How To Make The Best Use Of Bitcoin

February 12, 2021
Reading Time: 10 min
How To Make The Best Use Of Bitcoin - Blog Primexbt 11 02 btc

Bitcoin, the first and original cryptocurrency created in 2009, has in the recent year burst onto the scene in a number of areas. From finance to investing, technology and digitalization, Bitcoin has laid down a path for cryptocurrencies in our constantly modernizing world. 

However, despite the media attention and the high profile usage of the coin — From Elon Musk to famous rappers and sports stars — not every individual understands Bitcoin enough to get the best out of the cryptocurrency.

It is a digital coin that is made with individuals in mind, and holds aspects of democracy, decentralisation, and financial freedom that make it an ideal financial tool for every day users — if they know how to make the most of it that is. 

How To Get Bitcoin?

The best way to understand Bitcoin, and to get the most out of the digital currency is to win it. While Bitcoin is totally intangible, owning it in a digital wallet, or on a trading platform opens the door to getting the best out of Bitcoin. 

Bitcoin is still yet to be fully designated; some say it is like a currency and can be spent like money and easily traded for goods and services, while others say it is more of a store of value, like gold, and should be kept to appreciate like any other investment. 

However, this designation of the coin is still very much about personal preference, and a person can only understand what Bitcoin is to them when they get their hands on it. This is why it is important to understand the first step: How to Get Bitcoin.

Buy Bitcoins Online 

As mentioned above, Bitcoin is entirely digital and has no tangible properties. You can not physically hold, store or trade the cryptocurrency, but you can do all of these aspects online — including buying Bitcoins online. 

Bitcoin is a decentralized and distributed cryptocurrency that, over its near 12 years of existence, has distributed itself across the globe in various ways. It also has sprung up a large and functional global market place which has a number of ways in which to buy and sell the coin. 

Thus, buying Bitcoins online is now simple and relatively straightforward with there being a number of different ways to do it. 

Many different apps and platforms have sprung up that allow users to buy Bitcoin at the going market price. A lot of these platforms are trading exchanges where users are able to actively trade their fiat currency for Bitcoins at the going market price through an order book. This requires a bit of know-how and understanding of market conditions in order to get the best price, but it does offer some benefits. 

There are some other more simplified ways to buy Bitcoin, that have come in recent years from well known apps and platforms looking to get involved with cryptocurrency. The likes of PayPal, RobinHood, Circle and other payment and trading apps have now started allowing their users to also buy Bitcoin online. 

Earn Bitcoins

Another way to get your hands on Bitcoin is to earn them. Again, because this cryptocurrency is seen as both a currency and a store of value, there are many people who are happy for Bitcoin using be towards paying for goods and services. 

Earning Bitcoin can be done like earning any other type of currency — but it actually comes with some benefits, such as being entirely borderless. But, if you were to perform a service, you could always ask to be paid in Bitcoin and it would just require that you hand over your public wallet key, which is the same as giving your bank details out to be paid. 

There are other ways to earn Bitcoin, such as mining the coin yourself. Mining Bitcoin involves quite a high degree of understanding, as well as hardware to do the mining, but it allows you to passively earn Bitcoin by supplying hashing power to the network in order to mine new coins and increase the circulating supply. 

By mining Bitcoin, you are looking to solve a cryptographic equation in order to unlock the next block in the Bitcoin blockchain which comes with a reward of coins — currently it is 6.25 BTC reward. However, there are programs that allow you to share the commuting power of this activity to be rewarded incrementally for your contribution.

How To Use Bitcoins?

Once you have gotten your hands on some Bitcoin, it becomes about what possibilities you now have at your disposal. Bitcoin, as a digital asset that is liquid, transferable, storable and valuable has many different avenues of usage. 

The coin can again be used like a currency and spent on different goods and services; its borderless nature makes it a great global payment option. But, on the other hand, because Bitcoin grows in value, and sometimes drops, it is a good investment and a great asset to hold on it. Holding Bitcoin instead of spending it could mean your money doubles, tripples, or even more in a space of time. 

Of course, you can also make Bitcoin work for you. A major trading culture has grown around the asset because of its digital nature and volatile price. Trading Bitcoin is a powerful way to make your money grow and to increase the amount of Bitcoin you have based upon market fluctuations in price as well as its liquid nature. 

Spend Bitcoins 

Spending Bitcoins can open up a very new and global way to transact for goods and services. Bitcoin is not a currency like others, which are tied to certain nations with their own exchange rates and localized regulations. Bitcoin is stateless and global, meaning it can be spent almost anywhere in the world.

Some people and stores have realized that accepting Bitcoin and letting people spend their Bitcoin with them is good for business and have thus allowed people to use the coin for their goods and services, opening up this global marketplace. 

How To Spend Bitcoins?

Spending Bitcoins is however not as easy as spending cash, or even digital fiat payments through debit and credit cards — but it is looking to become easier. Spending Bitcoin still requires a little more work, in most cases. 

The most basic way to spend your Bitcoin is to agree with a seller to accept your Bitcoin and to send the coins to their wallet address. Wallet addresses work like bank account details so you can input their address, determine how much you want to send, and spend it with them. 

Because people are wanting to spend Bitcoin’s more, there are platforms looking to make it easier. Some of the major exchanges, and other providers have even started issuing Crypto debit cards which allows for a user to swipe at most merchants that accept either Visa or MasterCard and get charged out of their Bitcoin balance rather than their normal bank account. 

In this instance, the merchant is not often receiving the Bitcoin, rather the provider of the card is paying them in fiat and taking the equivalent in Bitcoin from your account — but for the user this still makes the process of spending Bitcoin easier. 

 Pros

  • The major pro of Bitcoin spending is its borderless nature. This means if you are in the United States and want to buy something from Australia, you do not need to worry about the difference in currency. 
  • More so, international transfers are notoriously expensive, and can often take as long as 10 days, where as with Bitcoin, the fees are often less than a percent of the overall transaction and can be completed in under 10 minutes. 

Cons

  • While spending Bitcoin seems easy enough, it can also be a bad idea if you want to preserve the value of your transaction. Bitcoin has become popular recently because of its vol;atile price, often growing in value substantially. This is good for investors, but not so for people spending it. 
  • For example, you could buy something in Bitcoin for $100 worth of Bitcoin one month, and by the next month, that same $100 in Bitcoin could be worth $200. This is wasted value for you holding the coin for that extra month would have seen it growth two-fold. 

‘Hodl’ Bitcoins

One of the more popular ways to get the best out of Bitcoin is to hold on to the coins — known in the cryptocurrency space as ‘Hodl’. Hodling Bitcoin has its advantages to, and makes use of the store of value side to the cryptocurrency. 

Most people first get into Bitcoin with the intention of holding it so that it can hopefully increase in value and their money can grow — but as it is a volatile and risky asset, the precise value of the coin can also drop significantly.

How To hodl Bitcoins And What Is Hodling? 

As mentioned, Hodling, the term given in the cryptocurrency space for holding onto these digital assets in order to profit from their typical rise in price, is an effective strategy and one that has been used by many just entering the space.

Effectively, hodling simply involves getting your hands on Bitcoin, either by buying them or earning them, and then keeping them stored safely on a range of digital solutions — be it wallets, hardware wallets, or even in exchanges.

With the volatility in Bitcoin, you can expect the price to be constantly changing, but in general, the coin has shown growth upwards since it began in 2009. However, the length you decide to hold can have a big impact on if you earn more money, or simply lose money. 

Pros

  • This strategy of getting the best out of Bitcoin is probably the most popular, and one of the easiest to do as well. It’s simplicity is that the less you do, the better the payoffs as Bitcoin is known to have bigger returns over longer periods. If you buy Bitcoin and hold onto it for at least a year, history dictates that you should make gains. This again requires no effort from you.

Cons

  • On the flip side, this method of getting the best out of Bitcoin can also lead to the opposite effect. Holding Bitcoins for a period that sees the price drop below your entry point can put pressure on you to sell which will lead to a loss of money, as well as time in the market. 
  • You are also dictated to when it comes to your gains or earnings. It is how the market moves that lets you know how much you will earn, you cannot do too much proactively to increase your earnings like if you were trading.

Trade Bitcoins

Trading Bitcoin is something that has gained a lot of traction in recent times as the news around the cryptocurrency space has burst into the mainstream. It is the volatility of the Bitcoin price that has made people come in flocks to the digital space to trade and make profit on the constantly moving price.

The growth of the Bitcoin space has seen a growth in the Bitcoin trading ecosystem as well. There are a number of places that offer an excellent and familiar digital trading experience. Many cryptocurrency trading apps have started offering traditional financial trading  products like magins, leverage for shorting and longing the price. 

How To Trade Bitcoin To Make Profit? 

Of course, the intention of trading Bitcoin is to try and make the market work for you and for you to make profit off the moving Bitcoin price. Trading Bitcoin is a skill in itself, and like any skill, it needs practice. 

The better you get at trading in Bitcoin, the more opportunity you have to use the tools and products that have come into the space to make trading Bitcoin that much more profitable. 

You can start to increase your profit in trading Bitcoin especially by starting to use leveraging and shorting. Leveraging lets you put more money onto a trade than you have so that when the trade pays off your profits are far larger. 

Additionally, shorting the Bitcoin market has also become a popular way to profit as it allows you to make big money, if using margin trading, even when the price of Bitcoin is falling. 

Pros

  • Bitcoin trading’s biggest pro is that it is the best and most active way to make money off of cryptocurrencies. With hodling, you are dictated to by only a rising market, with trading however, you have tools at your disposal which mean you can profit when the price is dropping (Shorting) and you can profit by leveraged amounts on the amount you put forward for the trade. 

Cons

  • Bitcoin trading, like any other usage of the volatile assets, does have its risk — but it is risk and reward. There comes higher risk if you look to make a higher profit, but it is also possible to find a sweet spot that works in your risk assessment to be happy in trading.

Bitcoin Trading Tips 

Bitcoin trading can be as easy as holding, just for a small period of time. You can buy Bitcoin on one day and then sell it the next — likely with only a few percentages in gains. But this is very basic and not as profitable as it can be.

The best Bitcoin trading tips are using margin trading, as well as shorting. When it comes to margin trading, platforms that offer it will allow you to put in as much capital as you want to, and you can borrow more from them, depending on the leverage percentage. 

For example, if you put in $100 and have 10x margin leverage, then you are essentially trading with $1,000. Thus, if your trade comes good, you are rewarded as if you had traded with $1,000. This can also be used in tandem with shorting where you are betting that the market will drop.

Shorting Bitcoin is a powerful strategy because when most basic traders and holders are looking for a price rise to make money, you can make money even when the market is falling in price. 

FAQ 

Can Bitcoin be converted to real money?

Bitcoin, while living totally digitally, has the ability to be converted into physical cash. There are a few steps involved, and it depends on the platform you use, but once you own Bitcoin, you can easily sell it for a fiat amount, and from there, there are fiat off ramps that will let you transfer that amount of money to your bank account where it can be drawn out as cash.

How Do I Use Bitcoin For he First Time?

To use your Bitcoin for the first time, it is best to find a platform that works for you that allows you to buy Bitcoin easily and with a simple user interface. These Platforms will usually allow you to deposit money with them to buy Bitcoin, or even allow for credit card purchases, and then give you a digital wallet where you can store the coins. 

How Do I Pay Someone Using Bitcoin?

 Paying someone in Bitcoin can be as simple as making a bank transfer. All you need to be able to pay someone in Bitcoin is to have their public wallet key. This is a string of letters and numbers, from here you can use a platform to send any amount of Bitcoin to an address you have. 

Conclusion

Bitcoin has come a long way in just a few short years. The way in which Bitcoin is growing has only increased in the last few years and in order to get the best out of Bitcoin, there are a lot of opportunities. 

Getting your hands on Bitcoin has never been easier, from buying it with different platforms, or even with credit and debit cards, to earning it through payment or even mining — it is not hard to get Bitcoins nowadays. 

After buying Bitcoin, you can of course use it like a currency and spend it, but there are other ways to get the best out of it, like hodling, and trading. 

Hodling is a popular and simple way to make Bitcoin work for you — but it has its risks, and it is also not the most active or profitable way to get the best out of it. 

Many people are now taking advantage of excellent Bitcoin trading platforms and looking to make the volatility of Bitcoin work for them as they increase their profitability with the digital currency. Trading Bitcoin is also simple to start, and made to be an easy and user friendly experience, especially if choosing a good app.

One popular app, for both newbies and experienced Bitcoin traders is PrimeXBT. This trading app has won awards for its excellent user interface, it is free, and also takes mere minutes to sign up to start trading with powerful trading tools. To quickly sign up with PrimeXBT, click here

Risk Disclaimer

Cryptocurrency trading involves high risk, and is not suitable for all investors. Before deciding to trade cryptocurrencies, tokens or any other digital asset you should carefully consider your investment objectives, level of experience, and risk appetite.

 

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