The Five Best Ways To Make Money With Cryptocurrency
- Lydia Iseh, at Freelance Writer
- 18.01.2022 09:45 am #cryptocurrency
People are always looking for ways to make some extra cash. Even if you are wealthy, you can always use some more money, right? Thanks to the digital age, there are many ways you can make money.
Investing and trading with cryptocurrency is one way to expand your financial portfolio. Indeed, there are some risks involved, like with every investment. But there are tremendous benefits too, especially if you know what to do.
This article discusses five of the best ways to make money with cryptocurrency. Also, you will learn about the various types of cryptocurrencies in the market.
What is cryptocurrency?
Before you learn how to make money with cryptocurrency, you need a little background into what cryptocurrency is all about. What is cryptocurrency?
Cryptocurrency is a virtual or digital currency secured by cryptography. This means that the money becomes nearly impossible to counterfeit or double-spend. Most of the cryptocurrencies are decentralized networks based on blockchain technology.
Because any central authority does not issue them, they are more or less immune to government manipulation and interference. Additionally, you can make online payments with cryptocurrency without involving third parties.
You can trace the history of cryptocurrencies back to the 1980s. As of then, they were called cyber currencies. However, they started gaining popularity and recognition in 2008 when an anonymous programmer, under the name of Satoshi Nakamoto, introduced Bitcoin (BTC).
In the 1980s, an American cryptographer named David Chaum invented digital cash. This digital cash relied on cryptography to secure and verify transactions. It was from here that Satoshi Nakamoto got the inspiration for Bitcoin.
Since then, cryptocurrencies have grown, and there has been the development of many more types other than Bitcoin.
Five ways to make money with cryptocurrency
There are very many ways you can make money with cryptocurrency today. However, these are the five best ways to make more money with crypto.
Buy and hold
Buying and holding cryptocurrency could be very risky but rewarding. It involves you getting crypto assets of your choice from a crypto exchange. Then when the prices drop, you purchase more. This is traditionally known as “buying the dip.”
Then after some months or even years, you could then sell the assets at a relatively higher price than the purchased price. Simply put, the buy-and-hold method of making money with cryptocurrency involves you buying assets at a particular price, then holding them till their value rises. Then, once the value increases, you sell it at a profit.
You have to be very careful when choosing which crypto assets you want to use for this long-term investment. Therefore, you have to ensure the crypto assets can stand the test of time.
You can read the white paper for the coin before deciding which cryptocurrency you will use for the investment. For instance, crypto-assets like Bitcoin and Ethereum show a long-term price increase and can be considered a safer choice for this strategy.
If you do not know where or how to buy crypto assets, Moonpay, a cryptocurrency software, guides you on how to buy Tether and other types of cryptocurrencies.
Earn dividends on your crypto
A great way to make more money with cryptocurrency is by earning dividends. Dividends are those small cash payouts that a company gives to shareholders. The dividends in cryptocurrency are very similar to when you invest in stocks or bonds.
When a cryptocurrency platform turns out its profit for a quarter of the year (it could be an annual affair), it will divide the profits and give them to the shareholders. The payout from the platform may not be huge, but it can be a great way to earn extra money.
You should know that the profits will not be cash but crypto tokens. First, however, you must research which crypto platforms pay dividends and which do not. Also, you should confirm if the pay is worth anything to you.
Examples of cryptocurrencies that pay dividends include:
Komodo
AscendEX
NAV Coin
NEO
PIVX
Neblio
Reddcoin
Run cryptocurrency master nodes
One surefire way of making money with cryptocurrency is by running cryptocurrency master nodes. So what is a crypto master node? Crypto master nodes keep track of blockchains in real-time and help to sustain cryptocurrencies.
A blockchain is a system where a record of transactions made in cryptocurrency is managed across several computers. Because most cryptocurrencies pay the node operators to help them maintain a record of their activities on the native blockchains, you can make money with crypto.
The master node process could be complex, and it requires the person to maintain a certain minimum number of coins under their master nodes. Examples of crypto platforms that operate master nodes include DASH.
The primary duties of the master node include:
Saving, validating, and announcing valid transactions to other nodes
Ensuring smooth protocol operations in the blockchain
Governing voting events
Maintaining the ledger of public transactions in a given cryptocurrency
Verifying new transactions
Trading cryptocurrency
Most times, people use trading and investing interchangeably when discussing cryptocurrency. However, you should know that there is a difference between the two terms. This difference is usually in their durations.
On the one hand, traders are looking to make their profits relatively quicker. But, on the other hand, investors may only make a few changes to their portfolio per annum. In other words, while investing is a long-term thing, trading uses short-term opportunities.
Day trading is a type of trading from which you can make money. Day traders buy and sell their crypto assets within the same day. This is for them to get profit quickly. However, this strategy is usually risky because it’s not easy to determine the cryptocurrency value at any given day or time.
Luckily, it is possible to buy and sell crypto daily via online brokerage platforms. This will help you monitor and take advantage of the fluctuations. Then, you will walk away with your money.
Accept cryptocurrency as one of your payment methods
As a business owner, you can incorporate cryptocurrencies as part of your payment methods. This is a quick and easy way to make more money with crypto.
There are times when customers will want to pay you for your products and services using cryptocurrencies. But because you do not recognize crypto as a mode of payment, you discourage their patronage.
Including cryptocurrency in your payment method not only widens your reach but also makes the transaction more accessible to customers that do not have bank accounts or credit cards. Fortunately, it is very straightforward to start receiving payments with crypto like BTC.
It is essential to identify which channel will be best for you to accept cryptocurrency payments. A few you can start with include:
CoinBank
SpectroCoin
BitPay
CoinGate
Paxful Pay
Common types of cryptocurrency
Long gone are when there were only a few types of cryptocurrencies. However, when people mention cryptocurrencies, they only think about Bitcoin. Meanwhile, there are several other options for cryptocurrencies. Below are the most common types of cryptocurrencies.
Bitcoin (BTC)
Bitcoin is the first decentralized cryptocurrency that uses blockchain technology to enable payments and other digital transactions. Also, Bitcoin’s blockchain acts as a public ledger, which allows an individual to prove that they own the Bitcoin they are using or trying to use. This helps to prevent fraud and other forms of tampering.
Ethereum (ETH)
Ethereum is the second-largest cryptocurrency platform in the crypto market. This system lets you use ether, the currency, to perform several functions. Furthermore, Ethereum uses blockchain technology to allow the creation of smart contracts. This means the software does not need to be distributed on app exchanges.
Binance Coin (BNB)
The Binance Coin is available on the Binance cryptocurrency platform. You can use BNB as a currency, and it also allows tokens to be used to pay fees on the Binance exchange. In addition, you can also use these tokens to power Binance’s decentralized exchange (DEX) for building apps.
Tether (USDT)
Tether’s price is $1 per coin because it is a stablecoin. Stablecoins are tied to the value of a particular asset. For example, Tether is tied to the value of the US Dollar.
This cryptocurrency is usually used as a medium when traders want to move from one type of cryptocurrency to the other. Tether combines the benefits of a cryptocurrency with the stability of a currency issued by the government.
Dogecoin (DOGE)
Dogecoin was created as a joke because of the many speculations on the internet about cryptocurrencies. However, it has since skyrocketed and made a name for itself.
Unlike many other digital currencies, Dogecoin does not limit the number of coins in existence; it has unlimited issuance. Therefore, you can use this cryptocurrency for making payments or sending money.
Conclusion
Cryptocurrency is worth investing in if you’re looking to make more money. This article has addressed the best ways you can make money with cryptocurrency. When you follow one, two, or all five of these methods of making money with crypto, you can be confident that you will have much more money than you do now.
