Be rich with bitcoin

Getting rich with Bitcoin

Introduction to the art of hodling

Dec 11, 2017 · 8 min read

DISCLAIMER: this post is not to be intended as an investment advice, but as a guide on how to protect investment once you already decided to put money in Bitcoin

Y ou may have heard a lot of stories of people who bought bitcoins a fe w years ago and got astonishing profits with the price rise, you may think that those were easy profits for lucky people, but when you look at it you will see that in most cases it wasn’t easy at all. In this post we will see what are the main mistakes that prevented people from becoming Bitcoin millionaires and how to avoid them.

Buying cheap was the easy part

People who got involved in Bitcoin in the early days had the occasion to acquire large quantities of coins for a low price, how they got there was often a mix of luck and intuition. To hear about Bitcoin in the early days you had to have some kind of luck, either having the right friends that would introduce you to it, follow the right online communities or read about it the first times it went on the news. To buy bitcoins you needed a bit of intuition of what it could have become, most people actually got in for the wrong reasons (e.g. free transactions) but still they saw some potential in that little decentralized money experiment.

However, getting the coins was the easy part, not losing them was much harder.

Common mistakes to lose your coins

Many people used to have have huge amount of bitcoins in the past, but then they lost most of them in multiple ways. Let’s see what are the most common mistakes that you have to avoid to hope to become a Bitcoin millionaire one day:

• Keeping money on the exchanges: Bitcoin wallets sometime can be a pain, you have to take care of your private key, have a strong password, back-ups etc, moreover if you are a trader you just want to have liquidity on a trading platform. For this reason many just prefer to leave their coin on the exchange where they bought it. Mistaking exchanges for banks cost a lot of money to several early investors, the infamous MtGox exchange caused thousand of bitcoiners to lose a relevant part of their holdings, even many Bitcoin Devs and known personalties in the industry got scammed by MtGox. So remember, you own your coins only if you control the private keys, otherwise you are just trusting someone else.
• Putting money in alt-coins: once you start to see some profits with Bitcoin, you may start to believe that you are some kind of finance genius and you should reinvest your fresh profit in something else. At this point you will probably try to invest in some other cryptocurrencies or even an ICOs, hoping for further profits. The truth is, Bitcoin is here to stay, it has network effect and validated use cases (store of value, data notarization and censorship-resistant transactions), alts are mostly just experiments, they come and go.

Most of them still have to find a valid use case and will die after a while, if you look at the top 10 coins in 2013 you won’t see many names that are still there today, you can expect the same to happen to most of today top 10 cryptos in a few years. Just remember that Bitcoin is scarce, alt-coins are not, every day there is a new one that will try to prove itself to be better than existing coins. Alts can be fun to trade, but as a long term investment you may lose most of your Bitcoin wealth.

• Daily trading: after your first Bitcoin returns you will start thinking that trading is really your thing, that you are good at it and you should do it to increase you bitcoin wealth. Unfortunately there are only three ways to make money with trading: you have more information than the market, you are way smarter than other traders (unlikely) or you are just lucky. If you don’t fit into the first two categories, hoping to get into the third one is just gambling, and the only one that will make money in the long term is the exchange with its very nice trading fees. If you are into gambling you can probably find some Bitcoin dice site with lower house edge than most exchanges’ fees.
• Take profit and stop loss: the only way to get a 100x profit on Bitcoin is buy them and don’t touch them whatever happens. When you start seeing 200% or even 1000% returns on your investment you may be tempted to take the profit and close your position in Bitcoin, those who did it in 2011 missed the 100000% extra returns of the following years. Similarly, it is challenging to avoid panic sell when you see the value of your investment only going down for several months, between 2014 and 2015 indeed many ceded and sold their positions at loss, missing the huge profits that the soon to come bull market could have provided. Nobody knows how the market will behave in the coming years, but if you see the long term value you will be able to keep your coins and eventually see the profits.

The biggest threats for a Bitcoin holder

Keep in mind that everybody wants your bitcoins, they will try to scam you in any possible way to get some of you precious coins and you should be prepared for it. People will try to convince you to invest in their alt-coin, fork-coin or ICO, to pay to join trading groups, to get access to trading bots and many other ways to put their hands on your wealth. Just ignore them, keep your coins safe and don’t get scammed.

The best thing you can do with your time while waiting for Bitcoin to explode to its full potential is to learn more about it. Don’t get scared by the technical aspects, many non-technical people managed to get a very good understanding, which really helps to grow the confidence in the protocol and its potentialities. Knowledge will protect you from scammers and from foolish investment temptations, but it will also provide you a better understanding on the future of Bitcoin and how the current issues can be solved.

Another big threat that you will have to deal with is the peer pressure to sell your coins. When your friends, colleagues and family will find out about your Bitcoin returns, they will very likely try to convince you to sell and take the profit. They will try to convince you that those coins would be better spent on a vacation, on a car, on financing a project or on traditional investments. They will even use the term “ liquidate” your investment, missing the point that people buy bitcoins because they believe it is the ultimate form of liquidity, there is just no better money out there where you can liquidate your wealth.

Even if you bought just a small quantity of bitcoins, or even a fraction, don’t tell anyone how much you have, when those coins will become valuable they will remember it and you will receive a lot of pressure to use them for whatever they believe is more important. Probably the best thing you can do is not telling anyone you invested in Bitcoin, just pretend you are not even interested, in this way you will avoid most of peers pressure problems, scam attempts and friends’ envy. At the beginning it can be tempting to brag about your gains because people will admire you, but in the long term keeping a low profile and privacy aware attitude will be more beneficial.

Mastering the art of hodling

Hodling is a term originated as a meme with the misspelling of the word holding by a crazy dude on the bitcointalk forum, but it later obtained a much deeper significant. The post is a bit confusing, but it really express the idea that only by keeping your coins and avoid distractions you can really enjoy the gains with no regrets.

The term HODLING now has a different meaning from simple holding. You are not just holding an asset, you are keeping it for the long term gain, you don’t fall for panic sell and you don’t let the market convince you that the value of your bitcoins is limited to the current market price. You know we are still in the early stage of a long process of price discovery for a new and superior form of money, and you will never sell until you are forced to, with no other assets to liquidate.

When you start mastering the art of hodling you won’t even care about the price any more, because you know that we are still so far away from the real value and either $1000 or $30000 don’t really mean much to you anyway. You know Bitcoin is the ultimate scarce resource, the only asset that is finite even in an infinite universe, and you are grateful to be alive in the right historical moment to have access to it while still so undervalued.

If I hold forever, how do I get rich?

For many people holding an asset forever does not seem a good deal, what’s the point of getting rich if you never enjoy the benefits? Just hodl as long as you can and wait for Bitcoin to be closer to its full potential. Now it is still hard to understand when we will get to that point because we are still very far away, but eventually an equilibrium will emerge and spending a few coins may not cause too many regrets any more. Just wait for everybody to get on board at least.

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Be Rich With Bitcoin

The only five ways to earn money through bitcoin that you need to know.

Bitcoin has been in the market for quite some time now and we cannot deny the fact that the process is already getting a bit stable. Though we cannot completely guarantee complete stability, yes there are many emerging ways through which you can make money through Bitcoin.

Today we have included all the ways you can make money through bitcoin in the form of trading and have deliberately excluded ways such as bitcoin as a form of payment.

1. HODL

Probably the eldest one you have seen till date. For everyone who is well versed with the technology, they know how important Bitcoin is. Bitcoin will soon be an alternative payment solution, especially for international payments. So the best way we can make maximum out of it is to invest in it from the present day itself.

HOLD comes from a meme that actually meant HOLD. HODL is a method in which you purchase currency today and keep it for a long time before planning to resell it. The best way is to buy when the prices are low on this date and keep it for a long time. The value will rise and will probably be much more than the same amount of money you have kept in your savings account. As because of inflation it’s value will decrease but for Bitcoin, it only increases as time passes.

2. Arbitrage

Bitcoin arbitrage is a brilliant example of how to make money instantly. We have a detailed article on ‘Bitcoin Arbitrage- The million Dollar Profit Factory’. There is always a slight fluctuation in the price of Bitcoins in different exchanges. The difference is due to different trade at different times. The best way is to have some amount of funds in different exchanges and to take advantage of the price difference. Bitcoin Arbitrage is really useful to stabilize the volatility across different exchanges.

3. Investing in Index funds.

Investing in Index funds is another smart way to invest with minimum risk involved. Platforms like Abra provide an excellent platform to invest with their predefined algorithms that provide the best investment breakups. All you have to do is invest your bitcoins and choose from the number of indices they provide.

4. Bitcoin trading

The practice of Bitcoin trading is more like bitcoin arbitrage but without the involvement of too many exchanges. You buy when the prices are low and sell when they are high. This practice needs good knowledge and experience in the market but can bring quick profits if done rightly.

5. Mining

The last and the oldest form to earn bitcoin is through mining. It is similar to any other form of mining like gold or other metals. Just like other mining takes out metals from the origins of the earth bitcoin mining solves a computational mathematical problem to mine out currencies.

But as times are changing the mining is becoming more difficult. Earlier people use to mine thousands of bitcoins through their home computers. But as we are approaching the bitcoin limit the cost of mining is increasing. It is almost impossible today for an individual to mine at his home given the amount of energy it requires. People are forming groups and mining in the mining pool to mine out currencies.

This is the reason why mining was a much better option in the past but today it is nothing more than huge energy loss and is almost comparable to the amount we will earn in return if successful.

Storing Your Crypto Assets

But what after earning these crypto assets? Just like you keep all your hard money safe in your wallet these assets also need to be kept safe somewhere. The best and the most secure way to save these assets are to store them in cold storage. Cold storage is an offline way of storing your assets. Only you have access to your assets with a key number that is not accessible to anyone.

Coming to cold storage options B2B Pay gives to an excellent solution for cold storage of your currencies. We have partnered with Barclay to keep your money safest and to enable you to transfer money internationally with the lowest cost involved.

We have our own Blockchain Bank account to ensure that your all crypto queries are solved along with providing you cold storage to keep your assets safe.

Now if you have read the whole thing and have come to this part, A big thanks! If you have anything else to add to the best practices to earn money through bitcoin do leave a comment below.

Hope this article helped you.

We’d love to get feedback from you and everyone in the network.

To learn more about B2BPay contact us at B2BPay Trade Payment Services.

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Want to be rich? Bitcoin’s limited supply cap means you only need 0.01 BTC

In 10 years Bitcoin’s finite supply will be nearly exhausted, meaning holders might only need 0.01 BTC to become filthy rich.

Saving 0.01 Bitcoin ( BTC ) might cost only $500 today but according to the current global wealth distribution and the digital asset’s limited supply, 0.01 BTC just might be enough to make one a millionaire in the future.

Bitcoin Supply and equivalent inflation. Source: Medium.com/@CryptoProfG Global wealth distribution. Source: Credit Suisse (SIX: CSGN )

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