7 Practical Ways of Earning From Cryptocurrency
Cryptocurrency is still one of the most interesting and diverse ways there is in and out there for making money: you can decide to HODL, trade on central exchanges or peer-to-peer exchanges, launch affiliate marketing, do masternodes or staking, mine cryptocurrency, or just sit down and wait for airdrops.
It depends on your preference. Below are some of the ways to earn from cryptocurrencies.
1. Trading
That being said, reading charts and trading can be a lucrative daily activity for those who have the skill at hand. Be it crypto, futures, perpetual futures or any derivatives, trading is a common way of earning crypto and from crypto. Like any skill, it takes years of consistent practice to get good. It’s best to start trading paper money (trading simulators) and slowly edge your way into the actual market. You can practice trading crypto with real-time prices at WhaleClub for free. It’s a great way to get used to the terminology and tools used while trading live.
For those with a few years worth of trading under their belts, the most popular exchanges that give you access to a full set of trading tools are Bitmex and Bitfinex.
2. HODLing
Hands down, it is the simplest way and strategy to try and earn cryptocurrency. You don't even need advanced trading methodologies although it is a skill in itself to learn what to hold and when. Earn fiat in real life, buy into a cryptocurrency you believe in, and hold on for dear life. Buy low, sell high, repeat on a long-term scale. Your patience could pay extremely well here.
A general rule of thumb for cryptocurrency hodlers is this: the less time and energy you want to spend in the cryptocurrency space, the longer-term your expectations should be. Of course there’s a mandatory baseline of attention you need to pay when moving your money around, but if after your research you determine another cryptocurrency bull run is imminent, then dollar cost average in and keep your coins secure.
The next level from there is to gain knowledge of how markets work, that way you’ll be prepared to sell a portion of your holdings when the market is overbought, and buy the dip when it’s oversold.
3. Masternode hosting
Masternodes are still somewhat low-key in the cryptocurrency space, but they’re an awesome way to earn passive income. Very similar to mining, masternodes are responsible for block verification in Proof-of-Stake projects, and require users to dedicate their computers’ processing power to the network.
Each masternode requires a certain amount of its native token to be staked. For example, Dash masternodes require 1,000 DASH to be staked in a masternode wallet. The technical process won’t be covered here, so for a solid beginner’s guide, check out this article.
Your masternode return-on-investment depends on multiple factors, and their recent increase in interest earned has caused some scammers to enter the space. That said, Dash nodes earn an estimated 6.8% annually. Finding a masternode project now that succeeds long term could be one of the best investments out there.
4. Staking
Some Proof-of-Stake coins allow users to stake their cryptos in exchange for a reward. It’s very similar to setting up a masternode, but much less involved. All that’s typically required is storing your coins in a designated wallet, and the more coins you stake, the more you’ll be rewarded.
For example, Komodo offers 5% annually. Cardano is planning to introduce the option to stake cryptos soon, and Ethereum is following suit. Then there’s EOS, which allows users to stake their tokens in exchange for network resources. Instead of earning more EOS tokens, stakers are able to rent network resources to dapp developers in exchange for a fee.
5. Lending
Lending cryptocurrency is becoming a popular way of earning from cryptocurrency where owner lends to other users to return a predefined percentage per defined period. A good number of exchanges now allow their users to lend out their holdings and earn interests. You deposit cryptocurrency and choose desired time to lock in or lend although you can take it back any time. In most cases, those taking the loans do so for purposes of margin trading and such exchanges do have those margin trading features.
6. Crypto Faucets, airdrops, competitions and free giveaways
Crypto faucets are pretty cool. They range from websites packed with ads, to full-on games, with the common thread of paying out small amounts of crypto in exchange for your time and attention. The more basic ones simply require participants to complete a CAPTCHA, others payout after a survey is completed, and one app even pays out satoshis for killing aliens.
At the end of the day, this is the least lucrative way to earn cryptocurrency, assuming you find a minimal amount of success using the rest of the methods on this list. Of course, it also happens to be one of the easiest and most consistent ways to fill your bags.
7. Mining
There’s a handful of millionaires (billionaires?) walking around today that put together a cryptocurrency mining rig in 2010 and earned thousands of Bitcoins while they slept.
When a cryptocurrency uses a Proof-of-Work consensus algorithm, it requires miners to perform difficult mathematical algorithms in exchange for a block reward. The profit margin depends on the current market price of a coin, minus the cost of electricity and cooling required for mining rigs.
While mining Bitcoin isn’t nearly as profitable as it once was (not profitable at all at the time of writing), there’s still opportunity to make some passive income mining other altcoins. You can build your own rig, or sign up for a cloud mining service that takes care of all the tech-savvy stuff for you.
8. Affiliate Marketing
Affiliate marketing, or affiliate sales might be one of the best ways there is to get into making money online. It's not a get-rich-quick scheme and you require patience depending on the network you can generate.
When you’re starting out, you need either time or money to get the ball rolling. For those with more time on their hands than money, you can make legitimate amounts of cryptocurrency if you do affiliate marketing right.
In a nutshell, you’ll be selling a company’s product or service in exchange for a commission of the sale. In the case of cryptocurrencies, the most popular options are exchanges like Coinbase, BitMex, Bitrex, IDEX, and OKEx, and hardware wallets like Ledger Nano S — which is conveniently on a holiday sale for 30% off, at the time of writing.
In articles, affiliate marketers use affiliate links with links put with extra information attached to the other end of the URL. If you click on them, the author receives a commission for each successful sale. For Coinbase, both the reader and the author receive $10 if the reader signs up and deposits more than $100 into their new Coinbase account.
There’s really only 2 initial steps you need to take for Coinbase: sign up if you don’t already have an account, and spread your link. Coinbase makes it really easy on its users, and displays an “Invite” button on the main dashboard. Once you have an account, simply click the Invite button, copy your link, and share it with your audience.
Affiliate sales for a hardware wallet are very similar. First, sign up for their affiliate program, then use your affiliate link when recommending a hardware wallet to your audience. For Ledger, you’ll receive a commission of 10%, with monthly payouts in Bitcoin.
Learning how to build a successful affiliate marketing campaign requires little upfront cost, and forces you to learn 2 of the most important skills in business: building an audience, and sales. As shown above, it’s simple to get started, but difficult to succeed.
Affiliate marketing is present in almost every online business out there, so earning cryptocurrency would require a cryptocurrency centered audience, combined with the ability to sell to that audience. This takes time and skill, but succeeding here means you understand the basics of business.
