Cryptocurrencies like Bitcoin, Litecoin and Ethereum which started as alternatives to world’s global payment systems have not just exceeded their expectations but have come to be a renowned medium of exchange for goods and services.
Cryptocurrencies have gone ahead to turn into tools for making money for thousands of Ugandans, with trading bitcoin being the most lucrative business so far.
Cryptocurrencies have created millionaires in Uganda and at the same time made some people lose all they had due its volatile nature.
Also read; How to start an online business in Uganda
What is cryptocurrency?
A cryptocurrency is a digital currency or an internet-based medium of exchange that is completely decentralized from government or bank control. Its decentralized nature makes it theoretically immune to the old ways of government control and interference.
Cryptocurrencies can be sent directly between two parties via the use of private and public keys. These transfers attract a very minimal processing fee which allows users to avoid high fees charged by traditional financial institutions like banks.
Some of the popular cryptocurrencies in Uganda include;
- Ether & Ethereum
- Binance Coin
So, then, what is Bitcoin?
Bitcoin has been the talk of the town for close to a decade now. However some people night be wondering what it is exactly. Well, bitcoin is a digital currency that was invented in 2009 by a pseudonym known as Satoshi Namakoto. It is the first ever digital currency that is used and distributed electronically.
There’s no physical version of the bitcoin currency, so this means all bitcoin transactions take place over the internet.
Unlike traditional physical currencies, bitcoin is decentralized meaning it is not controlled by any bank or government authority. Instead, Bitcoins uses a P2P (Peer-to-Peer) payment network that is made up of users with bitcoin accounts.
How does Bitcoin work?
In simple terms, each bitcoin is basically a computer file which is stored in a digital wallet app called a bitcoin wallet on a computer or smartphone.
People can send bitcoins (or part of one bitcoin) to your bitcoin wallet. You can too send bitcoins to other people with bitcoin wallets.
Every transaction is recorded in a public list called a blockchain. These blocks in a blockchain cannot be deleted or modified, which makes it easy to trace transactions and preventing other people from spending coins that they do not own.
Anyone can get started with bitcoin without having to first understand its technical details. Once you have a bitcoin wallet installed your phone or computer, it will automatically generate for you your first bitcoin address. You can create more these addresses whenever you need them.
You can disclose your bitcoin address to your clients or friends so that they can pay you. In fact, this is pretty similar to how email works; the only difference is Bitcoin addresses are only used once.
How can I get bitcoin?
Bitcoin can be acquired using two methods;
- Exchanging other currencies for bitcoin
- Bitcoin mining
The first method is by far the most common way of acquiring bitcoin and can be done using a Bitcoin exchange like CEX, eToro, Coinmama, Coinbase and CampBX. These exchange companies allow users to trade pounds, euros, dollars and other currencies for bitcoin.
The other method, bitcoin mining, involves setting up a computer system to solve certain math problems generated by the bitcoin network. As a bitcoin miner solves these complex problems, bitcoins are credited to the miner’s account.
This may seem an easy way to earn bitcoins, but it’s not. The bitcoin network is designed to increasingly generate more difficult and complex math problems, which ensures that new bitcoins are generated at a consistent rate.
In addition, the bitcoin software is open source which ensures that the network is not controlled by a single entity or individual.
How To Make Money With Bitcoin In Uganda
There are a number of bitcoin business opportunities that have helped create millionaires and billionaires in Uganda and around the world. These opportunities have been catalyzed by the volatile nature of bitcoin whose value rises and drops from time to time without any form of government interference but strictly by market vices that control the cryptocurrency’s value.
Here are six bitcoin business opportunities that you can exploit to make money with bitcoin in Uganda. They are:
1). Trading Bitcoin
Trading bitcoin is the most common way to make money with bitcoin in Uganda. It is more like a foreign exchange business. You could exchange bitcoin for Uganda shillings, dollars, euros, pounds and many other currencies.
Bitcoin is a very volatile currency and is far more likely to be profitable than trading traditional physical legal tenders.
People make money every day by trading the currency to people who are buying or selling with modest markups and markdowns on the value each time a transactions occurs.
2). Investing In Bitcoin
A bitcoin investment is much more like a Forex Investment. Here, you buy bitcoins at a certain value with the aim of selling it at a later time when its value has greatly risen.
People who invested money in bitcoin as early 2011 at a value of about $1 for 1BTC had their bitcoins worth thousands of dollars starting from around 2014, resulting in an interest rate of over 1,000,000%.
People who bought bitcoins around 2016 for about $1,000 per bitcoin are currently experiencing profit margins of over 1,000% as at 2020.
If you buy a bitcoin today with the sole aim of selling it in the future, you could experience a valuable revenue growth over the next years.
3). International Money Transfer
International remittance companies charge exorbitant fees to send money across countries. With bitcoin, this problem is eliminated. You can help people send money to Uganda by receiving what they want to send in a bitcoin value. Then convert the bitcoin value to Uganda shillings and hand it over to the recipient.
Here, you would slightly overstate the bitcoin value which the client would fully be aware of. The overstated value is the profit margin you would make while ensuring a seamless, cheaper and hassle-free transfer of funds from any country to your loved ones in Uganda.
4). Start a Bitcoin Exchange platform
Bitcoin exchange platforms are increasingly becoming very popular. You could mastermind a platform where people signup to buy or sell bitcoin to each other. As an owner of the platform, you could earn from the platform by collecting a certain commission on every transaction that happens through your platform.
Alternatively, you can charge a monthly subscription fee for premiums users. Premium users would pay a flat monthly subscription fee and would not give up commissions on their transactions unlike free users.
If you have the ability to pull a large traffic of bitcoin buyers and sellers, why not start such a platform and make money through bitcoin in Uganda?
5). Bitcoin Mining
Statistics show there are approximately 21 million bitcoins in the world. Just as diamond, gold, emerald and many more are mined; bitcoin is also mined, but digitally through a computer system.
For one to mine bitcoin, they have to purchase certain technical tools in form of software and hardware that are built for that specific task, and run the mining operations on several servers to increase their chances of mining more bitcoin.
If you have the financial ability to invest in bitcoin mining equipment, you could start a bitcoin mine in Uganda and make money.
6). Blockchain ICO (Initial Coin Offering) – Token business model
This is one of the latest ways to make money with bitcoin in Uganda, Kenya, Rwanda, Tanzania, Burundi, South Sudan or anywhere in the world.
In cryptocurrency, an Initial Coin Offering (ICO) is equivalent to an initial public offering (IPO). Here a company looking to raise money to start or create a new coin, app or service launches an ICO as a way to raise funds.
Interested investors can then buy into the offering and receive a new cryptocurrency token issued by the company. Basically an ICO helps people launch their own coins. The founder would own a significant amount of the cryptocurrency whose value could either grow or dwindle.
Challenges Of The Bitcoin Business
1). Bitcoins can easily be used for money laundering since there’s no real way governments and banks can monitor which transactions belong to who.
2). The bitcoin market is extremely volatile, and can either jump in value or crash anytime causing either profits or huge losses.
3). It’s extremely easy to lose your bitcoins just in case you forget your blockchain login details. If you can’t remember your account recovery details that you pre-set, your bitcoins will be permanently gone.
4). Using bitcoins for any type of transaction is not as easy as using the traditional legal tender where you can easily just pay cash. You would need to first understand how the currency works to get used to using it for different purposes.
5). Bitcoin is notorious for scams, so before using or investing in any bitcoin relate service, look for reviews from previous customers.
Also read; How To Start A Blog In Uganda And Make Money
To Sum It Up
The bitcoin business is highly volatile as its value goes up and sometimes crashes at the most unexpected times. It has however created millionaires and billionaires in Uganda and around the world. While investing in bitcoin requires an in-depth understanding of how the various bitcoin business opportunities work, mastering the bitcoin business can grow your finances beyond your expectations.
What are your thoughts on how to make money with bitcoin in Uganda? Let me know your views by leaving a comment below.