Feb 072014

The concept of Bitcoins has taken the world by storm, ever since its inception in 2008. Since it is considered to be one of the best sources of legitimate cryptocurrencies, a lot of people and companies alike are beginning to see the importance of using Bitcoins to do their financial bidding.

There are 3 major ways to transact in Bitcoins: mining, buying and trading. Now the pertinent question here is, “Is it better to mine, trade or buy Bitcoins?”

Let’s check each in detail and see which comes out to be the best of the lot.

Bitcoin Mining

Bitcoin Mining is the process through which Bitcoins are created and circulated into the Bitcoin system, as well as added to the blockchain, which is a record of all Bitcoin transactions through time. The mining process is rather complicated and needs an expensive and well planned strategy in order to make a profit. A lot of Bitcoin mining today is run via large data centers and not in people’s homes. There are some reasons which make mining all the more difficult and cumbersome to carry out. These can be categorized in the following manner:

  • Security of the networkThe mining process is decentralized. Anyone who possesses a good strong hardware system and a stable Internet connection can carry out the mining process. However, if an individual or an organization possesses more than half the control of the Bitcoin network’s mining capacity, then there are chances of the network being unduly influenced. This is where the breach of security happens, making the procedure insecure.
  • Transaction fee: Given the high transaction fee involved with the mining of Bitcoins, there is a diminishing interest within the minds of people. The declining rewards and the increase in the transaction fee, creates a negative ripple in the market, causing a substantial shift in the minds of the people.
  • Mining complexities: The level of mining difficulty gets adjusted every 2 weeks. As the complexity level fluctuates, so does the mining possibilities. If more computational power is employed, chances are that the mining procedures would also become more difficult, causing miners to avoid mining in the long run.

Buying Bitcoins

Before you actually think of buying Bitcoins, you should think through all the options and then arrive at a well informed decision. Today, there are many great sources throughout the world to buy Bitcoins, like Coinbase. Here are some reasons why you may want to stay away from buying Bitcoins:

  • Losses: With some of the other financial instruments available in the markets these days, there are safety procedures in place, which help you in case of any imminent disaster. However, with Bitcoins, there is no such safety net, which can bail you out in case your Bitcoins get lost or stolen. While you can store the Bitcoins in a wallet on your hardware or keep them with a third party, there is still no surety, that your investment will remain safe eventually.
  • Regulation: If regulatory advice is to be believed, one would realize that there are higher chances of being swindled out of your hard earned investment as would be the case otherwise. The lack of strong regulation on this volatile virtual currency can leave you bare, making it hard to invest in Bitcoins.
  • Trading Bitcoins: Like any financial instrument, even Bitcoin trading is somewhat reliable and profitable. The trading procedures use the rise and fall in the price of the virtual currency, to actually estimate the profit/loss in the exchange. Sharp skills to trade Bitcoin’s value fluctuations is what makes a successful Bitcoins trader; a trader by profession is required to offer exchange services to other Bitcoin traders, so that he/she can himself make a net profit on other investors’ transactions. A trader can make buying offers, when the price is low, and later on sell the currency at a higher price, allowing him to make a profit. However, in order to be a successful trader, one has to possess impeccable knowledge on how the system works.


These are the three ways to transact in the Bitcoin economy, and in the process, gain some Bitcoin. Simply buying Bitcoin is the simplest of all but has a limited profit potential. Trading Bitcoin is risky but can have the highest return among the three methods.

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Sep 262013

best bitcoin sites
Here are the best Bitcoin sites that will allow you to earn Bitcoin online. If you’re looking to make some Bitcoin performing small tasks online, then this is the perfect list for you. I update this list regularly, with only the best sites out there.

The Bitcoin economy is a fast changing one, and there are several sites that come up that allow you to make some Bitcoin online. You should remember that this can also be a time-trap and you can get sucked into it for long hours without having much to show for it. This is why you need to filter these down.

Also, I am not covering the obvious ideas – yes, you can just get a job, get paid in USD and convert those to Bitcoin but that’s not the point of this article. Remember that small amounts of Bitcoin can add up, as the following Wired article shows.

For a more comprehensive list, see the how to earn Bitcoin online page.

Updated: 02/28/2016

A special mention to online wallets like Circle and Coinbase that make it really easy to buy and sell Bitcoin to a lay-person. Of course, if you have substantial amount of Bitcoin (over 5 BTC), get a Trezor or KeepKey – hardware wallets that stores your Bitcoin offline in a secure enclave.

#1 BitcoinGet: The popular site that was mentioned in the Wired article on how homeless guys were able to use BitcoinGet as a form of ‘digital hustling’. There are two popular ways to earn some Bitcoin here – Micro-tasks from CrowdFlower and watching Virool videos. The micro-tasks pay anywhere from 30-600uBTC depending on the task, and there are several tasks that you can do in a single day. The virool videos currently pay 40uBTC for 30 seconds of video. Availability depends on the location (e.g. in the US, on an average, there are 10-12 videos per day, so you can earn close to 400-500 uBTC just through the videos and then some more from the micro-tasks). Payments are automatic, and usually processed pretty promptly within a day or two. The site has also added Surveys to the list of ways to earn Bitcoin.

#2 Paid to Click (PTC) Sites Paying in Bitcoin: BitsForClicks (previously Coin Ad): This has remarkably become the most popular and sustained Paid to Click Bitcoin site. There are several reasons – it has a very good inventory of ads and it always has a steady supply of ads. Being one of the oldest, still surviving Bitcoin PTC sites also helps. The low minimum payout makes it a low risk investment in terms of time for many bidders. They have done pretty well so far – it is a relatively old site, and is growing in popularity with the advertisers. If you have to pick just one Bitcoin PTC site, this should be the one. As a bonus, if you like this niche, also check out BTCClicks.

 Bitter: Bitter started off as the best Bitcoin PTC (paid to click) out there, but the experience has deteriorated over time. Still, if you’re a PTC enthusiast, it is worth checking out. On the plus side, they don’t use silly ‘bux scripts’ that all other PTC sites seem to be using, but instead do it from scratch, in HTML5, giving Bitter a much nicer user experience. There are also no silly recaptchas to complete – the verification is simpler. This is especially important if you’re accessing this via TOR where recaptcha is a pain.

#3 21 Tasks21 is the Bitcoin startup with the largest funding so far. It is purely a Bitcoin company so far, not a ‘blockchain’ startup. This makes it one of the best Bitcoin sites out there, and certainly one of the most promising ones. It uses Bitcoin to try and do things that weren’t feasible in the old economy. Even if these things don’t add up to much today, they can be game changers tomorrow. There are a few ways to earn money via 21. If you’re someone well known, you can set a price for people to reach out to you, and when you reply to their message, you get your set price. This reduces spam, and you get paid for the effort (or donate your earnings to charity). There is also 21 tasks that you can do on your phone or some of them on your desktop. The earnings are decent – significantly higher than the PTC type earnings. In the future, it will perhaps compete with the likes of Amazon’s Mechanical Turk.

#4 iFaucet: This is the best Bitcoin faucet rotator, which can give you a fairly significant amount of satoshis for faucets if you follow all the sites. It manages the entire process for you, and is a fairly comprehensive and updated list of all the Bitcoin faucets out there. In addition, it has very good search filters, so if you hate one type of captcha, you can remove it from the list. You can also blacklist sites that you don’t like. Finally, iFaucet blocks annoying popups and other undesirable page elements, so it’s a smoother browsing experience.

#5 Anonymous Ads: This is my favorite Bitcoin ad network and I like this more than others like CoinURL, BitMedia, Operation Fabulous, BitAds. Unlike the others mentioned which are pay-per-click, anonymous ads is a pay-per-impression system and the payment really depends on a number of factors. The stats are amazing and everything is open for you to see. I use this on my site as well and I am happy so far. If you own a website or blog, this is a very passive way to make Bitcoin. They are perhaps the longest running ad-network for the Bitcoin community, and the owner has been a very regular member of Bitcointalk forums since the very beginning.

#6 Coinality: Coinality is hands down the best jobs aggregator in the Bitcoin space. If you’re interested in the Bitcoin and cryptocurrency space at all, definitely keep an eye out on Coinality. It allows special listings on its own site, but also sources jobs from across the web from Upwork and Elance to mainstream job sites like Indeed. They also have jobs of all types, from full-time developers to freelance writers. You will find small gigs, like logo design to full-time software developer positions on companies like Coinbase.

#7 Predictious: Predictious is a Bitcoin prediction market, and you could earn money by suggesting new bets/statements and also predicting the right outcomes of future events. However, be on the lookout for some new decentralized prediction markets that might eat centralized prediction markets’ lunch. Most notably, Augur, built on Ethereum but allows Bitcoin bets directly, is building a fully decentralized prediction marketplace that will easily undercut Predictious in terms of trust, security, and fees. Augur has raised several millions of dollars overall.


#8 Ads4BTC: This is a very nice Bitcoin PTC site, quite similar to Neobux in its look and feel, but with Bitcoin payments of course. They generally have a good ad inventory, which is essential for a long-term sustainable PTC. The ads are sorted based on the time, and the payment per ad is upfront as well. The site has a lower payout available through a microwallet, or regular Bitcoin payments as well but at a higher minimum payout.

#2 ABitBack: This is another popular site to make some free Bitcoin online. The most popular service here is Radio Loyalty that pays you 1 point (30uBTC) every few minutes for just listening to the radio. Supersonic Ads and Virool Videos are also popular, although Virool videos pay less than at BitcoinGet. There is also support for Litecoin (also see how to earn Litecoin).

#4 Coin Chat: This is one very great way to make some Bitcoin just chatting with your fellow Bitcoin enthusiasts and learning about everything from Bitcoin to politics to programming. You can just have fun and chill in any of the chatrooms and you’ll randomly get some Bitcoins. It isn’t very much, and you should do this only if you enjoy getting to know other people on the internet in the Bitcoin community, but say an hour of serious discussion can yield about 1mBTC.

#5 Bit Visitor: I had to include this because it is one of the oldest, still working paid-to-click ad viewing site that pays quite well. You can reach payout almost every day because the minimum is just 100uBTC. The site has had problems on and off, but overall it has a good name in the community and attracts lots of eyeballs and businesses.

#6 Daily Bitcoins: This is the only faucet I’ll mention just because it is that good. It pays 10uBTC every hour. If you have the time and you spend a lot of your time online, you might as well use it every hour. Note that there are also several bonus payouts, with as high as 1000uBTC payments (rare) but several 50uBTC payouts. You’ll find these under Prizes tab on the top. You’ll also get several vouchers for PeerBet and coupons for advertising on that site as bonus.

#3 Rewards Live: Rewards Live is quickly becoming one of my favorite site for micro-payments in Bitcoin, even though I was initially skeptical of its success. They are doing pretty well and look quite sustainable. Rewards Live perhaps has the highest number of different ways to earn Bitcoin online, which is why I would classify them in the list of best Bitcoin sites. Here is just a snapshot: Matomy, Sponsor Pay, Radium One, Super Rewards, WallAds, RevU, Payment Wall and more being added. Even the payout options are plenty – you can withdraw via Bitcoin, Litecoin and Namecoin, but if you don’t want to go via the cryptocurrency route, there are scores of gift cards where you can withdraw as well (of course, I would suggest Bitcoin/Litecoin/Namecoin!) The site is adding luck-based giveaways to the various ways to earn money, which is an added bonus.

These are the best Bitcoin sites that I know of where you can earn some Bitcoin online. I have a more comprehensive free Bitcoin section that might interest you as well. What do you think of these services? Let me know.

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Sep 192013

Bitcoin Scams

Beware the Bitcoin scams – they are here, live and well, all ready to rob you out of your Bitcoin. If anything, the frictionless Bitcoin transactions make it an ideal vehicle for scammers. If something appears fishy, just because it has a fancy Bitcoin name in front of it doesn’t make it legitimate. You need to understand the very basic ideas of risk and return and anyone who ‘guarantees’ you a return above that of the treasury bonds is simply lying (the libertarians in the audience will note that the government is lying when with the treasury bonds too, but that’s a discussion for another day).

Even though many people who consider themselves tech-savvy promise they’ll never fall for these scams, there is plenty of evidence to the contrary, especially with social-engineering attacks (e.g. see this for a few examples) and other resources these scammers employ. With Bitcoin, things become even more tricky since there is no ‘chargeback’ so to speak and it’s virtually impossible to identify the real identity of a scammer.

Bitcoin Ponzi Schemes

The most common form of Bitcoin scams take the shape of a simple ponzi scheme. If you don’t already know, that’s a scam where new money is used to repay old commitments instead of a real investments being the source of wealth-creation. This is obviously unsustainable and has to fail at some point of time (the Madoff case was a $50 billion ponzi scheme).

The best known Bitcoin scam to date also happens to be a ponzi scheme by a Texas man who ended up collecting more than 700,000 Bitcoin! What was he promising? A 7% weekly return. And people genuinely thought this was legitimate. What a tragedy!

The New Bitcoin Ponzi Scheme

The problem with Bitcoin ponzi schemes is that there is no oversight. It isn’t terribly hard to slap together a website that accepts Bitcoins (it only needs to accept Bitcoin, not pay back!) that promises riches. I was surprised that BitVisitor, a generally respected advertising network in the Bitcoin community, ran this Bitcoin ponzi scheme ad on its network. I hope people didn’t fall for it.

Site: GrowCoins (growcoins dot com. I refuse to link out to this site from my blog)

About the company – from the company’s homepage:

Growcoins.com will work for ever, With our company your dreams come true. Growcoins.com is engaged in the investment increase your money. That is, if you urgently need a large sum of money, or make money online, our site is for you. Our company has many experts who are constantly monitoring the rise and fall of shares in other companies and exchange rates.

(bold is mine)

Here are the advertised rates:

Bitcoin Scam Ponzi GrowCoins

Yes, GrowCoins is a ponzi. What a shocker. Look at their ‘diamond’ package above. They are promising to pay out 10.5% daily forever. If you are still considering, this is how 10.5% daily interest rate is going to look:
Day-1: $100
Day-30: $2332
Day-100: $3.63 million
Day-365: $4.39 X 10^18, which is 4.39 trillion trillion dollars.


The early adopters in the Bitcoin community are fairly smart, and one would expect they shouldn’t fall for such outright scams. Then again, the biggest ponzi scheme in Bitcoin’s history did manage to get more than 700,000 Bitcoins which is a lot. These are best weeded out of the economy, but with something as incredible as Bitcoin, there are bound to be these kinds of Bitcoin scams I guess. Stay away.

Photo Credit: Andrew

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Aug 142013


Where do you buy Bitcoins in the US? There are several different ways to do it, depending on an interplay of privacy and cost. Right now, in the Bitcoin market, there exist considerable price differences with different sources. You need to be intelligent about buying Bitcoins in the US because you can usually get a much cheaper rate than at MtGox for instance. Here are some best ways to buy Bitcoins in the US that I found –

1. Coinbase: Extremely convenient, not anonymous, best price

If you’re not looking for anonymity, Coinbase will give you the best price, period. I found the price here to be lower than even the in-person meetups where people had made a market in BTC/USD. It is also usually about 10% cheaper than MtGox price, so there is really no reason to buy on MtGox ever (even including the 1% fees charged by Coinbase). The only reason you might want to move away from Coinbase is if you want to buy Bitcoins anonymously.

I have the highest confidence in Coinbase also because it is backed by some of the biggest Venture Capital firms, so I know they are not pulling a scam.

Also, if you complete all the identity verification processes, you can buy up to 50 BTC instantaneously each day. That means you don’t even have to wait for confirmations to spend your Bitcoins that you bought. I think it’s a great service.

2. Bitcoin Brokers: Completely anonymous, Premium Pricing

This is a completely anonymous service. You deposit cash into the bank account of the seller of the Bitcoin and you’ll get your Bitcoin when the seller confirms or within 48 hours of this. The price is based on the MtGox price plus a premium, usually 2%-3% so it is definitely much more expensive than Coinbase. However, you don’t need to disclose any identities in this case. The service itself acts as an escrow and you pay a 2% fees.

This is a good method to buy Bitcoins in the US if you’re located far away from a city or a place where it is hard to meet people in person and you still want to maintain your anonymity. Or for whatever reason, you don’t want to meet sellers face to face to confirm transactions.

3. LocalBitcoins: Convenient, semi-anonymous, average pricing

Localbitcoins is a site that aims to bring buyers and sellers together. The price is usually higher than what Coinbase offers, but you have relative anonymity here because you don’t really need to reveal your identity when buying Bitcoins. That being said, there’s always an element of risk when you’re dealing with this locally because someone might try to scam you. Keep your guard up and always meet at a public place and wait for at least one confirmation of the transaction before you part with your cash.

If you live in a place like New York, you can buy Bitcoins in New York from a very enthusiastic little group of people who meet at Union Square every Monday from 5pm onwards, called now the Satoshi Square meetup. There are similar meetups in a number of larger cities all over the country. This can be a good place to buy some Bitcoin and network with the community.

These are the three easy ways to buy Bitcoins in the US. Have you tried any of these? Do you know of other ways? Let me know.

Photo Credit: bfishadow

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