can also use a paper receipt that has the necessary codes for the transactions.

In the case of bitcoins, the exchange rates vary. They can be anywhere between 3% and 8% at a standard exchange rate. Buying bitcoins from such ATMs is often more expensive than other means. This is because the infrastructure needed to build such ATMs costs money. These machines need to carry out several processes to confirm the identity of the person before each transaction.

Bitcoin ATMs usually work with QR-codes more often than the PIN numbers and passwords you may be used to. QR-codes are more secure than standard passwords. On the whole, using a bitcoin ATM is safe because of its high levels of security. There is less chance of having your bitcoins stolen or misused. Another reason why bitcoin ATMs are prevalent is because of the speed of their transactions. A large number of bitcoins can be transferred safely within seconds.

Accepting Bitcoins in Business

For someone with a business, the easiest way to earn bitcoins is simply to accept them as payment from customers. It doesn’t matter if you run a multinational company or sell goods at the flea market. You can always make bitcoins by accepting them as payment in your shop. To accept bitcoins as payment, you only need to take a few simple steps:

  1. Create an account on any bitcoin wallet hosting platform.
  2. Get the QR-code along with the address of your bitcoin wallet and keep it next to the cash register.
  3. Put up a sign that says you accept bitcoins in your shop.

Bitcoin Faucets

Bitcoin faucet websites pay small amounts of bitcoin to those who perform some tasks. Tasks include things like visiting the website, playing games, or looking at a few ads. It’s not all that lucrative, but it’s a start.

Here are a few bitcoin faucets you can look into:

Earn Bitcoins from Interest Payments

You can earn bitcoins through interest payments by lending out the bitcoins you already possess. You may opt for peer-to-peer bitcoin lending websites, or you can contribute loans to borrowers who publish funding requests on these websites. Good sites always assess the credibility of their applicants.

Another option is bitcoin banking sites. Here, the bitcoins are deposited with a site that adds a fixed interest rate on these deposits, just as banks do. Diversification of bitcoins to borrowers as in the peer-to-peer lending system is not required here. Take note that in this banking model you entrust one single borrower (the website) with your money. If they fail to safeguard your bitcoins, you will lose everything.

Altogether, bitcoin lending is an excellent way to increase your bitcoin amounts. Take care that you choose a safe site as a lending platform. If the website does not offer details like status of incorporation and contact information, then avoid it.

Earn Bitcoins Through Trading

You can make bitcoins safely by trading through arbitrage. In this system, you see an opportunity to buy an asset in one place for a certain price and sell it immediately to some other place at a higher price. However, you involve some risk if you are not able to sell the asset immediately. You have to find a buyer and then also make a profit from the transaction. However, in the bitcoin world, such arbitrage is much more complicated to execute than it seems. The major disadvantage is that you have to search for the opportunities yourself. You also need to have at least some knowledge about the price differences between the exchanges. If you spot a chance for arbitrage and want to jump in on it, you need to have bitcoins on hand. If done cautiously, this system is more cost-effective than other bitcoin earning mechanisms.

You may also speculate on prices to earn bitcoins from trading. In this case, you would buy bitcoins and wait until the price increases before selling for fiat currency. You buy when bitcoin prices dip and sell when they go up. This method is risky for bitcoin because you don’t have much information on the factors that are driving the prices.

Earn Bitcoins as a Regular Income

Getting your regularly scheduled paycheck in bitcoins is presumably the steadiest approach to gain bitcoins. While there aren’t many employers who pay in bitcoins, as cryptocurrencies gain traction as a legitimate type of currency, you might begin to see this more.

Summary

  • Besides mining them yourself, there are several ways you can earn bitcoins.
  • The easiest way to get bitcoins is to buy them at a bitcoin exchange website like Coinbase.
  • Bitcoin faucets are also popular. They allow you to acquire small amounts of bitcoin in exchange for performing simple tasks like answering questions or viewing advertisements.