Cryptocurrencies - How to make money on them? This question is quite often asked by novices. Here are some ways to invest and disqualifying various types of financial pyramids, MLMs and many other scams.
The easiest way to get a crypto is to buy it. For example, if you were to lose the $250 on a suspicious investment platform offering a "super" trading bot, it would be much better if you bought the crypto for your own account with this money. Try to avoid the wide arc of companies that are trying to defraud you under the pretext of high return on investment. These kinds of promises are just empty words. No "revolutionary" software will make you a millionaire overnight.
If the idea of investing in pseudo-cryptocurrency software based on multi-level marketing has crossed your mind, try to get rid of it. Such decisions may cost you a lot. In this case, the risk of losing your money is very high: what if you find yourself in the last level of financial pyramid or give your money to brokers who do not intend to return it to you? It will be quite difficult to recover the money, especially if the company suddenly disappears from the market without a trace... Such stories have already happened.
So if you would like to invest in cryptocurrencies, don't use intermediates who claim to multiply your capital. Choose a reputable exchange and make purchase by yourself. Remember, however, that such assets are very unstable. Price fluctuations depend on many factors. So it is worth approaching the market with a ready investment strategy. However, if you are a completely new in this area and you do not really know where to start, focus on education. Get reliable sources of information, because the safety of your cryptocurrencies will depend on it: you need to know how to store them and which wallet to choose. Avoid pseudo-experts who can trap you.
Crypto investors can be divided into two basic groups: long-term and short-term. The first ones buy a given coin in the long run, counting on its growth in the future. The others focus on short-term trading: they buy them in the low level, and after reaching a certain value, they sell them.
Remember, cryptocurrencies do not give you any guarantee of profit. Only invest the money you are able to lose!
When investing in the cryptomarket, deposit threshold is very low. You do not have to buy the whole cryptocurrency. You can buy a small part of it to slowly gain experience. If you want to experiment, it is better to do it on small amounts.
Read also: How to recognize shitcoin?
Airdrops and fauctes
The good news is that you don't have to go deep water right away. When learning about the market, you can use the so-called faucets or receive aidrops.
These are sources of free coins. You can receive fractions of cryptoes in the faucets. However, this is only fun, not large amounts. For example, Bitcoin is divided into eight decimal digits. Small parts of BTC are called satoshi. 1 satoshi is currently 0.00009 USD - less than a cent. On the relevant pages you can receive a certain amount of such fractions every 15 minutes. Of course, you will not collect a large amount of money this way, but it may be your first contact with the cryptocurrencies. For some people it's a waste of time, for others it's great fun!
The second option are aidrops. What are they? Well, it's a form of bonus or gift from a given project. User can receive a certain amount of cryptocurrency completely free of charge in exchange for doing small activities: registering on the platform, social media activity, or taking part in competitions. However, all this depends on the individual approach of the company, as it sets the rules. For the company, it may be a way to broaden the group of stakeholders. Although it happened that projects were giving coins unexpectedly distributed to people who had their coins in their wallets, usually most companies inform about a free airdrop in order to attract new users.
Remember that not every cryptocurrency or token will become a second Bitcoin. There are many projects on the market. Some of them, however, have no value...
Note: Cryptocurrency faucets and airdrops should be free of charge, if a website asks you to deposit a certain amount of money so that you can claim your prize, it may be a fraud!
A good way to get cryptocurrency or a token is through creative invention. You've certainly heard of the Steemit platform! Its phenomenon is that content that reaches the audience's taste is rewarded. Every user can cast their vote for someone.
If your publications become quite popular, you will be rewarded with a Steem coin. However, this works both ways. If people don't like your article, they can give it a negative vote, which will deprive you of a given amount of accumulated coins. The advantage of this platform is undoubtedly transparency. Any author can check who voted for whom.
Registration for Steemit is free, but account verification takes up to 2 weeks. For immediate access, an additional fee can be paid.
Another option to get cryptocurrencies is to mine them. However, this process is an investment. To be able to dig, you must have the right equipment. But that's not all, as it's not enough to plug in the excavator and wait for it to mine Bitcoins. The profitability of this process is influenced by many factors such as the price of electricity, the current crypto price, power of the excavator, the cost of cooling the equipment, the reward for the excavated block and many other things.
Miners very often join mining pools. In this way they combine the computing power of their excavator with other mining equipment. They can then get less money, but more often. Crypto miner then receives a sum equivalent to the work his excavator has done.
Read also: How Does Bitcoin Mining Work?
In this case, it all comes down to the fact that not every crypto can be mined. They differ in their consensus algorithm. There are two main methods of validating blocks: Proof of Work (PoW) and Proof of Stake (PoS).
In the first one, there is the mining process, while in the second one, so-called validators are chosen - people responsible for confirming blocks. The more coins of given project you have, the better chance you will be able to perform this function.
Staking is simply the process by which you freeze your wallet to support a project's blockchain. For this you get an adequate reward. To increase your chances of becoming a validator, you can join the staking pool. It is created when several owners of a given cryptocurrency decide to combine their resources. These people simply add up their resources and then share the rewards for the block verification in proportion to their own contribution.