Earning with Cryptocurrency
The cryptocurrency and blockchain industry has certainly come a long way and is continuously expanding. It is important you know that cryptocurrencies have been around since the 1980s but were referred to as cybercurrencies. The popularity of cryptocurrencies began with the launch of Bitcoin in 2009 and has witnessed a lot of growth since then. As of today, there are now over 12000 cryptocurrencies some of which include BTC, ETH, MATIC, BNB etc.
A cryptocurrency is any form of currency that exists digitally or virtually and uses cryptography to secure transactions. Most cryptocurrencies run on blockchain technology, meaning they are decentralized and not controlled by any one entity, such as a central bank or other financial institution. You must have heard a lot of success stories about how people made money from cryptocurrencies, however, cryptocurrencies come with risks so one must thread carefully and do appropriate research before investing.
There are a variety of means one can earn when it comes to cryptocurrencies. You just have to pick the strategy that works for you. Here are some ways to earn from cryptocurrencies.
- The traditional buy and hold
This long-term strategy of buying and holding crypto assets for some time is one way to earn with crypto. A point to note about cryptocurrencies is that they are incredibly volatile. If you are able to identify stable assets that have tremendous potential for long term growth, you can buy these assets for a lower price and sell them for a higher price sometime in the future.
Unlike the traditional buy and hold that is a long term strategy, trading is considered short term. Cryptocurrencies can decrease or increase dramatically within a short time therefore to trade, one must have adequate knowledge in fundamental and technical analysis to make adequate predictions. You get to trade based on your predictions and make profits off the increase or decrease of these assets.
Airdrops and free tokens are distributed to generate awareness. An exchange might do an airdrop to create a large user base for a project. Being part of an airdrop can get you a free coin that you can then use to buy things or to invest or trade. An example is 0vix Protocol that will reward early beta testers of the platform that provide valuable input during the beta phase.
Mining is an important part of the Proof of Work (PoW) consensus mechanism and is one of the oldest ways to earn money with cryptocurrencies. If you mine a cryptocurrency, you are rewarded with new coins. To mine, one need technical expertise and upfront investment in specialized hardware. Running a master node as a subset of mining. It requires expertise and significant upfront and ongoing investment.
- Social Media
This is another way to earn. A lot of blockchain-based social media platforms reward users with their native token for creating and curating content. An example of such blockchain based social media is the Bulb App. You get to earn by writing, commenting, reacting etc to content created by the community.
- Lending and borrowing
As against just holding your crypto assets in your wallet and waiting for a big pump, you can put your assets to use and earn passive income through lending and borrowing. Cryptocurrency lending involves the participation of borrowers and lenders and agreements between them. With this strategy, users can lend cryptocurrency to others and earn annual yields in return. Also, users can unlock the value of their digital assets by using it as collateral to borrow money at a specific interest rate. Cryptocurrency lending can be done with either a centralized cryptocurrency exchange or a decentralized lending application. In decentralized finance, these decentralized lending protocols eliminate the need for credit checks and enables users to borrow crypto irrespective of their location. Some decentralized lending platforms allows borrowers to switch between the variable and fixed interest rate to protect themselves from the market volatility. Examples of decentralized lending platforms include Compound Finance, Curve Finance, Balancer, MakerDAO, UniSwap and 0vix Protocol which utilizes the variable interest rate mechanism.
What are your go to ways to earn with cryptocurrency?