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Methods for Making Bitcoin (BTC)


Around one in four Australians own cryptocurrency, according to data from Statista.

With a market capitalisation of around $US500 billion (as of 27th Aug, 2023), Bitcoin remains the single largest cryptocurrency on offer—and is a popular starting point for investors with an interest in crypto.

But purchasing Bitcoin through a crypto exchange isn’t the only way to acquire this digital asset.

Here are some ways to earn Bitcoin in Australia.

Remember: In Australia, the cryptocurrency market is largely unregulated, so if something goes wrong, you will not have access to compensation. With a cryptocurrency investment, all your capital is at risk. Only ever invest what you can afford to lose.

What Is Bitcoin and How Does It Work?

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Bitcoin is a form of virtual currency, which uses blockchain technology to handle transactions that take place between users of a decentralised network.

The Bitcoin blockchain is essentially a digital ledger. Groups of transactions are listed in ‘blocks’ that are added to a chain. Because all users have access to a copy of this ledger, it would be extremely difficult for someone to lie about how many Bitcoins they held, since the ledger would contradict them.

No central authority, such as a bank, is involved with handling the transactions. This makes the system totally peer-to-peer, allowing anyone with access to the internet to transact with others around the world instantly.

Related: Bitcoin Price Prediction

Different Ways To Earn Bitcoin

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1. Mining Bitcoin

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When Bitcoin transactions are completed—and a new block is added to the blockchain—a Bitcoin is ‘minted’ in a process known as mining.

The process of validating a transaction is complex, and requires computers in the Bitcoin network to solve a cryptographic problem. The first to do so is rewarded with the newly minted Bitcoin. By this process, around 900 Bitcoins are ‘mined’ every day.

Mining Bitcoin requires a huge amount of energy. By some estimates, carrying out a single Bitcoin transaction requires 707 kilowatt-hours (kWh) of electricity—roughly 60 times the amount used by the average Australian household in a day.

It also requires an elaborate ‘rig’, and specific mining software, making it difficult for new miners to break in. For this reason, Bitcoin miners regularly band together to create what’s called a ‘pool’—sharing resources and splitting profits.

It’s also worth noting that the amount of Bitcoin awarded for processing each transaction halves every four years. The next halving will occur in April 2024, which will drop the reward from 6.25 Bitcoins per block down to 3.125. There’s also a hard limit on the total supply of Bitcoins (21 million). Once this limit is reached, no more can be mined.

2. Lending Bitcoin

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Bitcoin lending is a popular method of earning Bitcoin.

Some centralised exchanges, such as Crypto.com, pool cryptocurrency deposits, and use it to offer interest-bearing loans. In exchange for depositing their crypto with the lender, some of these interest payments are funnelled to savers. The exact rate you could earn varies depending on the coin and term length you choose.

Decentralised platforms such as Aave and Compound are also options for lending Bitcoin, however, you will need to use a web3 wallet, such as Metamask. As these platforms exist on the Ethereum blockchain, the Bitcoin will need to be ‘wrapped’ first so it can be used on a blockchain outside of its own.

Interest rates vary—lending Bitcoin through Crypto.com could earn savers an annual interest rate of up to 1.5%, while lending Ethereum pays up to 2%.

Lending is a risky way to earn Bitcoin, since there’s always a chance that borrowers will default.

3. Bitcoin Trading

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Bitcoin trading involves buying and selling Bitcoin via an exchange platform with the goal of earning profit, which may or may not be invested in additional crypto holdings.

Strategies run the gamut from intra-day trading, to buy and hold, to hedging.

To maximise their chances of success, Bitcoin traders need to keep up with fluctuations in the market and stay abreast of news that could affect crypto.

Individuals keen to try their hand at crypto trading will need to carefully consider whether they have the time and capital to invest in this high-risk, speculative strategy.

4. Claiming Airdrops

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‘Airdrops’ are a marketing strategy used by certain crypto and blockchain companies to incentivise awareness raising and attract new users or investors.

During an airdrop, the company distributes free coins or tokens to cryptocurrency holders in exchange for meeting certain criteria.

Some companies simply ask for a crypto wallet address and some basic personal details, while others ask claimants to prove they already hold some of the company’s coins or tokens.

You may also need to complete tasks before coins are awarded, such as following the issuer on social media, writing reviews or sharing posts.

To take part in these airdrop events, you may need to have a social media account on platforms such as Twitter, Facebook or Telegram.

The most popular crypto airdrops in 2023 were Arbitrum and Maverick, scoring some recipients over $10,000 each. .

Crypto enthusiasts who want to take part in airdrop events should act quickly, since they typically operate on a first-come, first-served basis.

5. Help To Find Bugs

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Certain crypto developers may offer incentives to users who help them find bugs or glitches in their systems.

For instance, the crypto exchange Kraken has a ‘Bug Bounty’ program, which rewards users with Bitcoin for finding vulnerabilities or bugs. There are also community-driven contract audits, which take place on platforms like Code4rena, that can be extremely lucrative for those with a keen eye for high-severity bugs hidden in a project’s code.

6. Incentivised Learning

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A few trading platforms allow users to earn small amounts of cryptocurrencies by completing lessons on crypto and blockchain-related topics.

Coinbase and Binance, for instance, allow users to earn a few dollars’ worth of certain cryptocurrencies in exchange for completing lessons about how they function.

Bottom Line

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In the world of cryptocurrency, there is no easy or low-risk way to earn extra Bitcoin.

However, if you are familiar with the fundamentals of cryptocurrency and comfortable taking some risks, there are plenty of options to try.

This article is not an endorsement of any particular cryptocurrency, broker or exchange nor does it constitute a recommendation of cryptocurrency as an investment class. 

Frequently Asked Questions (FAQs)

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How to earn Bitcoins for free?

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Earning Bitcoins for free can be done through various methods, such as:

  1. Mining Bitcoin: Validating and processing bitcoin transactions.
  2. Lending Bitcoin: Lending your bitcoin on centralised exchanges or decentralised platforms.
  3. Bitcoin trading: Buying and selling Bitcoin to increase holdings.
  4. Claiming airdrops: completing tasks to be eligible for airdrops of news tokens from blockchain projects.
  5. Helping to find bugs: Finding vulnerabilities or bugs in systems of certain crypto projects.
  6. Incentivised learning: Completing lessons on crypto and blockchain-related topics on trading platforms such as Coinbase and Binance.

How to earn bitcoin in Australia?

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In Australia, there are several ways to earn Bitcoin. You can mine Bitcoin, lend it on exchanges or decentralised platforms, trade it to increase holdings, claim airdrops, help audit projects to earn bug bounties, or complete lessons on crypto and blockchain-related topics. Moreover, you can also accept Bitcoin payments for your business, engage in peer-to-peer trading, or earn crypto cashback when shopping online.

How do beginners get Bitcoins?

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Beginners can get bitcoins by purchasing them on a cryptocurrency exchange, which is the most straightforward method. For beginners looking for a small amount of Bitcoin, it is also possible to use Bitcoin faucets, receiving Bitcoins as gifts, tips, or participating in affiliate programs of crypto exchanges or businesses.

How can I make more Bitcoin?

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You can make more Bitcoin by:

  1. Mining Bitcoin.
  2. Lending Bitcoin on exchanges or decentralised platforms.
  3. Trading Bitcoin.
  4. Participating in airdrop events.
  5. Helping to find bugs in blockchain projects.
  6. Completing lessons on crypto and blockchain-related topics.

Remember, all cryptocurrency investments carry a degree of risk, and it is important to only invest what you can afford to lose.

Sources


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