If you know a lot about altcoins then I suspect that pumping and daytrading those is more of a money-spinner than anything involving Bitcoin just now.
It is possible, at least in some places such as UK, to buy larger quantities of BTC on an exchange and then sell it in smaller chunks for a small profit on sites such as LocalBitcoins and Bittylicious.
You can, for example, sell BTC now on LocalBitcoins for 5% above Bitstamp and then buy it back on Bitstamp immediately, so that your BTC holdings increase.
Downsides:
- Relatively low reward. Maybe you can sell for 5% above the exchange, but there will be additional fees, possibly including transaction fees from any fiat transfers you need to do.
- Risky. Involves sending large chunks of fiat to an exchange where it probably sits waiting for you to be able to buy low, risking its total and irrecoverable loss should the exchange go under. You can't sell BTC without fiat to buy BTC so you end up keeping fiat on the exchange constantly.
- Requires some startup funds. For example, you won't be able to sell on LocalBitcoins without holding at least BTC0.4.
- Lots of identify verification. Exchanges will need to do AML/KYC checks on you, which will involve you having to send scans of identity documents and bills etc.
- Scammers. Depending on how you sell the BTC you will be exposed to a greater or lesser rate of scam attempts, but the rate will be non-zero. Even scam attempts that are unsuccessful against you personally can negatively affect you. For example, if you accept payment through online banking then someone who steals another person's online banking credentials can buy from you. Later the rightful owner of the bank account reports the fraud and your payment may be clawed back. Your bank may also take that opportunity to freeze your bank account for months while they investigate what you're doing. Rather inconvenient if it also happens to be your day to day banking facility.
None of these problems are insurmountable but for the relatively low return you may consider them an ineffective way to make money.
In a rising bitcoin economy it is likely more effective to simply sell your holdings for profit in bulk on an exchange, withdrawing all funds as soon as they no longer need to be there. However you need to actually
have holdings for that to work. The above method works best in a falling economy since it's easier to ensure you buy back at a significantly lower price than you sold for.
