As the popularity of Bitcoin and other electronic currencies rise, more people begin to notice, take an interest, and question how they too can profit. But how would a beginner or even someone who is somewhat familiar with the concepts expect to compete against experts who know how to work the system? The perfect strategy is found after knowing how Bitcoin works, what a good payout looks like, and knowing various strategies of what does and doesn’t work.
Bitcoin and How it Works
Bitcoin was created in 2009 by a man named Satoshi Nakamoto. Nakamoto wanted to create a peer-to-peer cash system that was entirely electronic. It was entirely feasible due to the technology that existed at the time. What is different about the electronic currency Nakamoto created was that there is a finite amount of Bitcoin in the world. Unlike governments that can print more money, there can only ever be a set amount of Bitcoins. This is one reason why people place value on the electronic currency. If everybody wants Bitcoin, the value increases. Similarly, if nobody wants the currency, it loses its value. And, just like investing in stocks, this is the part where people either make a lot of money or lose it.
What Defines A Good Payout?
Any person on the streets knows “buy low, sell high,” which means to buy an item when it is in low demand or has low value and then sell it when there are more demand and greater value. That is how one profits from the item, or in this case, Bitcoin. What would be considered a good profit in today’s market will differ from what was a profit back then. In general, if a person “sells high,” he or she is making money. A good payout is reliant on the person, the original investment, and how much received in return. Investing one dollar and getting ten dollars back is ten times better than investing one thousand dollars and receiving two thousand in return.
Gaining money using Bitcoin can be tough. Some will buy small amounts of Bitcoins at a time and wait for the value to jump before selling it off. That strategy is safe, but won’t maximize the earnings. Some use insider trading to know when the value will increase and invest in Bitcoin beforehand. This strategy can be very profitable, but illegal. One must be careful about the market though. According to Mati Greenspan, a senior market analyst at eToro, “Stocks are pretty volatile, but bitcoin is way more volatile.” The safest strategy is to know the market before investing. Know when the value is down and why. Know when the value goes up and why. Use the observations to predict when it is the right time to invest. By knowing which factors affect the market, one will be able to see these factors preemptively and use them to his or her advantage.
There are many factors that go into electronic currency markets. The best way to profit from any of them, including Bitcoin, is to simply know the market and how it behaves. While there are other strategies that work just as well, or even better, knowing the market and making use of its factors for investments purposes is ultimately the perfect strategy because it is legal and profitable.
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