In our previous articles, we've written about Bitcoin and cryptocurrency. Today, we're going to be talking about the various ways we can earn in cryptocurrency.
Cryptocurrency, as we all know, is a decen- tralized digital currency, and transactions are recorded and verified. But unfortunately, in the current world, we have seen a lot of people make money, lots of it off cryptocurrency, and we've also seen people lose money.
Today, we will discuss how we can earn money in cryptocurrency.
Trading
This is the most popular method of earning in cryptocurrency. However, trading in cryptocur rency means you have to speculate on the price markets.
Trading is harder for beginners. We have seen many beginners make mistakes and lose lots of money due to shared trading knowledge.
Below are five steps that would help you get started.
Continuously research what type of cryptocurrency trading is right for you, ask questions, and get your facts right.
After researching, you know whether you want to do long-term or short-term trading.
Always choose the trading method that's right for you.
Learn how to place trades and read charts ⚫ Choose the exchange that works best for you and start trading.
Whether you're a beginner, you must watch out for the trading risk.
Cryptocurrency is volatile, it attracts traders, but it is still dangerous. Drastic things can happen in seconds.
The market is mainly unregulated compared
to more traditional marketsThe market pattern is often inaccurate
Don't put more than you can afford to lose
The use of excessive leverage
Knowing when to close a position and to take profits or cut your losses is essential.
Yield Farming
This involves lending or staking cryptocurrency for interest and other valuable rewards.
Yield farming makes use of staking. It means locking your cryptocurrency up for a while to get interested.
Yield farming works by first allowing the investor to stake their coins which causes a hard fork. Then, if the price of the coin appreciates, the investor returns rise.
There is a risk to Yield farming also.
It is volatile, and the price of your token could crash or surge while it is locked in.
You may unwittingly put your coin into projects or scenes that are fraudulent.
There are intelligent contracts risk
Impermanent loss
Lending
This decentralized financial system allows investors to lend their cryptocurrency to people; making this the interest payment in the exchange is known as a "cryptocurrency dividend."
Let me give you an example of how it works. You
may have 20 Bitcoin. You plan to get a steady
passive income with them; There's a chance to
go into cryptocurrency lending; You will receive
interest. The interest rates can vary.
You can lose out on your cryptocurrency and earn extraordinary interest in return, think of it as you using your Piggyvest or Cowrywise savings account. You stash the money while the bank pays a specific interest rate.
Ensure you find a good and trustworthy platform before you loan out your cryptocurrency.
Staking
Staking in cryptocurrency means locking up a portion of your cryptocurrency for a letter of time to contribute to the blockchain network.
While not every cryptocurrency can be staked, most can. Here are a few cryptocurrencies that can be staked.
Ethereum
Cardano
Solana
There are rewards for staking in cryptocurrency
By staking, you can earn additional tokens.
Compared to cryptocurrency mining, staking is less resource intensive
Stagers get voting rights and participation
For investors, staking can be an easy way to grow holdings.
Airdrops
This involves sending coins or tokens to a wallet address to promote a new virtual currency.
It is a form of marketing method that startups use in cryptocurrency, which involves delivering tokens to the trader's wallet.
The airdrop is meant to spread awareness and increase currency startup ownership.
Mining
This is the method by which Bitcoin and other cryptocurrencies in the world are generated, and the transaction involving the new coin is verified and protected is called mining.
As we all know, mining is used to create a new coin and validate existing transactions in the blockchain. It is decentralized and helps reduce fraud and increase user confidence in a currency.
>>Here<<How to get rich with Bitcoin even if you have no idea about the technology
Top comments (1)
I can say that I've discovered crypto lending not so long ago, but it turned out to be a great way of increasing my savings. I've been using hexn.io platform for that, and I've never had any problems with it, so I'm pretty sure that it should be more widespread than it is now because you get a fixed percentage of your deposit, and you don't need to constantly analyze the market or have in-depth knowledge.