Cryptocurrency is an encrypted data string that denotes a unit of virtual or digital currency. It is monitored and organized by a peer-to-peer network called a blockchain, which also serves as a secure ledger of transactions, e.g., buying, selling, and transferring. One of the most important reasons why cryptos are flourishing that it is nearly impossible to counterfeit or double spend, this is because it has a unique set of complex intricacies to be solved in a block for every transaction. Check udemy clone app – Expert Plus LMS. Cryptocurrency is a tradable digital asset that is decentralized, which means it is not own owned or controlled by any person or group or even government. So, it doesn’t have a central issuing or regulating authority, instead using a decentralized system to record transactions and issue new units.
There are thousands of crypto currencies available in the market some well know examples are Bitcoin, Dogecoin, Shiba inu and Ether. People who believe in the potential of digital currencies mine or invest in cryptocurrencies by foreseeing the high returns they can make in the near future. Is it too late to invest in crypto’s? No! Better late than never! Here are some major ways to make money using cryptos! They are Mining, Investing, Trading, Affiliate programs, Staking and lending, Crypto social media and airdrops and forks.
- Crypto mining: Mining is the process which generates new crypto coins and verifies new transactions. This process involves vast networks of computers around the world to verify and secure the blockchains (a ledger to record all the cryptocurrency transactions). Mining is the only process in which new crypto coins enter the market. Two decades ago, around 2009, we could have mined crypto from our home but as time passed the block chain has grown and now it required 12 trillion times more computing power in 2019, according to a survey report. Virtually all mining is now done by specialized companies or groups of people who band their resources together. Bitcoin mining is a lot like running a big data centre. Companies purchase the mining hardware and pay for the electricity required to keep it running (and cool). For this to be profitable, the value of the earned coins has to be higher than the cost to mine those coins. If you are curious how you would go about mining Bitcoin for example, the first thing to note is that for mining BTC, your only option is to buy a Bitcoin mining machine, i.e., an Application-Specific Integrated Circuit device, commonly referred to as an ASIC.
- Staking: Staking is the simplest way to earn money from cryptos. It usually involves holding cryptocurrency in an account and letting it collect interest and fees as those funds are committed to blockchain validators (A blockchain validator is someone who is responsible for verifying transactions on a blockchain). When blockchain validators facilitate transactions, the fees generated go, in part, to stakeholders. This type of hold-for-interest has become so popular that mainstream crypto dealers like Coinbase/ Binance/ TFX/Tradestation (secure online platforms for buying, selling, transferring, and storing cryptocurrency) offer it. Some tokens, such as the very stable USDC offer about .15 percent annual interest rates (not too different from putting your money in a bank in a low-interest checking account), while other digital currencies might earn you 5 or 6 percent a year. Some services require staking to lock up funds for a certain period of time (meaning you can’t deposit and withdraw whenever you want) and may require a minimum amount to draw interest.
- Yield Farming: Yield farming is a little more complicated, but not that different than staking. Yield farmers add funds to liquidity pools, often by pairing more than one type of token at a time. For instance, a liquidity pool that pairs the Raydium token with USDC might create a combined token that can yield a 54 percent APR (annual percentage rate). That seems absurdly high, and it gets stranger: Some newer, extremely volatile tokens might be part of yield farms that offer hundreds of percent APR and 10,000 to 20,000 APY. The rewards, which add up 24/7, are usually paid out as crypto tokens that can be harvested. Those harvested coins can be invested back into the liquidity pool and added to the yield farm for bigger and faster rewards, or can be withdrawn and converted to cash.
- Investing in cryptos: Investing cryptos are also known as HODLing ( acronym for Hold For Dear Life). This is the most common way of earning money from cryptocurrencies. Most investors buy coins such as Bitcoin, Litecoin, Ethereum, Ripple, and more and wait until their value rises. Once their market prices rise, they sell at a profit. This investing strategy requires one to identify more stable and volatile assets that can shift in value rapidly, resulting in regular profits. Assets such as Bitcoin and Ethereum have been known to maintain regular price fluctuations; they can, therefore, be considered a safe investment in this regard. However, you’re welcome to trade any asset you feel is going to rise in value; all you need to do is to analyze each asset you invest in before committing to HODLing it. Also, you don’t need to buy the most expensive assets for you to make profits. There are thousands of small altcoins that have decent price shifts; consider having a mix of all coins that have a promising future value and are not just popular in the exchanges. For example, safe wallet like CoinMarketCap is a platform to HODL your cryptos safe and secure.
- Crypto Trading: Similar to the mainstream trading of equities and commodities, trading of cryptocurrencies is one more way to reap money from cryptocurrencies by making use of the market fluctuations (Buying when the market is down and selling them at a higher rate later). The act of speculating on cryptocurrency price movements via a contract for difference (CFD) trading account, or buying and selling the underlying coins via an exchange is known as cryptocurrency or crypto trading.
- Affiliate Programs: Similar to Amazon affiliate program, Bitcoin and crypto affiliate programs offer a powerful way to monetize your crypto specific audience. Whether you run a popular blog, news website, YouTube channel, or Twitter account, crypto affiliate programs can bring in a recurring revenue stream that can be relied on for months and sometimes years to come. Some of the renowned platforms that provide these affiliate programs are Binance, CoinLedger, CoinBase.
- Crypto Airdrops: The airdrop is a promotional activity typically performed by blockchain-based start-ups to help bootstrap a virtual currency project. Its aim is to spread awareness about the cryptocurrency project and to get more people trading in it when it lists on an exchange as an initial coin offering (ICO). Airdrops are generally promoted on the company’s website, as well as on cryptocurrency forums, and the coins or tokens are sent only to current holders of crypto wallets, usually those of bitcoin or ethereum. To qualify for the free gift, a recipient may need to hold a minimum quantity of the crypto coins in their wallet. Alternatively, they may need to perform a certain task, such as posting about the currency on a social media forum, connecting with a particular member of the blockchain project, or writing a blog post.
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