How to make money from bitcoin in 2019
You need to read this post to learn about the several legitimate ways to make money with bitcoin in Nigeria. Aside from investing, we have identified 12 other ways to earn bitcoin, which you could also apply to other cryptoassets like Ether and XRP.
This practical guide will help anyone that wants to make money from bitcoin in Nigeria. More accurately, help you legitimately earn bitcoin with a reasonable amount of effort.
1. Investing in bitcoin
The world is increasingly reliant on the internet, and bitcoin, a secure digital currency, has piqued the interest of many investors. Some believe that bitcoin would eventually replace paper money as everyone in the world gets on the internet and desire a faster, transparent means to transfer value, while others believe bitcoin will be the digital gold existing side-by-side with paper money.
Read our guide on investing in bitcoin in Nigeria to learn more.
Regardless of the future of bitcoin, this digital currency has provided an exciting opportunity for everyone to have an entirely new asset class in their investment portfolio. Bitcoin is a high-profit investment vehicle albeit with high risk. Returns on bitcoin have performed better than the all-share index of most stock exchanges on the African continent.
What does ₦10,000 invested on April 5th, 2016 look like on April 15 2018?
If you had invested that same ₦10, 000 in bitcoin within the same period rather than the all-share index of most African stock exchanges, you would have gained around 1,628 per cent on your investment.
You can start investing today on Guava Exchange.
2. Trading bitcoin
Another way to make money from bitcoin is by trying to benefit from the daily upward and downward movement of price. There are several methods traders use to make money in the market, but the two listed below are common and practicable:
It involves you buying a portion of bitcoin from an exchange and selling it in some hours/weeks/months when the prices go up. Although it sounds effortless, there are some important details to note about this approach.
First, there are about a thousand cryptocurrency exchanges around these days, and some of them are just pure scams. The critical thing you want to do is find the safest and most secure cryptocurrency exchange you want to use. Guava Exchange is one of the most secure platforms to trade in Nigeria. International exchanges like Binance and Bittrex provide the opportunity to trade your bitcoin with several other profitable cryptoassets.
The second thing to know is that bitcoin is quite volatile, and it’s difficult to predict what the price will be in the future. In other words, its price could experience sharp fluctuations in a short period. For example, the price of bitcoin fell by about 35 per cent in November 2018 alone. So, to be able to make some nice profit you have to learn how to anticipate the market correctly through the use of historical data and learning from experienced traders.
A market maker is at both ends of a bitcoin trade. Market makers earn their profits by providing liquidity for the market. They do that by creating limit orders in both directions, their profit is the spread on the bid and ask (Bid is a buy order while Ask is a sell order).
On Guava trade, for example, the price of bitcoin could be at N1, 300, 000. You create a buy order for N1, 299, 900 and a sell order for N1,300, 100. When both orders get filled, you earn N200 as profit. That seems small, but considering that you can keep doing this same thing over and over again and quickly get to 100 trades a day, it makes sense for many traders. (Note: professional traders make use of a trading bot to execute these transactions).
3. Bitcoin arbitrage between exchanges
The price of bitcoin at any moment depends upon which exchange you are using at that particular time. Bitcoin arbitrage is the act of taking advantage of the price difference between two or more exchanges. An arbitrage opportunity exists when there is the opportunity to buy something for a low price and sell it for a higher price on a different exchange.
How does this work? You register on different exchanges like Guava Exchange, Luno, Remitano and other cryptocurrency exchanges that are easy to use. You set up ready to buy on one exchange and transfer the bitcoin to another exchange to sell at a profit, taking advantage of the disparity in prices.
Of course, it’s not that easy to buy bitcoin on one exchange and then transfer and sell it on another exchange. You have to put into consideration fees and time delays between transferring the bitcoin from one wallet to another. Only if it would be profitable then should you embark on arbitrage.
4. Making money from remittance
Nigerians living in the diaspora are often looking for a way to send money to their families or business partners in Nigeria while saving money on transfer fees. That is an opportunity for you.
You can help people transfer money by receiving what they intend to send in a specific bitcoin price, converting it to Naira, and handing the money over to the recipient here in the country. Of course, you have to ensure you have adjusted the agreed bitcoin rate to cover for any possible loss that could arise as a result of a decline in the price of bitcoin.
5. Bitcoin Mining
Bitcoin mining is the process through which new bitcoins are released into the market. Miners compete to record transactions on the blockchain for a block reward (the reward is currently 12.5 bitcoins) and transaction fees.
However, mining requires computing power to compete favourably with other miners across the world. To be profitable with bitcoin mining now, you need to invest heavily in electricity, mining equipment and cooling as it’s impossible to earn anything using your personal computer.
Assuming you’re planning to invest in mining bitcoin now, you’re up against some heavy competition. Even if you could afford the best possible mining equipment, you’re still at a huge disadvantage compared to professional bitcoin mining farms (mining farms are groups of people who come together to combine their mining power to compete favourably on the network).
A less sophisticated approach to make money from bitcoin mining is through buying cloud mining contracts. With cloud mining, instead of owning a bitcoin mining hardware, you rent the mining hardware of cloud mining operators for a small fee. Please be careful with this opportunity though, because almost 99% of cloud mining companies are scams, and it’s quite easy to fall prey without due diligence. Some companies would claim to be a cloud mining company without any proof of actually owning any mining hardware.
Even for cloud mining companies that are not scams, it still does not mean that you will make a profit when you put your money with them. When the price of bitcoin drops significantly, and it costs more to maintain the mining equipment than the revenue the company generates, there would be no profit to share.
6. Freelancing - Writing for blogs
If you have a knack for words and you are interested in the blockchain industry, you should consider becoming a blockchain journalist or writer. The industry is evolving every day, and there’s a growing demand for the latest news and accurate information on blockchain and cryptoassets.
Also, as a freelancer or contractor in Nigeria working for international businesses, you could request for payment in bitcoin. Not every business would agree to that, but some technology companies might be willing to use that channel. With bitcoin, you receive payments instantly and at no extra charge to you.
7. Lend your bitcoins to traders for interest
Lending out your bitcoin via margin loans is relatively easy. The market consists of traders who want to borrow to increase their trading capital and potential returns. Cryptocurrency exchanges like BitMEX, Poloniex and Bitfinex allow leveraged trading financed by lenders.
The process for lending on each of these exchanges is simple. Deposit your bitcoin, then move funds to "lending", and finally lend them out at your terms, and earn daily interest. If you don’t have bitcoins already, you can buy on Guava Exchange and transfer them to the exchange you have chosen to use.
8. BitcoinTalk Signature Campaigns
BitcoinTalk is one of the largest internet forums for cryptocurrency users and enthusiasts. The forum offers it’s registered users the ability to advertise a product for each post. The advert is included at the lower part of a post.
With a signature campaign though, the amount you earn depends on your membership level on BitcoinTalk. Typically, anyone with status less than ‘full member’ won’t get paid that much (to attain full membership, you need to have published at least 120 original posts).
Also, there are often different posting requirements for each campaign. So, the amount of money that can be made from these campaigns depends on the number of quality posts that you publish on the forum.
9. Bounty programs
A bounty program is a public offer made by cryptocurrency exchanges or blockchain startups to incentivise people to perform some specific tasks like testing or promoting their product.
Users who enrol for the bounty program receive compensation for testing the product, either in the native token of the platform, bitcoin, or even fiat. One of the places to see the latest bounties is on the BitcoinTalk forum.
10. Pay To Click (PTC) Websites
PTC websites pay negligible amounts in bitcoin for clicks and views. These websites allow users to choose to view ads for a certain number of seconds or minutes with different fees awarded for each.
Some of the websites that provide these services are BTC4ADS, Coinadder and BTC.surf. You can check Bitcoin Barrel for other sites.
11. Bitcoin faucets
A Bitcoin faucet is a platform that gives away tiny amounts of bitcoin to its users for completing some mundane tasks.
However, similar to PTC websites, Bitcoin faucets are not a realistic way to earn good money. The three common bitcoin faucets include MoonBitcoin, FreeBitcoin, and BTCClicks.
12. Promote bitcoin affiliate programs
Many exchanges and blockchain companies have affiliate programs. Affiliates are people who promote a particular product in exchange for a commission for bringing in paying customers.
Once you sign up on the platform and enrol for the company’s referral program, you get your unique affiliate link to promote that product or service.
How do you then promote? You can share it on your social media accounts, run ad campaigns or even set up a blog to promote your links within the content.
13. Doing micro jobs
Micro jobs could include testing out a plugin, retweeting a post or following a facebook account. When cryptocurrency companies launch an exchange, wallet service or other products, to gain some traction, they ask people to perform small tasks for small amounts of bitcoin.
Coinworker is one of the prominent platforms that has a pool of micro jobs from different companies. All you need to do is register and begin completing the task assigned to you. The amount of bitcoin you can earn is tiny, but it’s a little bit above Pay to click websites and faucets.
Trying to earn bitcoin legitimately takes some considerable amount of effort. You'll need to do some research in the case of investing, trading and mining; you'll have to give up your time to earn from bitcoin faucets, pay per click websites and bounty programs; while you have to hone your writing skills to make some money from freelancing and content creation for BitcoinTalk signature campaigns.