Some people might be asking “how to make money with cryptocurrency” other than to buy low at a low price and sell at a high price. Some time ago, my brother told me about a former coursemate who raised enough money to relocate to Canada through Cryptocurrency! How did he do that?
Well, it’s no big deal… He simply invested his savings into crypto assets over some period of time, and before we knew it, he had enough money to fund his relocation plans.
Truth is, in the past few years, many persons all over the world have made good money from crypto assets, and you too can! Although you may not be seeking to relocate from your country, you can make money trading cryptocurrency.
This article will be guiding you step by step on how to make as much money as you need trading cryptocurrency.
Let’s get going!
What is Cryptocurrency?
Before we go any further, it is necessary to specify what we mean by cryptocurrency. So, what is cryptocurrency?
Investopedia defines Cryptocurrency as a digital or virtual currency that is secured by cryptography, which makes it nearly impossible to counterfeit or double-spend.
Forbes simply defined cryptocurrency as a decentralized digital money based on blockchain technology.
So, from the above definitions, we can conclude that a cryptocurrency is a digital currency that could be used to make payments online. This digital currency is based on a technology known as blockchain.
What is Blockchain Technology?
Blockchain technology is a decentralized distributed ledger that records the history or movement of digital assets. They are also known as Distributed Ledger Technology (DLT).
By design, the data contained in a blockchain cannot be altered or modified. This makes it very effective for managing payments, security, or other sensitive systems.
How Do Cryptocurrencies Work?
Cryptocurrencies use decentralized technology known as blockchain to let users make secure payments and store money without having to use their name or make use of a bank. This blockchain technology maintains a record of all transactions done by currency holders.
New units of cryptocurrency are created via a process popularly known as Crypto Mining. It involves the use of superior computing power to solve intricate Math problems that generate new cryptocurrency.
An alternative way to acquiring new coins is by buying from cryptocurrency brokers, and then store them in cryptographic wallets.
However, unlike physical money, no central authority manages them or determines their value per time. The community of online users manages it and determines its value per time via the operation of Market Forces.
Common Types of Cryptocurrency
According to CoinMarketCap.com, there are over 10,000 types of cryptocurrencies that are currently being traded publicly. However, most of these are unknown and may not be the best option for you, if what you seek is to make money trading crypto assets.
We will be reviewing some of the most popular and most profitable cryptocurrencies available out there.
Let’s go!
Bitcoins
Naturally, the first name that comes to mind when we talk about cryptocurrency is Bitcoin. Probably because it’s the oldest cryptocurrency available out there. It was created by Satoshi Nakamoto, in 2009.
Although it struggled to gain general acceptance in its early days, today many organizations including fortune 500 organizations now accept Bitcoins as payments for their products.
Over the years, the value of bitcoins has increased a lot, considering that just five years ago they sold for about $426. As I type this now, the current value of bitcoins is $38,918.
At this point, it will not come as a surprise if you are already calculating how much you would have made if you invested in Bitcoins in 2016! And yes, you are already learning how to make money by investing in cryptocurrency.
However, like most commodities influenced by market forces, the value of bitcoins has experienced lots of highs and lows. As of January 2021, it traded at $42,000, but today (3 June 2021), it is valued at $38, 918.
Ethereum
Ethereum was first proposed by Buterin Vitalik in 2013. Its development began in 2014, and it was crowdfunded. Ethereum launched in 2015 with an initial supply of 72 million coins, on the 30 of July 2015.
Ether is the currency token used in the Ethereum blockchain. It is the second most popular and valuable cryptocurrency all over the world.
In 2016, Ethereum faced a major hack that cost them $50 million worth of Ethereum! This led to the Ethereum community voting unanimously to redress the theft by a process known as “hard fork” in the blockchain industry.
A hard fork refers to a change in the rules of a validation process such that the software validating according to the old rules will see the blocks produced according to the new rules as invalid.
Litecoin
Lite coin has a lot in common with Bitcoin. However, it has a few more innovations than Bitcoin, such as faster payments, and processes that make it easier to conduct more transactions than Bitcoins. It was launched in 2011.
XRP
It was launched in 2012 by Ripple Labs. Ripple can be used for tracking different kinds of transactions, including non-crypto transactions. It is another fairly popular cryptocurrency.
DogeCoin
It was created by Billy Markus and Jackson Palmer in 2013, as a joke on Bitcoins. They were seeking to create a peer-to-peer digital currency that would reach a higher number of persons than Bitcoin.
It was officially launched on 6 December 2013.
However, a few years after its launch, it made very slow progress compared to Bitcoins. But with the recent interest of Elon Musk in the Doge coin, this digital currency has experienced a surge in public interest and acquisition.
How to Make Money with Cryptocurrency
Making money via cryptocurrency is not as complicated as some may expect. It is quite easy and straightforward. Below are a few ways that several persons have applied in the past to make cool money via cryptocurrency.
- Buy and Hold Crypto Assets.
- Trading Cryptocurrency/Assets.
- Crypto Mining.
- Crypto Staking.
- Work for Cryptocurrency companies.
Buy and Hold Crypto Assets
The Buying and Holding method date back to the earliest forms of investment. This method is not unique to making money via Crypto Assets. On the contrary, it is a method that can be used to make money in nearly any type of investment.
How does this method work?
In this method, you buy Crypto Assets (at a lower price) and wait for the value to increase before selling to make profits.
Since the value of Crypto Assets is subject to market forces, the price for crypto assets is sure to go up and down every now and then. You can use this fluctuation to your advantage, by buying Crypto Assets and holding them till their price increases, and then sell at a profit.
For instance, in 2016, a Bitcoin cost just $426, but as of January 2021, it was going for $42,000! Imagine if you had bought just 5 bitcoins then, they will be worth $210,000 in 2021.
That is how the buying and holding method works!
Trading Cryptocurrency/Assets
Trading Crypto Assets or currency is very similar to the buying and holding method. The major difference, however, is that while the buying and holding model is a long-term strategy, the trading cryptocurrency is a short-term strategy.
So, what does it mean to trade cryptocurrency or assets?
Trading Cryptocurrency simply refers to buying cryptocurrencies at a lower price and selling them as soon as the price increases. It also refers to short selling or taking up a short position in the Cryptocurrency market.
What is short selling?
Short selling refers to when a cryptocurrency trader or investor borrows some cryptocurrency to sell at the current market price because she believes that the current value of that cryptocurrency is about to drop.
When the value of the cryptocurrency drops as projected, the trader buys back what was borrowed at a lower price and returns it. Therefore, making a profit.
These are the major activities to trading cryptocurrency or assets. However, it is necessary to point out that these activities are oversimplified to help you get a grasp of the possibilities that exist in cryptocurrency trading.
Of course, trading cryptocurrency is much more complicated than it has been presented here. It requires a lot of knowledge and skill to make a profit from it. If you are interested in trading cryptocurrency, you can go online to search for videos, books, and articles to guide you. You will find several helpful videos on YouTube.
Crypto Mining
If you are not familiar with the cryptocurrency space, chances are that you will be seeing this word for the very first time. So, what does crypto mining refer to?
Crypto mining is a process that if completed successfully, could generate new crypto coins for you. However, unlike the mining of mineral resources, it does not require excavating the soil. It is done using high-capacity computers.
In cryptocurrency mining, miners use high-tech performance computers to solve complex mathematical equations (cryptographic equations) and recording transactional data to a blockchain.
The first person or group to complete the recording of a specific group of data on a blockchain is rewarded with newly minted cryptocurrency. Bitcoin operates this way.
As you may have guessed, the process of mining cryptocurrency is quite complex and requires high-tech gadgets. If you do not consider yourself to be tech-savvy, crypto mining may not be an ideal option for you.
However, if you are interested in this process, you can research further details on how to mine crypto and give it a shot.
Related Article: How to Invest in Agriculture in Nigeria?
Crypto Staking
Binance, a Cryptocurrency exchange platform describes Crypto Staking as holding funds in a cryptocurrency wallet to support the security and operation of a blockchain network. This act is often rewarded.
Crypto Staking can be done directly from some crypto wallets, such as Trust Wallet. However, several exchanges offer Crypto Staking services to their users. With Binance Staking, you can simply earn rewards, just by holding your coins in the exchange.
To learn more about Crypto Staking, visit https://academy.binance.com/en/articles/what-is-staking.
Work for Companies in The Cryptocurrency Industry
What better way to get cryptocurrency than work for companies in the cryptocurrency industry?
Several organizations in this industry pay their staff in cryptocurrency, for performing professional tasks that you too can perform.
All you need do is identify the skills these organizations seek, learn them and demonstrate your skills to them. They will be eager to bring you onboard if your skills match their needs.
What’s more, most of these jobs are Remote based, so you can perform them from anywhere in the world.
Below are some organizations that pay their staff in cryptocurrency:
- Angle.co
- XBTFreelancer
- JobsforBitcoin
- Coinality, etc.
Of course, these are just a few of the several organizations that pay their staff in cryptocurrency. You will discover more with a little more research.
Conclusion
So, these are a few of the tested and trusted ways to make money with Cryptocurrency. As you will appreciate, these methods are more complex than was presented here.
This article is directed at introducing these methods and giving you a general understanding of what each entails. Feel free to conduct further research on any of the methods discussed here, to broaden your knowledge on it.
To your success as you proceed to make money with Cryptocurrency!
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