How you can make money with cryptocurrency
Cryptocurrency has become a part of our lives in unprecedented ways. And while most people have heard of cryptocurrency like Bitcoin, many people don’t understand how it works or how you can leverage it as an investment. Since Satoshi Nakamoto started the Bitcoin and published his Bitcoin whitepaper, cryptocurrency has skyrocketed.
To the average consumer, investing in crypto like Bitcoin might seem impossible—especially when the current value of a single Bitcoin is over $33,000. And yet, in 2017, the third highest Google search term was “how to buy BTC.” Although early gains of crypto have already been established, crypto is still fairly new and in its initial stages. With that in mind, now is a better time than ever to get your foot in the door. Here are a few ways you start making money with cryptocurrency:
Traditional investment strategy
As it goes, the buy and hold strategy works fairly well with cryptocurrency. With this strategy, you buy and hold your assets as an investor. This goes for any type of cryptocurrency that you invest in. One thing you need to know is that the crypto market is extremely volatile. Expect major price swings that aren’t as common in the traditional currency market. Allow your currency to mature and act rationally when major moments of change happen.
It’s also important that you diversify your crypto portfolio. Case in point: traditional investors don’t put all their eggs into one basket. They have diverse portfolios and take positions in multiple types of stock and investment. Do the same with your crypto portfolio, researching multiple types of crypto and keeping up to date with their trends and progression.
Lastly, a general rule of thumb is to always use a separate email account with two-factor authentication when investing and maneuvering crypto transactions. Hacking attempts are at an all-time high and the last thing you need is to lose your hard earned investments because of a simple security mistake.
Adopt new crypto technology
One thing that Bitcoin has taught us is that early investors, users, and adopters do well in due time, mainly because cryptocurrency is a volatile market—it might not do well short term, but it can have tremendous gain if you play a long-term game. There are plenty of types of cryptocurrency out there aside from Bitcoin—and some currencies have even surpassed Bitcoin in terms of gains. Other crypto technology worth investing in include Ripple, Ethereum, and EOS.
You should also look into cryptocurrency that shows room for potential but isn’t yet profitable. For example, Pi is a cryptocurrency started by Stanford graduates that allows users to mine for Pi using just their smartphone. After one year on the market, it already had 500,000 users. After two years, it has over 10 million members and small purchases have been made using Pi during a pilot program. Pi is able to secure its ledger by allowing members to vouch for each other and creating security circles. Today, Pi is worth $0—just as Bitcoin was when it first launched.
Start mining
Mining allows you to earn cryptocurrency without having to pay money for it. Mining is one of the oldest ways to make money with crypto and remains a crucial component of the crypto infrastructure. If you want to go all the way, you can partake in Bitcoin mining yourself. Companies like Bitfury produce and sell Bitcoin mining technology to help companies take the DIY route.
But how does mining work, exactly? The job of a miner is to verify crypto transactions, ultimately strengthening the blockchain the currency is built upon. In the case of Bitcoin, verifying transactions helps prevent double spending and keeps users honest. Once a miner has verified one megabyte of transactions (known as a block), and can verify that they are the first to arrive at the right answer for a numeric problem, they are rewarded with Bitcoin.
But don’t let that confuse you; there’s no complex computation or high-level math involved in “finding the right answer first.” Essentially, you are trying to come up with a 64-digit numerical “hash.”You can mine with automatic problems, but you’ll need serious computing power. Use this helpful calculator from Cryptocompare to see how your computing power stacks up. If you don’t have the computing power yourself, you can join one of many mining pools and split the rewards of your collective power.
