Cryptocurrency has had quite the journey so far. It started out as a novel idea that only a few people believed in.
Now, cryptocurrency assets are used around the world and are more famous than they’ve ever been. A big part of this fame is thanks to the money investors are making from digital assets.
Tokens like Bitcoin have outperformed legacy assets like stocks and gold and every other day, there is a headline of tokens making 100 times their initial value. If you’re looking to make money from crypto, consider the following ways:
Trade Speculatively
This is perhaps the most common way that people make money from cryptocurrency. It involves buying cryptocurrencies when they are at a certain price and reselling them when they hit a higher price point.
It’s simple in concept but a bit more complicated in practice. First, you will have to look into various resources to determine the best crypto to buy based on their potential to increase in price.
The market can see prolonged periods of downturn and some people even hold tokens for years before they sell them.
However, if you’re able to find the right token at the right time, you could make several times your initial investment once you offload them. Most speculative traders buy their tokens from exchanges, peer-to-peer platforms, and so on.
Mine Tokens
Another way to make money from cryptocurrency is by mining tokens. Mining is the process through which cryptocurrencies based on a proof-of-work system come into existence. It basically involves using special computer equipment to solve mathematical puzzles that confirm transactions on the blockchain.
For each block of transactions that are confirmed, a certain amount of tokens are released. The key is to mind the tokens and sell them when their price increases.
It’s also important to keep costs low as crypto mining is a very energy-intensive task. Mining tokens can be done individually or through a mining pool that shares responsibilities and rewards.
Alternatively, you can pay mining companies to acquire the tokens for you in exchange for a fee. But if you can keep your mining costs lower than the token value, it can be very profitable.
Stake Tokens
As we’ve explained, crypto based on a proof-of-work blockchain has to be mined. However, tokens based on a proof-of-stake blockchain can be staked to earn interest.
Staking essentially means committing your tokens to the blockchain for a certain amount of time to help confirm transactions.
In return, you get a certain percentage of your initial amount back as interest. Staking is a very low-risk and low-effort way to earn cryptocurrency, though it does take some time.
Many major exchanges allow users to stake tokens and there are also staking pools available. Anyone who is risk-averse or simply wants an easier way to earn cryptocurrency should consider staking.
Play-to-Earn Games
Cryptocurrency has a bigger presence in the gaming industry these days, and this has led to the rise of play-to-earn games.
As the name would suggest, these games reward players with cryptocurrency for completing challenges. In the case of tap-to-earn games, you literally only have to tap on your phone screen to earn cryptocurrency.
Anyone who’s already interested in gaming would benefit from these as you are essentially paid to have fun.
Making the most of play-to-earn games would require a bit of research to find the games that give you the most value for your time and effort and also avoid any scams within the industry.
The good news, however, is that play-to-earn games are abundant these days.
Lotteries and Airdrops
Another way to acquire cryptocurrency is through lotteries and airdrops. Several lotteries have popped up that allow people to win cryptocurrency periodically.
They follow the same principle as a typical lottery, which is that you pay a certain amount of money to join and the winner is picked.
There are even no-loss lotteries that stake the amount contributed, give the interest to the winner, and return all the non-winners deposits.
Airdrops take place all the time from different crypto projects and essentially involve giving away crypto for free to community members.
Some airdrops require winners to complete certain steps and some are completely random. Either way, they allow people to get cryptocurrency for free.
Conclusion
The crypto industry has so many ways for investors to profit and as we’ve explained above, there’s an option for all levels of risk tolerance and personality types.
There is staking for those who want to earn crypto in a low-effort way, speculative trading that is the most popular, play-to-earn games that appeal to gamers, lotteries for those looking to try their luck, and everything in between.
Whatever option you choose, make sure to do your research to avoid losing your funds or wasting your time.
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