Almost everyone in the world is keen to find a way to cash in on the Bitcoin boom but usually, people only think about making money when the price of it goes up. There are in fact other ways of making money from Bitcoin, but are dividends one of them?
No, Bitcoin does not pay dividends since it is not a public company and therefore no one owns shares in it which are entitled to dividends. There are other ways in which you can get more money from holding Bitcoin such as with Hardforks.
If not dividends, how?
So as you now know, it’s impossible to receive dividends by owning Bitcoin of any amount since it isn’t a company, it’s a decentrlised, peer to peer digital asset. However, as I have mentioned already, there is another way of earning a passive income from Bitcoin.
No, I’m not talking about what you eat with. A Bitcoin Hardfork is when some people who contribute towards the network (miners) think that the future of Bitcoin should be different. What this means is that they don’t want to continue mining Bitcoin Core (the original Bitcoin), they would rather mine a new Bitcoin with slight amendments in the code.
In order for this to happen, you need to have enough Bitcoin miners with the same vision, otherwise, there wouldn’t be enough miners to support the new network.
I can hear you thinking ‘that’s cool, but how can I earn money from that?‘. Well that’s where Bitcoin comes into its own. Whenever this happens, in order to keep a stable network, all Bitcoin holders receive an amount of the new coins in ratio to their Bitcoin wallet holdings. Usually, this is 1:1 which means that you will get 1 ‘new Bitcoin‘ for every 1 Bitcoin you have in your wallet.
A popular example of this is the ‘Bitcoin Cash‘ Hardfork which took place in August 2017. The price of Bitcoin Cash (BCH) spiked to almost $4.5K in 2018 after being supported by major crypto exchanges, meaning that everyone who claimed the free coins from the Hardfork was able to cash in a lot of free money – some could say this is better than dividends.
There’s something you need to be aware of though. In order to claim free Hardfork coins, you need to have access to your private keys. One of the ways you can do this and be sure to get any Hardfork coins is by storing your Bitcoin on a Ledger Nano X. If you keep your Bitcoin(s) on an exchange, you may not be able to kee the free coins, it’s down to them whether or not they are going to support it. Usually, if the Hardfork is well-know enough, exchanges will support it, but your best bet is to store your BTC on a hardware wallet like the one I’ve mentioned above.
So now that you understand that Bitcoin doesn’t pay dividends, it shouldn’t put you off looking more into it. Here are some more of our guides on Bitcoin:
William Hurrell is a digital currency entrepreneur based in the United Kingdom who runs a digital marketing company called Black Sands Media LTD. William got his first Bitcoin in 2014 and has been involved in the industry ever since.