You want to make money, and you like the idea of doing it all online. And, you’ve heard about bitcoin. Fantastic, that’s pretty much all you need to get started. A little willpower. Now I’m going to take you through exactly how I got started and what you need to do.
Just to clear one thing up before you even ask it:
Yes, you can buy and sell bitcoins on the same marketplace and still fetch profits.
Okay, so you’re going to be trading Bitcoin, and your going to shave off consistently healthy profits every single trade. But before we go any further, you’re not going to be trading the “price” as if it were an investment.
After optimising the operation:
I learned that you can make strong consistent profits from buying cheap bulk amounts and selling smaller amounts more expensively using only Bank Transfers. Arguably PayPal is more lucrative, but I found much more action by trading using bank transfer only!
One my first day I had over 30 trades, and I made £179~. The workload around all of my other projects was quite a lot–as you’ll probably find out–but if you’ve got the spare-time this is a hugely lucrative business to go into!
There are a few requirements that you need to fulfil before you start exchanging Bitcoin for real cash. All of which I’ll take you through momentarily.
After you’ve fulfilled the requirements, we’ll get onto storing your bitcoin, and how you can make a lot of money buying and selling your BTC (Bitcoin).
Starting capital. You need 0.4BTC. You’ve got the money, it’s not expensive, but its going to turn you into a fatcat. You can check the current Bitcoin price on Preev. Just type in 0.4 in the BTC box.
You need a bank account. Both are equally important, as you’ll come to find out later. You will buy Bitcoins low, and sell bitcoins high.
ID to verify who you are. No verification, no sales, no bitcoin, no profits.
Finally, you need a LocalBitcoins account. This is where all the deals will be taking place. This is the trading platform that you’re imagined future-self is going to trading on.
Storing Your Bitcoin
Keeping that trader image in your head, ask yourself, where does this person keep his money? Yes, in his wallet, and mostly in the bank. So that’s what you need.
To store bitcoin you need a bitcoin wallet. The wallet allows you to send and receive your bitcoin. Now, you can either go with your own software wallet or a “cloud-based” wallet.
Use the cloud wallet offered by LocalBitcoins–the place that you’ll be buying and selling your Bitcoins–it makes it easier for you to buy, sell, and keep your bitcoins safe.
LocalBitcoins’ Cloud Wallet
As you can see in the image below, the wallet is incredibly user friendly. You’ve got your “recieve bitcoins” number, which you can give to people if you want to receive–localbitcoins handles this automatically if you trade with them–and you’ve got your send bitcoins, if you want to send you’re bitcoins anywhere.
Not sure what a wallet is?
If you’re not completely sure about what a wallet is, then here’s a wonderful picture of the different types of Bitcoin wallet. There’s 3 types of Bitcoin Wallet; internet, mobile and desktop.
LocalBitcoins provides an internet wallet. It saves the time and processing power required to keep your wallet “synced” with the bitcoin network. It also saves a tonne of waiting times and learning exactly what the bitcoin process is. Trust me, stick with internet-based wallets hosted by trusted providers such as LocalBitcoins or BlockChain.
Getting your first batch of Bitcoins to sell
There are various methods that you can use to get Bitcoins; you can mine them, buy them, or obtain them illegally. The latter being a joke.
Mining them could be the most financially viable–provided you have a server-farm. But if you’re reading a guide on how make money exchanging bitcoins, you probably don’t own a bitcoin mining farm. Or maybe you do, and your competitors have got more processing power. Who am I to judge?
Buy Them for The Lowest Cost Possible!
So, you’re going to buy your bitcoins. This way you can secure a bunch of them whenever you feel like it.
Luckily you can buy them from exactly the same place as you’re going to sell them. And yes, there is a gaping hole in the market that needs to be filled.
How Do You Buy Bitcoins on LocalBitcoins?
Navigate to the “Buy Bitcoins” tab over at LocalBitcoins. Once you’ve signed up then you’ll see the screen in the figure below.
I wouldn’t advise buying bitcoins anywhere else on the web. Other commercial ventures are more likely to stack on healthy measure of fees for the process.
The more fees you pay, the less profit you’ll be making.
Once you’ve signed up to LocalBitcoins and clicked on Buy Bitcoins, you can see the Price/BTC column, followed by the limits column. These are both equally important.
Firstly, because you want to for the lowest price. Secondly, you need to buy within your limit. I mentioned earlier “the more the better”, but don’t go in all guns-a-blazing for your first shot at it. Get a feel for the method first, then expand.
As a general rule of thumb, purchases made via National Bank Transfer are the cheapest. So buy from here. This is especially important as you’ll realize further on in the guide when we’re selling the bitcoins back on the same website.
Choose a seller with good reputation
Ensure you choose a seller with decent feedback, and make sure you read through their reviews profile. This one of the best things about LocalBitcoins because you can veer yourself away from any potentially unscrupulous folk.
Verify your ID
This is an incredibly important part of the process. Whether you’re buying or selling, on both ends, you need to confirm your identity. This process is for the safety of everyone involved in the trade.
It’s unlikely that people will sell to you without ID, nor will they buy from you. So confirm everything; phone, address, email, ID.
Complete your first trade
So once you’ve verified yourself, picked out a good seller that offers good prices and limits within your reach, and made sure they’ve got good feedback, it’s time to complete the transaction.
Goto the seller’s name, make sure they’re online–you can see by the green or orange light–and click Buy. You’ll see a page with the “terms of the trade” for the buyer (you). Make sure you agree with all the terms as sometimes sellers may wish to wait a day for funds to clear. You want the fastest transaction you can get right?
If you’ve happy then fill in the amount you want to invest and hit “Send Trade Request”.
Then you’ll be transferred to a screen that has a Chat box and the trade terms once again. Read through the terms, then contact the seller to ensure everything is okay to continue before you pay the invoice. Some sellers may require additional ID!
They’ll usually confirm and send you the details in the chat box. Once you’ve sent your money, confirm the trade, contact them again, and await your bitcoin. It will be with you within minutes provided you have contacted your seller and made sure they are online.
Once you’ve recieved your bitcoin then make sure to leave good feedback!
Selling your Bitcoins for a Profit
Now you’ve got your bitcoins its time to flip them. For a nice healthy profit. The trick here is to sell your Bitcoins for more than you bought them. After all you want to make money right?
In comparison to the UKBT prices, the Paypal prices are much higher. Yet many people require this service.
Potentially more than there are people seeking out national bank transfers.
The reasoning behind this is that there is a common misconception that Paypal is less safe than Bank Transfers. And while yes, Paypal does offer the chance to dispute transactions. There are simple ways to provide solid security in your favor should you ever find yourself faced with a malicious customer.
If you’re not to keen on the Paypal method then simply stick to Bank Transfers and you can’t go wrong.
Staying safe when selling your Bitcions
As with any business you need to ensure you stay safe. While it is quite easy to make money with bitcoin, there are malicious people out there looking to steal bitcoins, but you can stay more or less 99.99% safe by follow my 6 rules of lucrative bitcoin exchange.
- Always request ID and Bank Card verification, even from repeat traders.
- Always check the Name, Address and ID on the Paypal Account you are receiving from.
- Always store all information you have on each buyer; never delete any transactions or messages.
- Never deal with anyone that has no ID.
- Never accept funds from an account that does not match their ID.
- Never lend, send first, nor assume money is delayed.
LocalBitcoins provides a brilliant Escrow service. This means that the Bitcoins are always held by LocalBitcoins until the seller confirm that have received their bank transfer.
This ensures that the buyer can also provide proof of payment and receive money’s owed if any issues arise.
Selling your bitcoins
Now there’s two ways to do this. Either you go big and post a trade, or you fulfill other people’s requests. Either way, if you want to make money with bitcoin, you need to sell it for more than you bought for. Here’s how.
Posting a trade
The benefit of this is that you can set your terms, and you control the trade. I suggest this for people that are investing a lot into this method as you’ll have more reach and more people offering to buy your BTC.
Now there is a very important part of posting a trade that you need to understand. When you sell via Paypal, you need Send an Invoice. To do this you request your buyers paypal address, then go to paypal, and send an invoice. This protects you from potential chargebacks as they have agreed to pay, instead of a fraudster deciding to send the money out randomly.
Fulfilling someone’s trade
This way is also lucrative, but it requires you to seek out your trades. In one way it keeps you safe, in another it requires more effort.
If you’re just starting out I would suggest this approach.
Scaling up your bitcoin money-making business
So now you know everything you need to know. But before you shoot away and start making your money, I want to leave you with a little more motivation. I want to show you your potential earnings from bitcoin exchanging, should you scale up your operations.
Note that the values are figurative, but they closely match the values you’ll be earning.
- First trade, buy £280 BTC, sell for £300
- Repeat 5 times, you’ll have £100.
Trust me when I say, 1 bitcoin (priced at 280) can be gone 5 minutes after you buy it and sell it for 300.
The idea here is to keep flipping your investment with a profit every time. Admittedly yes, it may take more than one trade to complete the entire “flip” but the figures make complete sense.
If you’re still at a loss for words as to what the hell I’m talking about I’ll make it nice and concise for you.
- Signup to LocalBitcoins
- Verify your account with ID, phone & address
- Buy some Bitcoins via Bank Transfer
- Receive Bitcoins
- Sell Bitcoins with a markup
- Send Paypal invoice
- Verify buyer’s identity and store details
- Receive Paypal money
- Send Bitcoins
- Leave feedback
If you have any questions regarding this method or any of my methods, as usual, leave a comment below.
Until next time,