Cryptocurrency is a relatively new technology that has caused major disruptions in the financial, business, and software industries. Despite its usefulness, security, and authenticity, it's still volatile and some ways from mass adoption. But where some see an unstable market, others see opportunity. If you're one of those who see opportunity then read on for how you can make money from cryptocurrency.
The first and probably the most common way is by trading. Crypto traders are people who trade crypto just like stocks on exchanges. Several cryptocurrency exchanges support bitcoin (BTC) and all the major altcoins. For a list of the major exchanges visit Cryptovantage, a leading cryptocurrency knowledge resource.
To trade, you'll need a crypto wallet and some cryptocurrency to start with. There are wallets with built-in exchanges that immediately exchange your dollar for either BTC, ether, litecoin, or bitcoin cash (these are usually the most popular options). You'll also need to keep up with the latest news and happenings in the industry as trading is a day-to-day activity and small changes could cause huge waves in this volatile market. Trading also requires some level of expertise as traders employ technical analysis in their estimation and price predictions.
If you are a tech enthusiast and have a genuine love for all things blockchain, you may want to check out decentralized exchanges.
Crypto investing like regular investing involves putting money into crypto projects by buying assets i.e. cryptocurrency. Unlike traders, investors do not necessarily need as much technical analysis to make decisions. A good way investors use to select viable projects is by reading their whitepapers and then judging the viability of the project.
While a cryptocurrency trader is all about the short term gain, investors are in it for the long run, so if you decide to go this route it is advisable to invest in a project you believe in. You should monitor their progress and the market because not all projects succeed.
Recent times have brought the rise of crypto derivates like futures, ETFs, hedge funds, etc. This removes the need to possess actual assets or deal with private or public keys—for the technologically challenged. These options allow you to own crypto without actually owning coins. The companies that offer these derivatives usually hire technical and financial analysts to judge and predict the market before making moves, so investors in options have the added advantage of expertise.
HODL is a crypto lingo for saving or holding onto your currency. Usually, a coin's value could increase in value over years like what happened with bitcoin and many other altcoins. Their values more than quintupled over 11 years. During this period the market and the coins themselves had peak and down periods, but the investors who stayed and HODLed reaped amazing benefits. Imagine buying $100 worth of coins at five cents a coin and seven years down the line the value of each of those coins becomes $300—that's 600000 percent profit. HODLing and investing are all about the long game. The major difference is that you may not have to believe in the project or read their whitepaper to HODL, although HODLers are usually investors.
This is a more technical option. Cryptocurrency networks are usually decentralized, meaning they require other peoples' computers to process transactions. To decide who does this, all computers on the network race by solving a complex mathematical equation using iterations. The first computer to solve it gets to process the transactions for a block and gets rewarded with cryptocurrency. The process of solving the mathematical problem is called mining. For example, a successful miner on the bitcoin blockchain is currently paid 12.5 bitcoins—that's $125000. Mining requires a lot of power and expensive equipment.
You can make a lot of money from blogging about cryptocurrency. The technology is still relatively new and has not yet been adopted by the majority market, so a lot of people still don't understand it. A good number of these people would be happy to pay for resources that help them understand it and teach them how to profit from it.