A quick overview of how I got started messing around with crypto currency.
Some things you should know about me. I live at best, from paycheck to paycheck. I almost never have money in savings. I know a lot about computers and the Internet. I bought my first Bitcoins at around $150 in the summer of 2013. I subsequently sold them to pay rent or bills. After that I was hooked.
So the moral of my stories is usually, "If only...sigh."
At that time it was really hard to buy and sell Bitcoin if you lived in the USA. Banks wouldn't touch it and there wasn't really anywhere you could legitimately buy, or convert your coins to dollars. You had to rely on individuals who had somehow found a way using international websites or custom software and advertised themselves on websites like Craigslist. You would go to a bank with them and then watch them transfer the coins into your wallet before you paid them. Things have gotten much better today.
I'm not going to explain what Crypto Currency (CC) is or how it works. There are plenty of websites where you can find that information.
Check out the Resources Page if you need some help getting started.
I will post links to sites that I think are useful or that I have dealt with personally from time to time.
I started learning like most people. I went to Google and I typed something like. "Bitcoin 101 the basics of crypto currency". After many hours of reading I thought I understood how Bitcoin worked in principle so I started looking at how to actually get a hold of some. The first step you will come to as a "Newbie" is the creation of a wallet. A “wallet” is basically the Bitcoin equivalent of an account I hesitate to say bank account because that's not really what a wallet is but there are similarities. A wallet allows you to receive bitcoins, store them, and then send them to other people's or your own wallets. You can have as many wallets as you want, they cost nothing to make.
There are two main types of wallets. A software wallet is one that you install on your own computer or mobile device. This gives you complete control over the security of your coins. A "non-computer" type of person especially at that time might find this too hard to setup and use. A web wallet or hosted wallet is one that is hosted by a third party. They are way easier to use, but you are trusting the provider of the service to maintain high levels of security to protect your coins, you are way less likely to get your coins hacked or stolen if you use a hardware based wallet. Today they have USB devices that will act as you wallet. Remember this was in the early days.
I was able to intially setup a wallet on my computer. Then as I read and learned more and more I ended up opening a bunch of wallets on blockchain.info. This gave me the ability to start messing around. Since I didn't have any money, I needed a way to get some Bitcoins so I turned to Google again. "How to get free Bitcoin?".
A basic search yields a variety of sites that offer to pay you small amounts of Bitcoin say, 1000 Satoshi in exchange for doing things like visiting a website for 45 seconds then clicking a captcha or looking at websites or ads, taking survey's. It seemed like the usual get something for free landscape you find in the world if Internet traffic marketing. It goes without saying there are a ton of shady sites and scam sites you come across as you explore this corner of the web.
You can find lots of sites that list these places so I started exploring them and found a few basic revenue models being packaged in a variety of ways.
The Faucet Model.
The Faucet Model works like this. You go to a web page and you do something that makes someone money like look at an ad for 45 seconds then click a captcha or view a web page. Let's say that person makes 1 cent from that ad view, they pay you a small percentage of what they are making off of you in Bitcoin like .001 cents. If you can repeat this process millions of times you can make money doing it. You can also apply this to web page views/traffic, survey's, basically anything where you can make something for getting page traffic and pay the person enough less than you are making where both sides are happy.
After a while, you quickly discover that you can earn free Bitcoins this way, but it's only a few cents for hours of work so basically not a way to make money unless you can automate and multiply your efforts. I did learn a lot! After a bunch of experimenting over a few days I had around $1.45 worth of Bitcoin. At this point I decided to try the other side of the faucet game so I Googled "free Bitcoin faucet Script" found something in PHP and setup a couple of faucets on the web. I used my $1.45 as payout money for my faucets. I decided to try the ad revenue model so I found a website that would pay me to post ads like this:
I put these ads on my faucet pages and they pay me in Bitcoins, this site is GREAT! They pay fast and consistently, I never have had any issues with them, great experience! One cool thing was that there were already a lot of sites that listed pages with faucets called faucet indexes, so you could just submit your page to those sites and get around 5000 to 10,000 unique visits a day to a faucet page without doing anything else. At this point I had a bunch of faucets on autopilot so we'll move on and come back to this later.
The Affiliate Model.
The Affilate aspect of Bitcoin has really taken off today, there are a bunch of sites that list crypto based affiliate programs. Even back then there were people who were actually making money creating Bitcoin based downlines. Here knowledge is king so the obvious tactic was to offer you a step by step guide. Ultimately for a price. This was almost always info you could find out on your own. The basics are the same in any affilate model. Find a program to rep, build a downline, etc. etc. While this is a real way to make real money, it takes a lot of effort because you basically have to mass market it full time and aggressively, just like any other affiliate program.
Down the Rabbit Hole.
The next thing I did was try to figure out how to let people give me Bitcoins. Back to Google and type "Bitcoin Donate Button". I ended up back at blockchain.info. They give you a script you can put on a web page that will allow people to donate Bitcoin to one of your wallets.
Just Google "Blockchain.info bitcoin donate button" to get the code. Make sure the data address in the script is one of your Public Bitcoin Wallet Addresses or you won't get the donations!
The button looks like this.
Please Donate To Bitcoin Address: [[address]]
The donate button was suprisingly easy to do, I had expected it to be much worse. At this point I felt pretty comfortable creating wallets and transferring small amounts between them. I was starting to see small amounts coming in from my ads. What next????
I had initially looked into mining but the investment in time and money seemed impractical. I reconsidered it but it still seemed out of my reach. I was able to find some mining coops so I experimented a little using my home PC. Again you could generate small amounts but the cost of electricity was more than what I was making in the end. Mining at that point was a full scale operation and really still is today however there some new developments recently that have made it more accesible for the average home user.
One site I found recently is jsecoin.com. They claim to have a script you can embed in a web page that mines in the background when people visit the page. They also allow mining from your home computer via a web interface. I have no idea yet if this is legit or not. More to come.
After about a month of running 6 faucet pages I had generated around $50 total in ad revenues. All I had to do was relist the pages on index sites once a week. Not bad!
I definitely can see how if you had a ton of these pages and enough traffic, you could make some actual money running faucets.
Another Model you saw out there a lot in 2013 basically amounted to a lottery or contest. You paid an entry fee in Bitcoin and someone won an amount back. There were also the usual pyramid and Ponzi schemes. I stayed away from these of course as they are legally problematic if you live in the US. Remember the IRS wasn't acknowledging Bitcoin really at this point. Recently they've created codes that tax crypto currencies like property vs a stock. There are also much better resources for buying and selling coins legitimately like gemini.com.