Part 2: Making money through Cryptocurrency
If you don't know what cryptocurrency is , you can learn this here.
There are 6 ways you can make money through cryptocurrency. These are:
Staking and Lending
Crypto Social Media
Airdrops and Forks
Investing is the long-term strategy of buying and holding crypto assets for some time. Crypto is probably best suited to this method of buying and holding. They are extremely volatile in the short term but have tremendous long-term potential for growth.
The investing strategy requires you to identify more stable assets that will be around for the long term. Assets such as Bitcoin and Ethereum have been known to show a long-term price increase and can be considered a safe investment in this regard.
While investing is a long-term endeavor based on the buy-and-hold strategy, trading is meant to exploit short-term opportunities. This can be compared to 'day trading' of stocks.
The crypto market is volatile. This means the prices of assets can increase and decrease in price dramatically over the short term. To be a successful trader, you need to have the proper analytical and technical skills. You’ll need to analyze market charts on the performance of the listed assets so that you can make accurate predictions about price increases and decreases. When trading, you can either take a long or short position, depending on whether you expect the price of an asset to rise or fall. This means you can make a profit regardless of whether the crypto market is bullish or bearish.
Staking is a way of validating crypto transactions. If you are staking, you own coins but you don’t spend them. Instead, you would lock coins in to your wallet. A Proof of Stake network then uses your coins to validate transactions. You receive rewards for doing so. In essence, you are lending coins to the network. This allows the network to maintain its security and verify transactions. The reward you receive is similar to the interest a bank would pay you for a credit balance. The Proof of Stake algorithm chooses transaction validators based on the number of coins you have committed to stake. This makes it’s much more energy-efficient than crypto mining and does not require you to own expensive hardware.
Multiple blockchain-based social media platforms will reward you for creating and curating content. You are often rewarded with the native coin of the platform.
Cryptocurrency mining is how to earn money with cryptocurrency like the original pioneers. Mining is still a crucial component of the Proof of Work mechanism. It is where the value of a cryptocurrency is generated. If you mine a cryptocurrency, you are rewarded with new coins. To mine, you 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.
Airdrops and Force:
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. A blockchain forks because of changes or upgrades in a protocol that create new coins. If you hold coins on the original chain, you will typically get free tokens on the new network. This means you get a free coin because you were in the right place at the right time.