The cryptocurrency compared with fiat currency (paper money or coins) comes with a number of advantages and that is the reason for the cryptocurrency mania among investors.
Some of the advantages include better security, universal recognition, privacy provided and lower or no transactions. For example, when you use cryptocurrency especially for purchasing property, you are able to eliminate middlemen such as lawyers and brokers.
Another important advantage which has not been mentioned is that often the value of a cryptocurrency is stable and can be very profitable in the short or long term. For example, the price of 1 Bitcoin has reached $12,745 which happens to be a new record high.
Because of the reasons above, and out of your curiosity, you may have been asking yourself,how do people make money from cryptocurrency? Before exploring that question, it is important to highlight the fact that there are a number of cryptocurrencies, more than 100 in total.
As per the market share, Bitcoin, Ethereum, Ripple and Litecoin are some of the most popular cryptocurrencies. Since Bitcoin is the most popular, other cryptocurrencies are often referred to as altcoins, alternatives to Bitcoins. Subsequently, below are the 3 ways how I make money from cryptocurrency.
I. Buy A Cryptocurrency
This is often the first option and thus the most popular because it is a bit easy. You can achieve this by signing up to bitcoin wallet service and there are different exchanges that exist including the popular one which is Coinbase. There are also other popular reliable options such as Xapo and Blockchain.info.
When you signing up, you will be required to provide your name, email address and of course set a password. It is important that you secure your account by using the two-factor authentication, and don’t use your phone number. That is because it can be risky; criminals can steal your information and use it to pilfer from your digital wallet. The last stage is connecting your wallet to your bank account, credit card or debit card.
After you have set up your digital wallet, you can be able to purchase Bitcoin,Ethereumor Litecoin at the prevailing market rate. Of course the next phase is waiting and hoping that the price or the value of the cryptocurrency goes up or appreciates so that you can sell for profits. The process can be simplified as buying and hold.
Like all investments, prices of cryptocurrencies tend to fluctuate and hence you may have difficulties buying and also in waiting for the values to rise, which may not happen overnight.Coins like Ripple and Dash are increasingly being used because they are more affordable.
II. “Mine” Cryptocurrency Using A Supercomputer
This is often not a realistic option for many people because mining of cryptocurrency is a process which is technical, requires computer programming proficiency. Moreover, computers that are setup to mine cryptocurrencies use powerful graphic cards and have the higher processing power to be able to solve complex math problems.Because of that you need to heavily invest in graphics cards. In addition, the computers tend to consume a lot of power.
Put in a simpler way, with this way of making money from cryptocurrency, you are simply getting compensated or paid for keeping the books or accounting for the platforms behind the cryptocurrencies.
Short of a warehouse of computers that are operational twenty-four-hour-a-day to mine cryptocurrencies, your chances of making lots money will be very slim.
III. Accept Payment In Cryptocurrency
Another great may of earning money from cryptocurrency is through accepting payments for your services or goods in cryptocurrency.
Of course to achieve that, you must have a digital wallet, and also have customers who are willing and ready to pay in cryptocurrency. To get such customers, a little research will do the trick.
Furthermore, you must be able to do comprehensive research and be able to compute how much of a cryptocurrency will be worth your good or service. That will be based on the value of the cryptocurrency. I understand it can be tricky but it can be achieved. For example, depending on the product or service, I can ask for one-third or one-fourth of Bitcoin for payment.
For other cryptocurrencies that are less valued like Ethereumand you are being paid by it, you can ask for 3 or 4 ETH.
In conclusion, depending on how you choose to make money from cryptocurrency, one important factor that must be considered is the market conditions.
For instance, in case you have bought a coin and it falls in value, you must wait until the value rises again to be able to sell. And in a case you mine a cryptocurrency that is less popular; there may not be sufficient demand essential for selling your coins and making profits.
To see the top coins to invest in visit Coin Market Cap