Crypto has become one of the most fascinating asset classes in the world and has dominated the headlines for years now. Thanks to both this attention and the success of some of its top tokens, many more experienced investors and newbies have become interested in making money from the asset class.
But if you don’t know a lot about crypto, it might be hard to imagine how internet tokens you can’t see in real life can make you money. In reality, there are several ways to make money from crypto, some of which are as follows:
This is perhaps the most common way to make money from crypto. At its core, speculative trading simply involves buying cryptos at a certain price and reselling them if and when they reach a higher price.
However, choosing the right crypto that will make you a profit is easier said than done. As Michael Shaw explains, the best crypto to buy could be an older or newer token, a proof-of-stake-based one, a proof-of-work, and so on. There is so much variety in the industry that it takes a bit of discernment and research to make the best choice.
Mining is a very important activity in the crypto world as it is the process by which new tokens enter the ecosystem. Making money from mining essentially involves mining a new token and selling it.
The thing to keep in mind, however, is that mining is often a very expensive undertaking, mostly due to the high cost of electricity. So expensive, in fact, that some crypto users have stolen electricity to get around this cost. Mining often requires specialized hardware or software on top of these electricity costs so that is something to keep in mind.
If you opt for mining, there is also the option of joining a mining pool to split the costs with others or paying for a mining service.
Staking applies only to cryptos that are based on a proof-of-stake consensus. It essentially means committing some of your tokens to the network for a certain amount of time. In return, you earn interest.
Staking is a passive form of income (unless you choose to become a network validator) and is a good option for crypto investors who are more risk-averse. Many crypto exchanges, wallet providers, and so on offer investors the chance to stake from their platforms and you might want to take advantage of this.
The crypto industry has evolved to the point that you can win cryptos in a lottery. Just like with traditional lotteries, you wager a certain amount of money and if you are chosen, you win a jackpot. But unlike a traditional lottery, you don’t win fiat currency but a digital asset that might appreciate in value.
There is also the option of a no-loss lottery. This type of lottery pools together the funds of those who play, stakes it to earn interest, and the winner gets both their initial wager and the interest. Those who don’t win get their initial wager back, meaning that there is no risk to the players.
Just like with fiat currency, there is no shortage of people who want to borrow crypto for different reasons. If you’re trying to make money through crypto, you can always sign up on various crypto lending platforms and lend your tokens to others. In return for this, you can charge interest.
While it is not quite as passive as staking, it allows you to make money off the tokens that you might already own. The more you lend, the better the reputation you will develop over time on these platforms. And if things go well, you could even take up crypto lending as a full-time side hustle.
New blockchain-based projects are launched all the time and they are not all perfect. The developers of these projects are aware that there might be bugs and other issues that need to be addressed. This is where bounty hunting comes in.
These projects typically offer a cash reward for anyone who can spot bugs in the system and report them. Depending on the project, this could be hundreds or even thousands of dollars. Doing this will not only earn you a side income but you can have the satisfaction of having helped a blockchain project become better.
Conclusion
If you’re new to the world of crypto, you might be confused as to how you can make money from it. But the truth is that there are so many avenues to make money from crypto, with something for everyone. Regardless of your tech expertise, risk tolerance, and personality, you will probably find some way to get involved in crypto for a profit.
