Trading circles around the world are abuzz with cryptocurrency trading, in particular Bitcoin, which has emerged as the most traded and invested asset other than traditional stocks and bonds. Indeed the investment market landscape is changing with cryptocurrency trading leading the forefront globally. Few would have thought five to six years ago that Bitcoin will explode in the coming years, at one point crossing the $18k mark in 2017. It’s 2018, and the Bitcoin craze is far from losing steam, and many investors are shifting sectors and starting to look into Bitcoin trading as well as using it as an investment.
Many people believe that cryptocurrencies are the future, and Bitcoin is undoubtedly still a leader. With that, a substantial number of traders are starting to invest in Bitcoin worldwide to reap huge gains later. Since its onset, Bitcoin trading has been mostly facilitated by exchanges where traders can exchange Bitcoin for either fiat currencies or other altcoins.
However, many people still ask the persistent question, “How can I Earn Bitcoin”, especially if we choose not to use a cryptocurrency exchange. Indeed there are many popular and profitable alternatives for traders to earn Bitcoin, which we will discuss below. Some of them involve considerable expertise while others involve minimal effort and entry level knowledge. The most well-known alternatives include,
- Free Bitcoin mining
- Bitcoin trading bots
- Affiliate Programs
- Free Bitcoin Faucets
- Proof of Stake Coins
- Mining: Perhaps the most well-known, oldest and guaranteed way to earn Bitcoin is through mining. Mining is the process of creating new Bitcoin, sort of acting like a mint does for fiat currencies. The process involves users solving computationally difficult puzzles which allow them to discover “blocks”. These blocks are then added to the blockchain, and the users receive Bitcoin as a participating reward.
Bitcoin mining has been around since the inception of Bitcoin in 2009, originally only requiring normal desktops GPU to mine. However, with time as the Bitcoin network grew and more BTC tokens are generated, the difficulty level in the mining process has increased considerably. As a result GPU mining has been entirely replaced by ASIC mining, using advanced processing units to combat the difficulty level.
Thus, mining can be broadly classified into two types,
- GPU mining
- ASIC mining
GPU mining: As mentioned before, GPU mining was introduced way back in 2009, and relied on a desktop’s GPU for computational processing power. But with an increase of difficulty level which is fuelled by the Network’s growth, it has become virtually impossible to perform GPU mining profitably. Apart from the fact that ASIC hardware are increasingly being used for mining, mining Bitcoin through GPU processing consumes a lot more electricity as compared to other options, which make it difficult for the miner to turn a profit. Hence miners are switching to custom ASIC chips made specifically for Bitcoin mining. One estimate suggests that ASIC chips have almost 100 times the capacity as compared to GPUs.
ASIC mining: As Bitcoin mining is now a hardware intensive activity which makes it very expensive, ASIC or Application Specific Integrated Circuits have largely replaced GPU mining. In short, ASIC chips are specifically designed for crypto-mining, with advanced motherboards and power supplies, all combined into a single cohesive unit. They offer a substantially greater hashrate while being energy efficient at the same time. AntMiner and Avalon are examples of efficient ASIC miners currently on the market.
Mining Pool: Many people have also started joining other miners to create mining pools. This allows users to generate more Bitcoin without the need for setting up their own mining farms. There are countless such mining pool communities in operation at the moment.
A mining pool is basically the practice of resource pooling by miners who share their processing power over a certain network in order to split the reward equally according to the amount of contribution in finding a block. The concept of mining pool first came due to the increasing difficulty of solving puzzles during individual cryptocurrency mining. Among the numerous mining pools that currently exist, Slush mining pool is the oldest one and AntPool is the largest one.
In a mining pool, several methods are followed under different circumstances for mining including:
- Pay-per-share (PPS): In this method, the miner receives a guaranteed and instant pay-out according to his/her contribution to the probability of finding a block. This paradigm allows the least possible variance in payment.
- Proportional: In this method, the miners have to wait until a block is found. After finding the block, the amount is distributed among the miners in equal shares by the end of a certain mining round.
- Bitcoin Pooled Mining (BPM): This method is also known as the “slush’s system” as it was first used on the Slush’s Pool. In this process, older shares are given less weight than the recent shares. Unlike the previous two methods, this process can effectively prevent cheating by switching pools during a round. It also helps in maximising profit of the miners.
- Pay-per-last-N-shares (PPLNS): This method is nearly similar to the proportional method. The miner receives a reward on the basis of N last shares.
- Geometric and Double Geometric: Geometric method is also known as the Slush’s method where the score is granted to every new share apropos of the existing and future shares. The Double Geometric method is basically a combination of PPLNS and Geometric method.
- Bitcoin Trading bots: Given that the cryptocurrency market remains in operation throughout the day and does not behave like traditional stock markets (with opening and closing times), traders and even casual investors have to be ever vigilante to not miss out on any profitable trading opportunities and minimize losses. This has given rise to the introduction of ZBitcoin trading bots, used both by experienced investors and even some casual traders.
A Bitcoin trading bot refers to a program that allows a trader to be in control of their trades even when they are away or sleeping. It is a program that allows trades to be executed faster and more efficiently in the absence of a trader. The properly configured bot can place buy and sell orders depending on the interpretation of market data as well as some of the traders pre-defined and pre-programmed rules. Market actions such as orders, price, time and volume are all taken under account automatically by the trading bot. there are two types of Bitcoin trading bots, namely Arbitrage and market Making. Some well-known reputed brands like 3Commas, CryptoTrader, Gunbot and Cryptohogger have all released their own Bitcoin trading bot for a growing userbase. Other reputed Bitcoin trading bots include Gekko, Haasbot, Zenbot, BTC Robot, and many more. Below, you would find out a few details about some of these trading bots.
- CryptoTrader: This is one of the most well-known cloud based platforms that allows traders to build their own individual Bitcoin trading bots that can be hosted on the platform. The software program of this trading bot is very ingeniously developed which makes it capable of supporting several currencies and exchanges. CryptoTrader also allows different trading strategies and thorough back-testing. Moreover, this trading bot offers a marketplace where the users can sell their own strategies as well as buy new ones from others. The subscription price for this trading bot ranges from 0.0013 BTC to 0.0016 BTC per month.
- Gunbot: The Gunbot is one of the most efficient trading bots that is suitable for both neophytes and experienced traders due to its vast range of specifications and settings. Gunbot supports several exchanges such as Bittrex, Binance, Cex.io, Cryptopia, Bitfinex, Kraken, GDax, and Poloniex. The subscription price of this trading bot is slightly higher than that of the CryptoTrader. It ranges from 0.026 to 0.16 BTC per month. The price varies according to the chosen features and specifications.
- Gekko: Gekko is one of the most popular Bitcoin trading bots that can be downloaded from the GitHub platform for free. It comes with an open source software program on which the developers are still working for further improvement. It is a fully automated trading bot that can support several exchanges like Bitfinex, Bitstamp, Poloniex, etc. Gekko offers a web interface capable of monitoring your trtading strategies and data. Gekko runs on almost every major operating system including Windows, Linux, and MacOS.
- Haasbot: This trading bot was developed in January, 2014 by HaasOnline. Haasbot supports a vast range of exchanges including Poloniex, Bitfinex, GDAX, Kraken, Huobi, Gemini, and many more. One of the standout features of this trading bot is that it can trade Bitcoin automatically along with various other Altcoins. Haasbot usually requires some input for the execution of trades and can analyse market information on behalf of the traders. This trading bot comes with a set of ingenious tools that can deduce trend patterns accurately for the users. The subscription price for this trading bot is nearly 0.32 BTC per month.
- Zenbot: Zenbot was designed on the basis of artificial intelligence technology. It is also an open source trading bot that is supported on nearly every operating system. This trading bot is very adroit in exploiting arbitrage opportunities and executing high frequency trades. Zenbot is also capable of conducting multiple cryptocurrency trades simultaneously. Exchanges like Gemini, Kraken, Poloniex, GDAX, Quadriga, and Bittrex support this efficient trading bot.
- Free Bitcoin Faucets: Bitcoin faucets are a radically different way of earning Bitcoins through a reward system. It usually involves a website or an app, where rewards are dispensed in the form of a Satoshi( one millionth of a BTC token). Users have to complete a task or a captcha, depending on the website, in order to claim their rewards.
Using Bitcoin faucets to earn Bitcoin is still a relatively new concept, even though it has been introduced way back in 2010. Such websites usually generate a lot of traffic, which acts asan incentive for the hosting party. There are several reputed faucet sites that offer Bitcoin and is considered a great way to introduce new users to Bitcoin. Some well-known faucet sites include:
- Cointiply: A person can earn 70 Satoshis to 10,000 Satoshis within a period of 60 minutes from this faucet. The official pay-out website for this faucet is Faucet Hub. Cointiply allows withdrawals once 35,000 Satoshis are stored.
- Moon Bitcoin: The reward range varies from 3 to 180 Satoshis in this faucet within a time interval of 5 minutes. This faucet allows instant withdrawal while providing its pay-outs on CoinPot.
- BonusBitcoin: It is another Bitcoin faucet that gives pay-outs on CoinPot and allows instant withdrawal. Its reward range varies from 24 to120 Satoshis within a period of 15 minutes.
- in: FreeBitco provides a 60 minute window for earning Satoshis. The reward varies from 9 to 2,700 Satoshis. Unlike the previous faucets FreeBitco.in offers a direct pay-out system with 30,000 Satoshis being the minimum amount for withdrawal.
- Qoinpro: Qoinpro offers direct pay-out on a daily basis where the reward range varies under specific circumstances.
- Instant-BTC: This Bitcoin faucet comes with a variable reward range with a time period of five minutes.
- io: The reward range varies from 10 to 35 Satoshis on this faucet within a time period of 1 hour. The minimum withdrawal amount for this faucet is 30,000 Satoshis.
- Earning Bitcoin Through Affiliate Programs: Another more recent innovation for earning Bitcoin is through an affiliate program. Besides mining, trading and earning Bitcoin through conventional means, many companies now offer affiliate-networking programs. By joining such affiliates, users get the privilege of creating another passive income stream from Bitcoin.
Similar to faucets, such companies usually have sites which pay for the digital marketing for a user referral. Users in turn, make money by directing more customers/visitors to the site. It is considered beneficial for all parties involved, with the user making a substantial income and the company growing their brand name over time.
There are many such affiliate programs sponsored by many companies including some cryptocurrency exchanges, some of them are listed below.
- Trezor affiliate program
- Changelly affiliate program
- io affiliate program
- Coinbase affiliate program
- LocalBitcoins affiliate program
- Ledger affiliate program
- Using Masternodes To Generate Income: Traditionally at the onset of cryptocurrency trading, the only way to make a profit was by holding the asset and waiting for an appreciation in value. That all changed when the concept of masternode hosting was introduced. Through using masternodes, users can generate regular and stable cryptocurrency returns without getting themselves involved in any mining processes.
Masternodes refer to servers on a decentralized network, used to complete actions which are not possible with other nodes within the network. Such actions can include allowing direct and even private transactions. For a masternode operator, profitability can be secured in the long run, provided the host selects tokens which offer the most potential monthly ROI at any given point. Many authoritarian sites such as Masternodes.pro offer complete and updated information regarding coins with the highest ROI. Other authoritarian Masternode websites include MnRank, Masternodes.online, and a few others. A List of some of the most profitable masternode coins are given below. (Information:coinmarketcap.com)
- Using Proof Of Stake Coins To Generate Income: Another less known but effective crypto-income generation technique involves using proof-of-Stake coins. Proof-of-Stake is a relatively new alternative to the already existent Proof-of-Work protocol, and is substantially more energy efficient. Unlike P-O-W which uses mining to discover blocks and complete the transaction validations, P-O-S protocols involve a lottery like system, where staked coins are chosen at random.
To get the most out of this technique, the user has to conduct substantial market research before making any decision. There are several PoS coins that act as stable sources for passive income. The top PoS coins include:
- NavCoin (NAV): NavCoin is a peer-to-peer open source project that was forked from Bitcoin in 2014. Since its very inception, this coin has been a strong source of passive income that is based on the proof of stake paradigm. For staking this cryptocurrency, you would need a copy of the Core Wallet set to staking mode and to deposit your NavCoins into the wallet. After the deposit is made, you would start earning automatically. You would need to keep your computer on for maximum profit. At the time of writing, NavCoin is holding the 246th position with a price equivalent to $0.403 approximately.
- Ark (ARK): Similar to Lisk, Ark is based on the delegated proof of stake paradigm that relies on users as voters and delegates as a transaction processor. Ark is designed to link separate blockchains through its innovative SmartBridge Technology. You can continue your passive income with the help of this cryptocurrency even if the wallet is not connected or online. Currently Ark holds the 77th position on Coinmarketcap with a price equivalent to $1.17.
- Neo (NEO): Neo, also known as “China’s Ethereum”, is a smart contracts development platform aiming to be the centre of a smart economy where assets can be traded with little overhead but securely. Neo can be staked in nearly every storage wallet which makes it a highly convenient PoS coin for passive earning. NEO currently holds the 13th position on Coinmarketcap with a coin price tantamount to $31.83.
- Neblio (NEBL): Neblio is a very secure and open source blockchain platform designed specifically for distributed application platform. Neblio’s staking is mainly dependent on the age of the coin. The coins have to be idle for at least a day before contributing to staking. Neblio staking can offer ROI (Return on Investment) up to 10%. At the time of writing, Neblio holds the 152nd position on Coinmarketcap with a price equivalent to $3.57.
- Okcash (OK): Okcash is an open source network that was developed back in 2014 as a low overhead alternative cryptocurrency for individuals and businesses. Okcash helps in keeping the fees as low as possible to provide complete control over transactions to the users. Despite starting as a proof of work cryptocurrency, Okcash switched to proof of stake and now it is one of the most popular coins for passive income. This currency always requires an official wallet for staking. At the moment, Okcash is ranked 586th on Coinmarketcap with a price of $0.06 approximately.
The world of cryptocurrencies is still in a fledgling stage as the world is increasingly embracing blockchain technology and its benefits. Bitcoin is still holding its ground as the top cryptocurrency on the market, with traders making fortunes due to Bitcoin’s volatility. However, when the majority of crypto enthusiasts are flocking towards brokerage firms and exchanges to get their Bitcoin, alternative sources of earning like the ones above are largely ignored by the general populous.