I know so many people still have so many questions about cryptocurrency and how to make money from cryptocurrency. The stories surrounding cryptocurrencies are governed by so many truths and myths that confuse people. This post is simply to clear all the necessary doubts and tell you the best ways to earn with cryptocurrency.
When most people hear cryptocurrency, they think of bitcoin. However, bitcoin is just one out of thousands of cryptocurrencies in the world.
However, in a layman definition, cryptocurrency means digital assets transferable as a medium of exchange. One of the striking advantage of this type of currency is its decentralized nature – Meaning that its not subject to a central nor government authority for manipulation.
In addition, the popularity to cryptocurrency is because of the anonymity it confers to its users. This simply means that transaction identity is not captured after transaction has been made.
Also, cryptocurrency is one the volatile markets in the world. In other words, the price of cryptocurrency continuously change over time due to the demand and supply. Therefore, this is the reason why it appears as if it is a get rich quick scheme because it can make you a million a night. On the contrary, cryptocurrency can also bankrupt you over night.
Hence, if you are thinking of ways to make money from cryptocurrency, make sure you are good at risk management. Also, work under the direct inspection of a crypto analyst or professional for a proper direction and mentoring.
In that regards, i will introduce you to the possible ways to make money with cryptocurrency in this post. These methods have been used by so many and proven to be lucrative as far as cryptocurrency is concerned, they are;
Miners are simply those who use their computer power to confirm bitcoin transactions on blockchain and are rewarded for their work with bitcoins. They do this by solving a mathematical equation or puzzle called hashing.
Hashing is a way to secure the cryptocurrency world and keep it safe from fraudster. That is to say that any transaction that is not confirmed by miners can be tagged as fraud. In other words, miners are the security to the blockchain. They do this by preventing it from being abused by a group of powerful people – this is the idea of the decentralized nature of cryptocurrency.
However, to be successful in mining, your computer should have a good and strong VGA, good processing speed and also a steady power supply. In addition, you will need extra hardware such as ASIC and GPUs plus. Other possible way is to join a mining group as an investor and earn monthly or weekly commissions. But, be careful since most fraudsters parade themselves as bitcoin mining teams.
Recently, Cryptocurrency was divided into two tiers, they are;
- The miners and the ordinary users
This simply means that, just as the miners who are paid for their services in the blockchain, masternodes also receive money for helping to maintain the network. They do this by maintaining the Proof-of-Stake projects for block verification. The miners sometimes earn 45%, Masternodes same 45% and others get 10% for every successful block solved.
However, to participate as a masternode, you must have a collateral or an initial stake. Example, the Dash coin requires 1,000 Dash to be staked in other to participate as a masternode. These special nodes get compensated by sharing in the block reward because they provide special services to the network. Additionally, masternodes perform advanced functions for the network beyond the mere sending of transactions.
Notwithstanding, the Masternodes pay the masternode owner Return On Investment for the services they render. Dash for example pays an annual ROI of 8.3% while some other crypto networks can pay as high as 20% ROI.
Dash masternode was a big success that many people who participated in made millions of dollars.
Apart from Dash, there are up to 300 other networks that offers masternode, some of these networks includes PIVX, Crown, ExclusiveCoin, and Helium.
Cryptocurrency affiliate marketing
Crypto affiliate marketing is another way to earn money with cryptocurrency. Crypto Affiliate marketing simply means earning money for redirecting people from your website, youtube channel or social media to a crypto platform. Therefore, to be a crypto affiliate marketer, you will have to create good contents about crypto currency that can drive the necessary traffic.
There are so many ways to generate traffic for affiliate marketing.
Read also: How to make money with Affiliate marketing
The websites offer services such as buying and selling of crypto currencies, trading, e.t.c. Therefore, they give some commission to marketers that brings customers to their site through a link.
Some of the websites that pays for cryptocurrency affiliate marketing includes; Paxful, Cryptohopper, Bybit e.t.c.
Participating in Airdrops
Every new cryptocurrency network needs to create awareness about their coin. One of the effective ways they do this is by distributing the coins freely to individuals who will help them advertise the product. As a result, the quantity of free airdrops one gets depends on their participation in helping the company spread the news such as social media or by referrals.
Trust me, some people have actually made money through airdrops without investing any dime. Most people get 1000, 2000 coins or more from an airdrop. Consequently, they can sell these coins if it becomes listed on an exchange website. For example, if you have 1000 coins of a coin from airdrop and the coin rise to just $1 – it means you are $1000 richer.
Initial Coin Offering (ICOs)
An Initial Coin Offering (ICO) is just like supporting a business financially because you believe it will do well from the business plan. Meaning that ICO is a way crypto companies raise funds from the public to fund their project and rewards the sponsors in coins.
However, these coins are bought at very cheap price from the company as stocks and sold at higher price when the ICO is over and it starts selling on trade platforms. As a result, the company will provide the road map, the duration of the ICO, its potential, how long it will last, the total money they wish to generate e.t.c. If however, the money raised is not enough for the project within the time-frame, they refund the money to the investors and tag the project unsuccessful.
ICO have made so many people extremely rich in the cryptosphere. This is because any token is always sold higher after the ICO, some coins can give more than 1000% ROI. However, the risk in ICO is that there are many scam projects that just come to collect people’s money and disappear.
A crypto currency trading is just like the Forex trading where you buy a currency (coin) and resell. Also, you earn from predicting if the coin will appreciate or depreciate (Short & Long trading). But, this part of making money from cryptocurrency requires expertise in two different aspects.
- Learning how to execute a trade and appropriate exchange platforms
- Knowing the right coin to trade through analysis and other methods
Simply put, if you miss any single detail in any of the above 2 points, it will cost you money.
For that reason, you will have to give in to learning the trading techniques and terms before venturing into trading. Though, it can take you time to master the skill but the stress is worth it.
On the contrary, You can choose to just learn the basics of trading and depend on experts for the analysis and signals. This is the category that most traders belong because it is easier.
There are different forms of cryptocurrency trading which includes;
- Day Trading
- Swing Trading
- Short term trading
- Long term trading
This is another way of making money online that requires a skill in writing computer programmes. Nevertheless, the cryptocurrency world is a vast one and new blockchain developers are hot cakes. Since the advent of Ethereum as the first programmable cryptocurrency, many people have ventured into learning blockchain Developing.
Having said that, there are so many opportunities to learn blockchain from the scratch without even being a computer scientist. In other words, there are so many Free online learning websites where you can take a course on blockchain Developing, Such as Udacity.
Crypto HODL is a slang in cryptocurrency that simply means holding a coin for a long time before selling. This way of making money from cryptocurrency is only effective if you have a concrete conviction that the token you are HODLing has a very good potential of increasing in market value later.
However, HODLing is like an investment, so the money you use to stake a coin is stuck while you wait for it to appreciate. But, what if then the coin depreciate? – You simply loose. So, make sure that you HODL a coin that have a good reputation and not just any coin.
E.g. Bitcoin in 2009 was below $200 but was later sold at $20,000 in 2017. A man by name Kristoffer Koch bought 5,000 bitcoins at $26.60 in 2009. If he sold it in late 2017 when it peaked $20,000, he will be having $4 Million with just $26.6.
Take Home Summary
Cryptosphere is massive and there are so many ways to make money from cryptocurrency. However, you will have to trade with caution when you choose to start any of the mentioned means of earning money through crypto. In other words, do an underground research and make sure you are working with the right source. Secondly, Never venture into crypto currency because of the hype or peer pressure,make sure you learn before you invest.
If you are just curious to learning how to make online, you can also read our post on Best ways to Make Money Online From Home.