Maybe you are like most who have been delaying their journey on how to start making money with Cryptocurrency for one reason or the other. This is 2020 and it is time to start without any excuses. For most people the excuse has always been I don’t know anything about cryptocurrency so I can’t invest where I have zero knowledge.
Well, that is a good enough reason, but what if I can walk you through the foundation of cryptocurrency in a few lines? What if I tell you that it is not rocket science and that you can understand it right now and start making money with it right away? Would you grab the opportunity?
Briefly, what is cryptocurrency? Cryptocurrency is decentralized digital money that’s based on blockchain technology. You may be familiar with the most popular versions, Bitcoin and Ethereum, but there are more than 5,000 different cryptocurrencies in circulation.
Cryptocurrency operates on a blockchain, the digital ledger of cryptocurrency transactions, ensuring that the same coin is never used twice. Transactions are processed on a blockchain network made up of thousands of machines, and in return for the efforts of these machines, owners can earn cryptocurrencies.
New coins are ‘mined’ (that is, minted or created) as computers interpret complex mathematical intricacies to define the legitimacy of a transaction on the blockchain.
While many people pay for their purchases in cryptocurrency, it is more broadly an investment form that drives entire sites that track the value of one Bitcoin.
Using exchange or bitcoin wallet apps like Binance, Remitano, Crypto.com, Coinbase, Coinmarketcap, and BlockFi, users convert dollars into crypto and rely on an increase in the value of their investment, just like stocks.
It is not too late to start your journey in making money with cryptocurrency. The good news is that the cryptocurrency industry is still in its early stages of development. As the crypto-assets increase in price, more people come into the industry. These newcomers are always trying to figure out how to make money with cryptocurrency.
So How Can you Make Money with Cryptocurrency?
The good news is there are many ways of making money with cryptocurrency. Since 2012 there has been consistent growth in developer activity, social media activity, and the number of start-ups created in the cryptocurrency industry.
Here we take a closer look at how to make money with cryptocurrency.
If you are wondering how to make money with cryptocurrency, look no further! Strategies for making money with crypto rely on three mechanisms:
Firstly, you can invest or trade in the crypto exchange market. You can do this without owning any crypto yourself, like investing in gold on the stock market.
Secondly, you can use the coin you already own to stake and lend coins to the system or other users.
Thirdly, you can participate in the blockchain system by mining or receiving coin rewards for work done in the system.
Based on these three mechanisms, here are the six strategies for making money with cryptocurrency:
- Staking and Lending
- Crypto Social Media
- Airdrops and Forks
Now, let look at them one after the other. My favorite among the six ways you can start making money with cryptocurrency is number 5.
Investing in Crypto
This involves buying and holding crypto, and the keyword here is long-term. Investing is the long-term strategy of buying and holding crypto assets for some time. Crypto assets are generally well suited to a buy-and-hold strategy. They are extremely volatile in the short term but have tremendous long-term potential for growth.
The investing strategy requires you to identify more stable assets that will be around for the long term. Assets such as Bitcoin and Ethereum have been known to show a long-term price increase and can be considered a safe investment in this regard.
Unlike Investment that has the keyword, long-term, trading is mainly for the short-term.
The crypto market is volatile. This means the prices of assets can increase and decrease in price dramatically over the short term.
To be a successful trader, you need to have the proper analytical and technical skills. You’ll need to analyze market charts on the performance of the listed assets so that you can make accurate predictions about price increases and decreases.
When trading, you can either take a long or short position, depending on whether you expect the price of an asset to rise or fall. This means you can make a profit regardless of whether the crypto market is bullish or bearish.
Another Way to Make Money with Cryptocurrency is Staking and Lending
Staking is a way of validating crypto transactions. If you are staking, you own coins but you don’t spend them. Instead, you lock the coins in a cryptocurrency wallet. A Proof of Stake network then uses your coins to validate transactions. You receive rewards for doing so. In essence, you are lending coins to the network. This allows the network to maintain its security and verify transactions. The reward you receive is similar to the interest a bank would pay you for a credit balance.
The Proof of Stake algorithm chooses transaction validators based on the number of coins you have committed to stake. This makes it’s much more energy-efficient than crypto mining and does not require you to own expensive hardware.
Crypto Social Media
Multiple blockchain-based social media platforms will reward you for creating and curating content. You are often rewarded with the native coin of the platform.
My Favourite Way of Making Money with Cryptocurrency is Mining
Cryptocurrency mining is how to make money with cryptocurrency like the original pioneers. Mining is still a crucial component of the Proof of Work mechanism. It is where the value of a cryptocurrency is generated.
If you mine a cryptocurrency, you are rewarded with new coins. To mine, you need technical expertise and upfront investment in specialized hardware.
Running a master node as a subset of mining. It requires expertise and significant upfront and ongoing investment.
Airdrops and free tokens are distributed to generate awareness. An exchange might do an airdrop to create a large user base for a project. Being part of an airdrop can get you a free coin that you can then use to buy things or to invest or trade.
A blockchain forks because of changes or upgrades in a protocol that create new coins. If you hold coins on the original chain, you will typically get free tokens on the new network. This means you get a free coin because you were in the right place at the right time.