Now there are many different ways that you can earn from cryptocurrency. Each of them brings profit in its own amount and at its own time. If you want to explore the world of cryptocurrencies and how to make money with them, we will tell you everything.
Mining
Cryptocurrency mining is a process that ensures network performance. For the successful completion of this task, miners receive a reward in the form of cryptocurrency. Miners use powerful equipment to work. You can set it up at home or rent a separate room for this. The better the equipment and rooms, the more you can earn.
There are several types of mining. For each of them, the equipment may be different. The most popular type of mining is mining on a video card. A complex of video cards (farms) is used for it. 1 farm consists of 6 - 8 video cards. The cost of one such video card can be $1,000 - $2,000. A more powerful farm requires more video cards (starting from 8). On average, 2 - 3 farms are used for home mining; 5 farms are required for large-scale mining. If you are reading this and wondering how quickly this investment will pay back, there is no definitive answer. A lot depends on the type of mining, cryptocurrency and its position on the market. In general, the expenses are paid back in 10 - 12 months. However, there are cases when this happens after several months or, on the contrary, after several years.
The situation in the cryptocurrency market is variable: some crypto can jump and bring a big profit (as happened once with Bitcoin), and some will sag or completely leave mining. An example is the transition of Ethereum to the Proof of Stake algorithm (The Merge). This cryptocurrency was transferred to a different principle of operation and it is no longer possible to mine it.
Mining itself is a simple process. You will have to take care only of the purchase of equipment and provision of rooms.
How to start mining?
1. Buy and set up the equipment;
2. Register a wallet to which you will withdraw profit;
3. Register in the pool (in the network) of the currency you want to mine;
4. Process cryptocurrency transfers and create blocks;
5. Get a reward in the crypt;
6. Withdraw your income. Any.Cash is perfect for this, as there you can withdraw funds to the auto-converted addresses.
Trading
Cryptocurrency trading is a buying and selling process. Its main point is to buy digital currency cheaper and sell it more expensively. Crypto traders (those who trade) make a profit from the difference between buying/selling. To make money, you need to wait until the value of cryptocurrency increases and sell it. Of course, the higher the price, the greater the crypto trader's income. Before starting trading, you should assess the market itself and define which cryptocurrencies are the most "trending". It is worth remembering that the exchange rate of cryptocurrencies is constantly changing, and even in one day it can grow several tens or hundreds of times. But the opposite side can also occur, when the exchange rate sags a lot. Therefore, we recommend not to start trading with a large amount at once. Even a start of $5 - $10 can eventually bring you from $10,000 in 2 - 3 months of active and dense trading.
In their work, cryptotraders conclude short-, medium- and long-term contracts (short-term – within a day, medium-term – within a week, long-term – within a month). The entire buying and selling process takes place on special platforms - cryptocurrency exchanges. In order to choose an exchange for cryptocurrency trading, you need to pay attention to:
- The size of the exchange. After all, the more people trade on it, the more stable it is.
- Transaction fees. Of course, the higher the fee, the more you will need to pay for each new transaction.
- Withdrawal limits. Check the exchange's daily and monthly withdrawal limits to understand how much you can withdraw per day/month.
Trading takes a lot of time if you are serious about it. It is necessary to understand the details of trading and constantly monitor changes on the cryptocurrency market. At the same time, it does not require large investments; you decide for yourself with what amount you want to start trading. Before starting cryptocurrency trading, you need to buy this cryptocurrency and put it on the exchange. To get introduced to crypto, we recommend starting with stablecoins (for example, USDT). You can buy USDT in Any.Cash in the 📊Exchange section → 📈Buy. It is enough to have any fiat funds or cryptocurrency in the account that can be exchanged for USDT.
Staking
Cryptocurrency staking is ensuring the functionality of the blockchain by storing cryptocurrency in a wallet. You must have a cryptowallet with this cryptocurrency and a configured server (a home PC is good for that) that will process blockchain transactions. The wallet serves as a guarantee that you will not cheat the network. For this whole process, the network pays you a reward in the amount of a percentage of the coins in the wallet. It's like a bank investment, where you deposit funds and withdraw more after a certain period of time. And the bigger the initial investment (the more you put into the account), the more you can get back. It is impossible to know in advance the exact profit from staking. This indicator depends on the initial investment amount (deposit amount), the cryptocurrency itself and what is happening with it on the market. On average, the profit can be from 5% and up to 15% per year. But, as with all ways of making money on cryptocurrency, staking can also face risks of losing everything if the crypto sags in the market. The easiest way to start staking is to use a staking pool. Most often, it is an exchange or a specialized service.
There are two most popular staking options: locked staking and flexible staking. Locked staking allows you to transfer cryptocurrency for storage for a specific period. For example, if the deadline is 60 days, but you choose to withdraw your deposit early (even if you withdraw after 59 days), then all profit accrued during this period is lost. This method of staking is good because it often has a high percentage. This will allow you to get more profit.
Flexible staking is, let's say, the opposite of locked staking. Here, you do not specify an end date for storing cryptocurrency, and you can withdraw funds along with profit at any time. Flexible staking allows you to freely manage assets and withdraw from the account at any convenient time.
Staking is a great way to make passive income that doesn't require large investments, special equipment, or deep knowledge in crypto.
Long-term investment
Long-term cryptocurrency investment is the purchase of digital currency for the long term with its further growth. One of the successful examples of such investment is Bitcoin. People who bought BTC as soon as it came out made very big profits a few years later. But Bitcoin is not the only currency you can invest in. To understand which cryptocurrency you should choose, pay attention to how long it has been on the market, how many owners it has, how much 1 coin is worth, and how the price of this crypto has changed recently. At the same time, it is not necessary to invest in one digital currency; you can distribute funds between several. Again, keep in mind that over a long period of time any crypto can sag, grow, sag again, and grow again.
Choosing a cryptocurrency for long-term investment is half the work. Now you need to find a place where your funds will be safely stored. The simplest and most obvious is a digital (crypto) wallet. You don't have to go far - in Any.Cash you have the opportunity to buy and store crypto.
At first glance, long-term investing seems like a fairly simple way. In fact, it is, because you simply buy crypto, store it in your wallet and wait for it to grow. The difficulty is that it is impossible to predict how long you have to wait: several months or several years.
Farming
Farming is a process where you lend your crypto assets. They are placed in a liquidity pool (i.e. storage). It is necessary to place a trading pair in the pool - two coins of the same amount. Take the ETH/DAI pair as an example. Let's say 1 DAI = $1 and 1 ETH = $100. Now for each coin in the pool to be $1,000 (approximately), it is necessary to place 1,000 DAI and 10 ETH. And now your $2,000 is already in the pool. Users (traders) buy or sell coins in the pool where you hold your assets. For each such operation, they pay a fee. You, in turn, receive a percentage of this amount. Your reward (percentage) depends on your share and how full the liquidity pool is. If new members are added to the pool, your percentage decreases; if someone leaves the pool, it increases. And in the case of a share - if you contributed $2,000 to the pool, and someone contributed $4,000, then the higher percentage will go to the one who contributed more. Thus, with the help of farming, you can earn from 5% and up to 10% to several hundred % per year.
How to start farming?
1. Choose a site for farming;
2. Choose a currency pair;
3. Connect your wallet to the platform;
4. Deposit the appropriate number of coins (two coins for the same amount);
5. Get profit to the account for each transaction.
As with any other way of earning money on crypto, farming also has risks that the exchange rate will fall very much, this, in turn, will affect the profit.
ICO/IDO
ICO (Initial Coin Offering) is the initial sale of coins. In other words, it is selling coins before they appear on exchanges. The company issues its own cryptocurrency and distributes it to investors. Traders and/or investors buy these coins, thus investing in the project at an early stage to further develop the company.
How to buy tokens during ICO?
1. Register on the project website;
2. Buy Bitcoin or Ethereum. Why these cryptocurrencies? BTC is accepted almost everywhere; regarding ETH - many large ICOs are conducted precisely on the Ethereum platform;
3. Put your BTC or ETH into a secure wallet that you can manage. If it is an Ethereum wallet, it must support ERC20 tokens;
4. On the website of the selected project, a BTC or ETH address will be provided, to which it will be enough to transfer the desired amount, i.e. buy ICO tokens;
5. You will then receive the tokens to your wallet address.
After that, work with these tokens can be done in two ways:
- You can keep them.
- You can engage in trading and sell coins at a higher price. However, it is necessary to choose an exchange for trading these coins in advance. Some tokens may not be used for trading on a particular exchange.
ICO has both pros and cons.
Cons: unsecured investments, as the founders of the company can close the project before the release of coins.
Pros: if the project is high-quality, there is a possibility of earning from 2x to 400x from the initial investments.
IDO (Initial DEX Offering) is an initial offer on the exchange. Here, the sale of coins takes place at the same time as the listing (launch of cryptocurrency).
The most popular way to participate in IDO is to get on the whitelist. To begin with, it is enough to choose a site. The leaders of the IDO field are DAO Maker and Polkastarter; the young Seedify platform is also becoming popular. On any of these platforms, you need to select a future IDO, and then apply for whitelisting. After that, it is enough to verify your identity. The team of your chosen project will process the requests and randomly select the whitelist winners. The results are published on various communication channels, so we recommend you to subscribe to these channels.
Conclusion
Regardless of which way you choose to earn money, you should always remember that the cryptocurrency market is still actively developing. There is no single most effective way to earn money on crypto. Everyone has their pros and cons. Pay attention to promising currency, try to assess potential risks and minimize them.
