- With the growing popularity of cryptocurrencies, how can you make money from them?
- Can you make money from crypto mining?
- How you can make money from yield-farming in crypto
Cryptocurrencies have become very popular in the last few years and many worldwide are making a living out of them. In this article, we will show you ways you can join thousands of people who make money from cryptos.
What is cryptocurrency?
First, let's get to know what a cryptocurrency is. Fundamentally, according to Coinbase, cryptocurrencies are digital currencies that are decentralized and intended for use online. The first cryptocurrency, Bitcoin, debuted in 2008 and is still by far the largest, most well-known, and most influential. Since then, Bitcoin and other cryptocurrencies, such as Ethereum, have become popular substitutes for government-issued cash. CoinMarketCap estimates that there are about 22,932 cryptocurrencies out there.
How does cryptocurrency work?
Cryptocurrencies are encrypted and decentralized. Cryptocurrency value is not controlled by a single entity, unlike that of the Nigerian naira, United States dollar, or the euro. Rather, these tasks are widely dispersed online among users of a cryptocurrency.
For example, you can use cryptocurrencies to purchase everyday goods and services, but most investors treat cryptocurrencies the same way they would precious metals or stocks. Although investing in cryptocurrencies is a new and exciting asset class, it can be risky because it takes some research to fully understand each system.
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5 ways to make money from cryptocurrency in 2024
Here are the five ways you can make money from cryptocurrencies.
Crypto mining
Mining is arguably the most prominent way to make money with crypto. In essence, mining is the process of adding new data blocks to the blockchain and validating transactions. Miners receive cryptocurrency in exchange for their efforts. Mining can be carried out via cloud mining services or specialized hardware.
Cloud mining does not require you to buy or maintain hardware, but the payouts are typically less than those of hardware mining. It is crucial to remember that mining cryptocurrencies is difficult and energy-intensive, so you should do your homework before beginning.
Crypto staking
A "Proof of Stake" consensus method is now widely used by cryptocurrencies, allowing their decentralized networks to guarantee the security and veracity of every transaction without the need for a middleman like a bank or payment processor. This contrasts with the "Proof-of-work" (PoW) mechanism (in mining) employed by well-known cryptocurrencies like Bitcoin and Litcoin, wherein miners engage in a competition to find the encrypted solution to the block.
Through "locking" a portion of your holdings into a staking pool for a predetermined period of time, "Proof of Stake" cryptocurrencies allow you to get rewards just for making a small but meaningful contribution to the network's security. If you intend to hold onto the cryptocurrency for a longer amount of time, this is a great option because you can use it to your advantage rather than having it sit around.
Play-to-Earn
Playing games online is another way to generate passive income. Play-to-earn cryptocurrency games are widely available these days, and they are all different. Among the more well-known ones are Axie Infinity, Notcoin, Floki, Gala, and Beam.
Airdrop
Another easy way to make money in crypto is by participating in airdrops. An airdrop, or giveaway, of a new cryptocurrency by its developers is a common strategy to promote and increase interest in and excitement about it. To be eligible to receive new coins, you might need to take certain actions, like following the cryptocurrency project on social media, keeping an eye on it on a Discord channel, or providing other project support.
It is important to remember, though, that a lot of airdrops are frauds, and even if you do receive some coins, they might turn out to be worthless.
Yield-farming
Yet another popular means of earning in the crypto space is yield-farming. Just as in a bank, users can profit on certain decentralized finance (DeFi) platforms and decentralized exchanges (DEXs) by getting involved in the lending process. By connecting their cryptocurrency wallets, users can commit coins and tokens to a lending pool alongside other users through yield farming techniques.
After that, that pool is used to make interest- and fee-only loans to other people. Users may receive compensation for taking part in the lending process or interest based on the amount they deposit or maintain in their account.
Three factors determine how much money is made from lending cryptocurrency: the length of the loan, the amount of the loan, and the interest rate. The top three lending platforms are Balancer, Curve, and Uniswap.
Additionally, a lot of DEXs offer liquidity pools where users can place their cryptocurrency bets. Other users can benefit from price fluctuations by using these pools to facilitate faster transactions. Typically, liquidity providers get paid a portion of the cryptocurrency that they have locked away in the pool.
DISCLAIMER: The information contained in this article is for educational purposes only. It is no investment advice. Please do your research before investing your money.
