Welcome To Day 1 Of Our 5-Day Series On Earning Digital Currency. |
If you’re interested in learning about bitcoin—and you want to start earning digital currency without spending actual dollars to get it—you’re not alone. According to a Pew Research Center survey in 2022, 17% of U.S. adults have used cryptocurrency in some way, including 13% of lower income households, generally defined as less than $38,900 per year. Not everyone who is interested in bitcoin is a wealthy investor.
So, take a deep breath and acknowledge the fact that owning bitcoin (or any digital asset) won’t necessarily make you rich. More realistically, bitcoin can be another tool that you use to manage your overall financial portfolio, just like a checkbook or a budgeting app.
Owning bitcoin is about being your own bank, with irreversible transactions and an emphasis on self-custody, rather than relying on custodians like banks or PayPal, it can feel intimidating at times. If you’ve started playing around with a crypto exchange like Coinbase or Binance, this course is a great way to take the next step toward protecting your wealth.
Over the next five days, this newsletter will share Forbes’ expert contributor tips on the best ways for beginners to get started earning modest amounts of bitcoin, including the use of digital wallets, social media options, tax tips and the long-term outlook for the bitcoin ecosystem. We think this course is best-suited for creator economy workers, freelancers, independent contractors and anyone who is self-employed or earns non-standard compensation. |
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| Here are some questions to ask yourself and help you get started on your bitcoin journey: |
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 | How do I want to use my bitcoin? |
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| Do I want to keep it saved in my own wallet as bitcoin, or quickly cash it out as dollars to help pay bills and cover routine expenses? (This will help determine which wallet apps best suit your needs, more on that below.) |
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| Am I interested in growing my personal brand in the bitcoin space, so that clients and supporters with bitcoin can learn about my work? |
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Be patient as you get started. Consider your work-life balance, your own technical skillset and your existing professional network, as well as your personal values.
Remember, bitcoin is just digital money. Earning bitcoin will be a lot like any other type of freelance work or fundraising project. Simply having a wallet address and a desire to get involved with the bitcoin ecosystem does not mean you'll make money. You have to earn bitcoin, just like any other type of money.
You may be able to persuade some of your long-standing freelance clients to switch to paying you in bitcoin. Let people who already pay you directly for services know that, in addition to Venmo or PayPal or whatever you already use, you will also accept bitcoin measured by the daily market price. |
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| Get A Notebook And Download Wallet Options |
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Yes, you’re going to write down your private keys—the passwords that will safeguard your bitcoin—on actual paper. Eventually, you’ll want to have multiple physical copies of your private keys in different locations. If you lose your private keys, the bitcoin in that wallet will be lost forever. It’s OK if that seems scary. You can start with a custodial service, like Cash App, until you’re ready to put money into a wallet with private keys written on paper, if you prefer.
We’re going to practice with a few mobile wallet apps like Wallet of Satoshi, Strike or Muun, and we’ll explore how a custodial wallet is different from a self-custody wallet later. For now, it’s enough to download at least two to three different types of bitcoin wallets and play around with setting them up. |
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| Talk To Your Tax Professional |
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| When you’re ready to tackle the freelance aspect, CPA Sean Stein Smith recommends these next steps: |
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| Work with a tax professional familiar with the crypto sector. |
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| Keep track of your own bitcoin transactions. Your accountant will need thorough records. |
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| Remember, no matter what you label an incoming bitcoin payment in your personal records, the IRS will treat it as compensation and tax it accordingly. |
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| Working with an accountant you trust is the most important part of earning bitcoin as freelance income, including social media tips. If you keep detailed records from the beginning, you’re less likely to be overwhelmed or surprised when it comes time to report this extra income, no matter how modest it might be. |
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| Don’t Confuse Bitcoin With Tokens |
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There are thousands of cryptocurrencies, so don’t try to work with all of them at once. Start by understanding the three basic crypto categories: bitcoin, stablecoins and tokens (also called altcoins). These digital assets have different properties and risks.
As for bitcoin, the two biggest risks are price volatility and human error related to self-custody. Most cryptocurrency exchanges will allow users to turn bitcoin into fiat, so there is little liquidity risk. In contrast, many tokens and stablecoins can only be redeemed for dollars or euros on specific exchanges. All cryptocurrencies, even so-called stablecoins, have some amount of volatility risk, meaning you could lose dollar-value based on market fluctuations. For this reason, beginners might choose to start with bitcoin, which has the world’s largest user base and most accessible liquidity compared to any other digital asset. |
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| “Bitcoin should be compared not to penny stocks or scams but to traditional assets like FAANG stocks, bonds and gold.” | | Susie Violet Ward Director of Mining and Sustainability at Bitcoin Policy UK |
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That’s all from us today. Tomorrow, we'll share tips and tricks for getting started with bitcoin wallets.
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