The easiest way to make money with Bitcoin (BTC) is to buy it and hold it. All you need to do is go to one of the 3 main places to buy BTC (CoinBase.com, LocalBitcoins.com, or a BTC ATM), buy some coin and every 6 months to a year check back on the price.
I've done other posts about how BTC has performed over the past few years. I think this statement sums it up well: If you invested $10,000 in Bitcoin and $10,000 in Gold in 2010, that the Gold would now be worth $9,900 and the Bitcoin would be worth over $200,000,000.
There are a lot of people who don't buy and hold but rather day-trade BTC. Just like any highly volitile asset, some of those traders will get rich and some will go broke. Since BTC has always seemed to go up most traders I know are making a lot of money as long as they don't short BTC.
But, my favorite place to make "big" money on crypto-currencies is on the alternate, or "Alt" coins. Bitcoin is only one of hundreds of block-chain based coins. Bitcoin is by far the biggest one, but there are about 8-10 other big players. Then there are hundreds of also-rans who hope to be a big player some day.
So the question is, with all those choices, how do you know which Alt coins to buy? The answer may not be as complicated as you expect. Ideally you'd do your homework. Google the coin and see what it's about. Why was the coin created, what is it's intended use? Can you relate to that intended use and do you think it's valid, or do you see it as a stretch, something that a marketer came up with and that they are trying to capitalize on. Most importantly for me, does it have a good "team".
For example, Ethereum is not intended for one specific vertical market (one tight group of people) but rather it is positioned as the next generation of Bitcoin. The developers looked at Bitcoin and said "How can we make this better". A lot of other Alt coins do that as well. Some succeed, some fail. Ethereum actually came out with the concept of "Smart Contracts" as part of the blockchain. You can read about that more somewhere else, but that's a pretty substantial improvement and/or "invention". Therefore when I first came across Ethereum and I read up on it I thought it seemed to be a coin with a lot of potential. It just happens that is how it turned out. ETH is one of the most successful coins after BTC and in fact may replace BTC some day.
I'm hesitant to call out and criticize any one coin here, but let's just say that there are some coins you'll research and you say to yourself, no way. It is clearly just a spin on an existing concept and therefore their chances of success is very slim.
There are 1000's of coins on the exchanges and every single day some coins are added and some coins drop out and just go away. You want to find the ones that bring something of value to the table and which have a strong web presence and development team backing them.
Next, check out how many coins are out there, how many there will be in total, and what is the current market capitalization for the coin (it's total worth). CoinMarketCap.com does just that for you (http://coinmarketcap.com/currencies/). You can find pretty much any coin there and click through and see all the details about each coin.
If the market cap is already high, then the coin doesn't have very far to grow. On the other hand, if the the market cap is very low, then you may have found a coin that could still appear "correctly priced" at several times it's current price. NXT happens to be one of those coins right now. NXT is in my top 10 list of favorite coins, but it is ranked 28th on a list of market capitalization. That tells me that NXT has a long way to go to the upside.
You also have to consider how many of the coins have already been issued and how many more may be mined. There are some coins where ALL the coins are already mined and the creators are holding more than 50% of the total circulation. That type of set up doesn't smell right to me.
Here's one "personal" tip. Perhaps the easiest way to find a coin with potential has to do with how Poloniex groups coins. You have to have a Poloniex account to have access to this, but if you do then this is a quick way to show you a list of coins that Poloniex considers to have potential.
On the right-hand side of the Exchange screen on Poloniex, they provide a list of all coins you can trade on their platform. That list has several tabs of currency pairs at the top. For example you can click on "BTC" to see how much your coin would cost if you were to buy it with Bitcoin. What I have found is Poloniex is very good at anticipating which coins will grow a lot. When they see a coin with growth potential they add it to their "USD" currency tab. So, if you see an inexpensive coin in the USD currency tab on Poloniex, it is a pretty good bet that coin will see substantial growth. At least that has worked for me very successfully several times so far.
Bottom line, keep your eyes and ears open. Read everything you can on Crypto-currencies and when you find a coin do your home work. What does the coin do and how good is the team that is going to support it. Maybe most of all, what is the market cap and what does the total circulation look like.
I've done other posts about how BTC has performed over the past few years. I think this statement sums it up well: If you invested $10,000 in Bitcoin and $10,000 in Gold in 2010, that the Gold would now be worth $9,900 and the Bitcoin would be worth over $200,000,000.
There are a lot of people who don't buy and hold but rather day-trade BTC. Just like any highly volitile asset, some of those traders will get rich and some will go broke. Since BTC has always seemed to go up most traders I know are making a lot of money as long as they don't short BTC.
But, my favorite place to make "big" money on crypto-currencies is on the alternate, or "Alt" coins. Bitcoin is only one of hundreds of block-chain based coins. Bitcoin is by far the biggest one, but there are about 8-10 other big players. Then there are hundreds of also-rans who hope to be a big player some day.
So the question is, with all those choices, how do you know which Alt coins to buy? The answer may not be as complicated as you expect. Ideally you'd do your homework. Google the coin and see what it's about. Why was the coin created, what is it's intended use? Can you relate to that intended use and do you think it's valid, or do you see it as a stretch, something that a marketer came up with and that they are trying to capitalize on. Most importantly for me, does it have a good "team".
For example, Ethereum is not intended for one specific vertical market (one tight group of people) but rather it is positioned as the next generation of Bitcoin. The developers looked at Bitcoin and said "How can we make this better". A lot of other Alt coins do that as well. Some succeed, some fail. Ethereum actually came out with the concept of "Smart Contracts" as part of the blockchain. You can read about that more somewhere else, but that's a pretty substantial improvement and/or "invention". Therefore when I first came across Ethereum and I read up on it I thought it seemed to be a coin with a lot of potential. It just happens that is how it turned out. ETH is one of the most successful coins after BTC and in fact may replace BTC some day.
I'm hesitant to call out and criticize any one coin here, but let's just say that there are some coins you'll research and you say to yourself, no way. It is clearly just a spin on an existing concept and therefore their chances of success is very slim.
There are 1000's of coins on the exchanges and every single day some coins are added and some coins drop out and just go away. You want to find the ones that bring something of value to the table and which have a strong web presence and development team backing them.
If the market cap is already high, then the coin doesn't have very far to grow. On the other hand, if the the market cap is very low, then you may have found a coin that could still appear "correctly priced" at several times it's current price. NXT happens to be one of those coins right now. NXT is in my top 10 list of favorite coins, but it is ranked 28th on a list of market capitalization. That tells me that NXT has a long way to go to the upside.
You also have to consider how many of the coins have already been issued and how many more may be mined. There are some coins where ALL the coins are already mined and the creators are holding more than 50% of the total circulation. That type of set up doesn't smell right to me.
Here's one "personal" tip. Perhaps the easiest way to find a coin with potential has to do with how Poloniex groups coins. You have to have a Poloniex account to have access to this, but if you do then this is a quick way to show you a list of coins that Poloniex considers to have potential.
On the right-hand side of the Exchange screen on Poloniex, they provide a list of all coins you can trade on their platform. That list has several tabs of currency pairs at the top. For example you can click on "BTC" to see how much your coin would cost if you were to buy it with Bitcoin. What I have found is Poloniex is very good at anticipating which coins will grow a lot. When they see a coin with growth potential they add it to their "USD" currency tab. So, if you see an inexpensive coin in the USD currency tab on Poloniex, it is a pretty good bet that coin will see substantial growth. At least that has worked for me very successfully several times so far.
Bottom line, keep your eyes and ears open. Read everything you can on Crypto-currencies and when you find a coin do your home work. What does the coin do and how good is the team that is going to support it. Maybe most of all, what is the market cap and what does the total circulation look like.
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ReplyDeleteGreat info….thanks a lot bro! Now, I have a deep insight on how to make money using BitCoins. For similar info please visit everus dot org roadmap.
ReplyDeleteI will explain more further why it cannot be listed in Exchangers.. As we know that over 700 crypto coins are listed in the exchange (Bittrex, Poloniex, Cryptopia,NovaExchange) and other exchange companies. Because their value depends on the Supply and Demand activities. As you notice, only Bitcoin has the highest value in all of them and other coins value is below $20.. All of the coin developers there are working hard for their coins to be noticed so more people will interact and use their coin for Buying and if more buyers will interact to that coin, the demand will be high and when the supply is few, the bidding of price will start to happen Neo Gas Web Wallet
ReplyDeleteI like Coinmarketcap App. It's pretty usable if you want to know what's going on with crypto currencies.
ReplyDelete