Bitcoin, altcoins and other crypto-products have become a popular and effective investment option. The growing importance of the virtual world is reflected in its market capitalization: cryptocurrencies were estimated to be worth $2.58 trillion as of the end of November 2021.
Here, we’ll cover eight strategies for turning a profit with various cryptocurrencies. Read through, pick one that works for you, and make sure you share the article.
- Mining farm
- Mining hotel
- Crypto exchange
- International money transfer
Table of Contents
Let’s start with the easiest way to make money on cryptocurrency.
The idea is the same as traditional stock trading — you aim to buy low and sell high, with the difference being your profit margin.
Bitcoin and other digital assets are volatile investments, so it is quite a risky business. It’s worth studying the whole process on a theoretical level first, to see which exchanges have a good reputation, how to open a “cold” wallet, and where you can store cryptocurrency safely. Trading also requires a good head for numbers and, usually, nerves of steel to handle the dizzying price falls and rises.
Let’s break down what “mining” is. In simplified terms, mining is a way of producing cryptocurrency. Initially miners only produced bitcoin, but now it can be done with a lot of other coins. The simplest mining scheme involves installing special software on a computer, then connecting its resources to the payment system.
However, as time goes by, more and more computing power is needed for mining, leading individual miners to ban together in so-called mining farms. A mining farm is a combined system of a number of computers or servers.
It is important to understand that with the growing popularity of virtual money, it becomes more difficult to make a profit from mining. This is due to overcrowding — more and more people are trying their hand at mining — as well the financial resources and energy that are required. As a result, it is simply becoming unprofitable and inefficient to mine individually.
Another way to make money with cryptocurrencies can be called a mining hotel. A mining hotel is a specialized area in a data center where the equipment for cryptocurrency mining is located. This equipment is usually ASIC-mainers, graphics cards (GPU) or individual computers in ATX form factor. To open a mining hotel, you will need:
- At least 100 sq.m. of space
- Sufficient power supply
- Excellent ventilation system
- Round-the-clock security
In addition, miners can be provided with an area for repair and self-maintenance of equipment, as well as routing and server equipment, additional IP addresses and other hosting services.
Your income comes from renting space for the equipment, security services, and a margin for electricity.
Another popular tool for making money from cryptocurrency is NFTs. An NFT, or non-fungible token, is a unit of record that is used to create a digital footprint for any unique item. These can include pictures, photos, videos, music, gifs — basically, any content that claims to be at least something unique.
There are many ways to make money with NFTs, but we’ll take a look at two of the most popular — creating and trading. Here’s a step-by-step guide on how to create your own NFT token using OpenSea as an example:
- Open the website
- Select Create — My collections
- Create a collection, name it, add a description and a logo
- Add tokens to the collection. To do this, select “Add items” and then “Add new item”
- After successfully uploading a token, put it up for sale
- Wait for it to be bought for millions (not guaranteed)
Trading is just as simple. You follow less well-known authors, buy their work cheap, and then sell it at a higher price once the artist gains a wider following.
With the beginning of the pandemic, metaverses began to boom. In April 2020, for example, Travis Scott held a concert in Fortnite, the wildly popular video game, drawing an audience of 12.3 million players. And in addition to diving into the world of NFTs, famous rap artist Snoop Dogg is creating his metaverse Snoopverse in The Sandbox, a game where players can buy and sell virtual property.
Virtual universes built on blockchain with in-game assets such as NFTs allow players around the world a variety of ways to earn money, such as:
- Changing local currency units for fiat currency through an exchange service. Their price is determined by the market.
- Selling game items in the form of NFTs at auctions.
- Renting property inside the game.
- Issuing credits to new users — experienced players can sponsor newcomers by lending them needed assets through a rental agreement or a deferred redemption basis.
Creating your own cryptocurrency exchange is one way to make money from cryptocurrency. There are many open-source platforms for exchanging cryptocurrencies. You can easily take their code and build your own platform based on it, establishing your own income stream. However, this method is not the easiest. In many countries, it’s required to have an expensive license and significant financial reserves in order to run a trading platform.
International money transfer
International money transfer is currently a very relevant service, especially for residents of Russia and Belarus. Many ways to transfer money between countries are blocked, and some just have high commissions. Blockchain can change the way we think about money transfers. Almost anyone can create their own international payment transfer platform based on blockchain. Establishing the platform wouldn’t be a walk in the park; the project would require a development team and a huge marketing campaign to attract a huge volume of users.
In conclusion, it should be said that the higher the yield of a specific instrument, the greater the risk of losing money – be sure to remember this before you open a business.