There are many ways to make money from the cryptocurrency markets. Not only does this include buying and Holding digital currencies in the conventional sense but also via staking, interest accounts, airdrops, play to earn games, and more.
people making millions of dollars by getting in early and selling when the prices are high. Or perhaps you have friends who make a steady income by mining cryptocurrency.
Everyone gets into the cryptocurrency field to make money, but not all end up doing that. A lot of people either simply give up along the way, or lose money because they do not properly understand how to make money with cryptocurrency.
The cryptocurrency industry is still in its early stages of development. As the crypto assets increase in price, more people come into the industry. These newcomers are always trying to figure out how to make money from cryptocurrency.
The good news is there are many ways of making money with cryptocurrency. Since 2011 there has been consistent growth in developer activity, social media activity, and the number of start ups created in the cryptocurrency industry.
Here we take a closer look at how to make money with cryptocurrency.
- The Basics about Cryptocurrency
Cryptocurrencies are increasingly popular alternatives for online payments. Before converting real dollars, euros, pounds, or other traditional currencies into ₿ (the symbol for Bitcoin, the most popular cryptocurrency), you should understand what cryptocurrencies are, what the risks are in using cryptocurrencies, and how to protect your investment.
- What is cryptocurrency?
A cryptocurrency is a digital currency, which is an alternative form of payment created using encryption algorithms. The use of encryption technologies means that cryptocurrencies function both as a currency and as a virtual accounting system. To use cryptocurrencies, you need a cryptocurrency wallet.
These wallets can be software that is a cloud-based service or is stored on your computer or on your mobile device. The wallets are the tool through which you store your encryption keys that confirm your identity and link to your cryptocurrency.
- What are the risks to using cryptocurrency?
Cryptocurrencies are still relatively new, and the market for these digital currencies is very volatile. Since cryptocurrencies don't need banks or any other third party to regulate them; they tend to be uninsured and are hard to convert into a form of tangible currency (such as US dollars or euros.)
In addition, since cryptocurrencies are technology based intangible assets, they can be hacked like any other intangible technology asset. Finally, since you store your cryptocurrencies in a digital wallet, if you lose your wallet (or access to it or to wallet backups), you have lost your entire cryptocurrency investment.
Table of Content
- Learn The Basics Of Cryptocurrency
- What is Cryptocurrency? And Risk Of Investing in Cryptocurrency.
- How To Create Wealth And Earn Big Money By Trading And Investing In Cryptocurrency?
- The Best Online Platforms And Exchanges to Start Investing and Trading In Cryptocurrency
- Mining
- Work for a Cryptocurrency Company
- Staking and Lending
- Airdrops, Cryptocurrency Tokens Deposited Into Your Wallet for Free
- Trading
- Buy and Hold (Investing)
- Crypto Yield Farming and Lending: Generate an Attractive APY on Your Cryptocurrencies
- Affiliate Programs: Get Paid to Refer a Friend
- Play to Earn Crypto Games: Earn Rewards for Playing Crypto Games
- Investing in Promising New Coins Early: Overall Best Way to Make Money With Cryptocurrency
- Mine Cryptocurrency by Connecting Hardware to Your Desktop Device
- The best ways to make money with cryptocurrency is through mining. In a nutshell, mining refers to the process of connecting specialist hardware to a desktop device, which, in turn, connects to the blockchain of the respective cryptocurrency. The idea is that miners enable the network to operate in a decentralized manner.
- This is because transactions are validated when the mining equipment solves complex mathematical equations. And in return, miners are rewarded with newly minted cryptocurrency tokens that enter into circulation, and each block is verified. For instance, in the case of Bitcoin, a new block is created every 10 minutes, and this mints an additional 6.25 BTC.
- This 6.25 BTC which as of writing is worth over $660,000, is paid to the miner that successfully solved the equation for the respective block. Although at first glance this translates into a significant amount of money, Bitcoin mining consumes an unprecedented amount of electricity due to the complex nature of each mathematical equation.
- Moreover, the amount of specialist hardware required to stand a chance of mining a new Bitcoin block is also considerable in dollar terms. With that said, there are many other cryptocurrency projects that require miners and in many cases, competition is thin on the ground. Ultimately, you just need to ensure that the mining rewards you receive are worth more than you invest.
2. Work for a Cryptocurrency Company
- As crypto has expanded into the mainstream consciousness, so has the opportunity to work in the crypto industry. You could work for any of the hundreds of cryptocurrencies themselves, or for other companies or industries looking to take advantage of the crypto boom. In addition to developers, crypto companies need to hire for all the other roles of a growing business, including marketing, human resources, and cyber security.
- Coinality
- jobsforBitcoin
- Coinworker
3. Staking and Lending
- Staking is a way of validating crypto transactions. If you are staking, you own coins but you don’t spend them. Instead, you lock the coins in a cryptocurrency 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.
- You can also choose to lend coins to other investors and generate interest on that loan. Many platforms facilitate crypto lending.
- To learn more about lending crypto, check our guide to lending crypto.
4. Airdrops Cryptocurrency Tokens Deposited Into Your Wallet for Free
- In a similar nature to faucets, airdrops allow you to earn free cryptocurrency tokens without needing to deposit or spend any money. The main concept here is that some newly launched projects will distribute their native tokens directly into people’s wallets as a means to enter the cryptocurrency into circulation.
- This is as opposed to a conventional presale and fair launch directly onto a cryptocurrency exchange. And as such, the project will not raise any funds when they initiate an airdrop. Although this might sound too good to be true, there are numerous examples of airdrops that have since gone on to become multi-billion dollar projects.
- A prime example of this is Bitcoin Cash. When this digital currency was launched in 2017, it airdropped its BCH tokens to all wallet addresses that were in possession of Bitcoin. This was done on a 1:1 basis meaning that for every 1 Bitcoin owned, you would have received 1 Bitcoin Cash.
- In another example, popular cryptocurrency Stellar has airdropped millions of dollars of Lumens tokens since the project was launched in 2014. On the other hand, you do need to tread with caution when receiving an airdropped token. This is because scammers will often create and distribute a worthless token to random wallet addresses with pump and dump intentions.
5. Trading
- While investing is a long term endeavor based on the buy and hold strategy, trading is meant to exploit short term opportunities.
- 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.
6. Buy and Hold (Investing)
- This is the most common way of earning money from cryptocurrencies. Most investors buy coins such as Bitcoin, Litecoin, Ethereum, Ripple, and more and wait until their value rises. Once their market prices rise, they sell at a profit.
- This investing strategy requires one to identify more stable and volatile assets that can shift in value rapidly, resulting in regular profits. Assets such as Bitcoin and Ethereum have been known to maintain regular price fluctuations; they can, therefore, be considered a safe investment in this regard. However, you’re welcome to trade any asset you feel is going to rise in value; all you need to do is to analyze each asset you invest in before committing to Holding it.
- Also, you don’t need to buy the most expensive assets for you to make profits. There are thousands of small altcoins that have decent price shifts; consider having a mix of all coins that have a promising future value and are not just popular in the exchanges.
7. Crypto Yield Farming and Lending, Generate an Attractive APY on Your Cryptocurrencies
- Another beginner free way to make money with cryptocurrency right now is via yield farming and lending. Although both of these investment concepts allow you to earn interest passively, they actually refer to slightly different methods. First and foremost, crypto yield farming refers to the process of lending your idle tokens to a liquidity pool.
- In the vast majority of cases, you will be providing much needed liquidity to decentralized exchanges. Some of the leaders in this market include Pancakeswap and Uniswap on the Binance and Ethereum blockchain networks, respectively. When you deposit funds into a liquidity pool, it is often locked away for a minimum amount of time.
- And, for as long as the tokens are in the liquidity pool, you will be paid a rate of interest. In many cases, the newer and less liquid that a cryptocurrency is, the higher the respective APY offered by the pool. When it comes to crypto lending, this refers to the same concept that we discussed earlier insofar that you will deposit your digital tokens into a savings account.
- And in doing so, your tokens will be lent to those that wish to borrow funds. When engaging in crypto lending, it is important that you choose your preferred platform wisely. This is because you always run the risk of borrowers defaulting.
8. Affiliate Programs: Get Paid to Refer a Friend
- There are many crypto affiliate programs that pay you for referring new users to their platform.
- Affiliate programs are free to join. once you create an account, you’ll be given a special unique link. You can start sharing the link however you‘d like on social media, websites, blog, and forums. Whenever a person signs up or makes a purchase using your link, you will receive a commission.
- The biggest advantage is that it’s quick to start and begin earning money. Plus, money would keep coming in days, weeks and months, even years after you put in all that effort.
- If you already run a blog or website or have a huge following on social media, affiliate programs can be a great way to make some good passive income!
9. Play to Earn Crypto Games: Earn Rewards for Playing Crypto Games
- When thinking about how to make money on cryptocurrency, you might be surprised to learn that this can be done by playing games. Make no mistake about it the play to earn crypto game marketplace is now worth billions of dollars. There are many variations and types of titles in this space, albeit, perhaps one of the best crypto games to consider playing is Decentraland.
- Put simply, Decentraland offers a metaverse that enables players from all over the world to create a virtual avatar, chat with other people, and most pertinently buy plots of land. Once you have purchased a plot of land and built your own real estate project, this is then represented in the form of a unique NFT.
- Then, you can sell your real estate NFT in the open market. Although this concept might sound farfetched, some plots of land in the Decentraland metaverse have sold for millions of dollars.
10. Investing in Promising New Coins Early, Overall Best Way to Make Money With Cryptocurrency
- The overall best way to make money with cryptocurrency is to invest in the best altcoins as early as possible. After all, had you invested in Bitcoin when the digital currency was first launched in 2009, you would have paid a tiny fraction of one cent. Similarly, Ethereum was trading at just $0.75 per token when its token was released in 2015.
- Both of the aforementioned projects are now worth thousands of dollars and have subsequently generated significant returns.
- One new altcoin that is attracting a lot of attention is Tamadoge (TAMA), a meme coin that promises real value and utility to holders through NFT ownership and a fun play to earn game.
- The TAMA beta presale has already sold out its early allocation and continues to draw huge interest on social media, while there is now a massive giveaway coming that promises to be one of the best and biggest crypto airdrops of 2022.
- Another recent example is Battle Infinity, which is one project that has been attracting attention from both mainstream media outlets and social media channels. This crypto gaming platform offers a unique blend of play to earn (P2E) mechanics and NFT integration all within a vibrant virtual world.
- As one of the best play to earn games set to launch this year, Battle Infinity enables players to generate rewards through skilled gameplay.
- One of the most appealing ways players can generate rewards is through Battle Infinity’s fantasy sports feature, which structures all in game players as NFTs. Not only can players earn $IBAT for placing high in the league, but they can also benefit from value increases in their players, which are driven by real-world performances.
Best Crypto Exchanges and Investing Platforms
Here is our list of the 10 best cryptocurrency exchanges and investing or trading platforms. The cyrpto offers that appear on this site are from companies from which The College Investor receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). The College Investor does not include all cryptocurrency exchanges or all crypto offers available in the marketplace.
1. Gemini
2. Uphold
3. Coinbase
4. Binance
5. Kraken
6. Bitstamp
7. eToro
8. Bitcoin IRA
9. Crypto.com
10. BlockFi