What is cryptocurrency
Cryptocurrency is an electronic type of money. Nobody issues it in its usual form – like fiat money (bills and coins). It is released by generating mathematical codes (mining). Cryptocurrency is protected from counterfeiting by special cryptographic encryption.
Nowadays there are many cryptocurrency exchanges and exchangers that carry out transfers of electronic currency into cash. It is due to the rejection of the states of the scheme for exchanging real goods for cryptocurrency.
Transactions occur between cryptocurrency users. The movement of funds takes place through blockchain. The system of issuing cryptocurrencies is transparent because it is combined into one database, which records information on all media at once – this allows it to be released to anyone who has the necessary equipment for this.
Ways to make money on cryptocurrency
Cryptocurrency can be earned both by investing real funds in sources of income and without any investment. The free option is more suitable for beginners and those who do not have enough start-up capital – the risk is small, but it will also take a lot of time.
There are several options for earning cryptocurrency.
- Cryptocurrency trading on the exchange
There are special exchanges for cryptocurrency as well as for real money. In this case, to receive virtual money, you must complete the following steps:
- Registering on any site and opening an account;
- Depositing real funds to the account;
- Buying virtual currency at a low price then resale at a higher price.
If you invest in many different crypto coins, buying up small lots, then there will be an opportunity to sell them with income in the future. On the exchanges, the quotation of any currency depends on the supply and demand for it, there are no extra charges. Each person has the right to buy as many lots as he wants.
The exchange option has several features:
- For currencies that are less in demand, there may be no supply and demand;
- To complete any trading operation, you need to pay a commission (it may be different on different platforms);
- Some exchanges do not accept real money, and in this case, you will have to use one of the crypto exchanges, where the least profitable rate is relative to real money.
For this option of earning, you will need to spend a lot of time by paying attention to the constant change in quotes.
- Mining
There are 2 types of mining: regular and cloud mining. But the essence of any of them is the generation of electronic money on equipment.
For conventional mining, it is necessary to equip with powerful computer equipment and software. Currently, this sector involves the creation of entire associated blocks with modern video cards and processors (they are called “farms” or “pools”). There are options for several people to unite their computers to increase production capacity, with the subsequent distribution of the earned funds.
The positive aspects of conventional mining are the passivity of income (there is no need for continuous monitoring of the processes) and the transparency of all procedures. The disadvantages are expensive equipment, additional space for placing farms, and constantly growing competition (the probability of generating a unique code decreases). For cloud mining, there is no need to have bulky and expensive equipment. A miner can conclude a contract for a specific period to generate any electronic currency. Also, some services have referral programs that allow you to earn extra money.
- Investments in ICO and IEO
A good option would be to issue your crypto coins and eventually transfer them to more popular ones – this is called “ICO projects”. Earnings come from advertising of such projects, which are paid for with “tokens”, and they can already be converted into any currency – virtual or real.
This method is not under the control of the state and provides the ability to access various virtual funds. And those, in turn, can rise in price and bring a good profit. But there are also many fraudsters here, due to the same lack of control. Usually, ICO projects do not exist for long. This is a rather risky type of earnings because it is not possible to make even approximate forecasts. But, if you succeed, a good income is possible.
- Airdrop
These are online projects that give away free virtual currency for performing actions such as registering, completing tasks, replenishing an account, etc. This method will not take much time, but the income will be only for once. When the project is closed, the source of income is lost. There are also many complaints about the withdrawal of earned funds. There are many scammers in airdrop projects.
