Before speaking about the best methods to use bitcoins, we must talk about their usefulness and about the conception that you must have towards it. First of all, creating, exchanging, buying and selling bitcoins is an operation like any other productive or speculative action. You should not believe in those “I made 200 dollars in one hour with Google Ad-Sense anyway”, so if you think that you will become a millionaire from bitcoins, think again.
The bitcoin market is free-floating, and as on any other markets where the price is established freely, there is a possibility to win or lose. Just like in Forex, you can speculate the differences between different exchange courses, it is possible to make money with bitcoins, if you are able to speculate their growth. As a conclusion, it is possible to make money with bitcoins, but you should see it as any other business, not as a get-rich overnight Ponzi scheme.
Will I make money by mining bitcoins?
Sure, there are some people that have performing hardware for mining bitcoins, but this does not mean that any person mining this currency with this method would get rich overnight. The majority of people mining bitcoins are doing it because they find the concept interesting. The bitcoin is still at its beginning, and even if it is really successful now, we can’t anticipate what would happen during the next ten or twenty years. Sure, you can make some money by mining coins, but you should first see the project as being interesting, not as a moneymaking machine of any kind.
What about investing in bitcoins?
As we are talking about an electronic currency, there are no guides, economical geniuses and specialists that can anticipate the evolution of bitcoins. In theory, its value should grow immensely, but this is what specialists said about the prices of real estates until those were halved at the end of 2008 by the financial recession. As long as people want this currency and they are willing to buy it, its value will grow. However, there are also some reasons for which the bitcoin might fail:
- Because it is new, it is not strictly regulated, so it might be the subject of speculation and manipulation, even by entities that have modest funding at their disposal
- Websites intermediating bitcoin exchange, mining, selling and buying appear all the time, which might be dangerous. Some of those websites can’t be verified, so those might not be so secure
- The bitcoin is not widely accepted as a payment method, as PayPal or credit cards payments. Even if it is introduced on many websites even when you read this article as a payment method, its liquidity is not so great, and it can’t even be calculated, as long as bitcoins are created even in this moment.
- As it is a new concept, we never know what it would influence it. Maybe the states of different countries would want to regulate it, or maybe the government of the United States decides to “influence” its evolution one way or the other.
It is possible to buy Bitcoins with other payment methods?
Yes, the increasing popularity of this virtual coin leaded to the apparition of many websites intermediating bitcoin transactions. However, it is risky to buy or sell bitcoins using traditional e-wallets like PayPal and Skrill.
Controversies and the future of bitcoin as a standalone currency
Since the apparition of the bitcoin in the online world, it was contested and controversial. It was considered as the coin of hackers, until its popularity reached the large public, and major companies became interested about it. Today, you can use bitcoins to buy services and products from various websites, but it is not as common as PayPal, let’s say. Therefore, if you have some money in your bitcoin wallet and you find a website that allows you to pay in bitcoins, you can do so, but you will have to check several aspects about the website:
- See if it is trusted. Bitcoins are not common, they are still a new concept, and in case those are stolen from you, it is not even sure that you have the right to claim them back. Read the forums about bitcoins, ask others if they have already paid in bitcoins on that website, and check the security measurements imposed by the website owners
- Check the exchange rate. During the Cyprus crisis, the bitcoin practically doubled its value during a few days. If you want to buy a product that has a value of 100$ on the common market, you might be willing to pay 5 bitcoins for it, when the value of a bitcoin is 20$, but tomorrow, you might be sorry when the value of the bitcoin goes to 30$
On the other hand, the popularity of bitcoins grows, new websites accepting bitcoins appear, so this might be a common payment method in the near future, so you should keep an eye on it, just in case.