Simple and effective ways to earn cryptocurrency using your mobile device include mining, trading, tasks, and special mobile apps. Only a person completely far from civilization in the modern world has not heard anything about cryptocurrencies. You can hear about them “from every corner”. Nowadays, a crowd of experts teach how to make money on digital currencies. They also sell their workshops and webinars.
Crypto is indeed a relatively new, but quite lucrative asset for many investors around the world. This is due to some of its features, for example, the ability to make international payments and transactions without intermediaries. Moreover, you can also make money on it. This article is devoted to methods of earnings on crypto.
You can learn more about how and where you can buy digital currency, what platforms are available for this, and how to register on them by reading the article How to buy cryptocurrency.
How to get started with crypto earnings
Digital currencies are gaining increasing interest among investors around the world. People encounter crypto-related information on the Internet about how someone managed to reap thousands and even in some cases millions of bucks in a short time. How do they manage to do this and what are the general ways to make money on crypto?
1. Trading means generating income from speculative transactions of a short duration. The key feature of such transactions is that you can make money both through a rise an asset’s price (long positions) and through a fall in it (short positions).
2. Investment (holding) means buying a cryptocurrency to make money on the growth of its value in the long term. It involves long-term storage of coins for a period of several months to several years, during which the money is “frozen” and cannot be used for other purposes.
3. Arbitrage means earnings from differences in exchange rates on different trading floors. Digital currencies can be purchased on various platforms, including crypto exchanges and exchangers. Moreover, the price for the same token can be different, so you can buy cheaper on one platform and sell more expensive on another.
4. Mining means generating income from the extraction of new coins of any digital currency. As a rule, the reward is paid in the same currency that is mined. As a result, new coins enter into circulation. Not all coins can be mined using this method, but only certain ones.
More ways to earn on crypto
Let's find out more ways to generate income and to start making money on cryptocurrency in this section. Let's briefly consider 4 more methods in continuation of the previous section.
1. Participation in token sales is the purchase of a currency, that is just entering the market before it becomes publicly available. You can make money on this by buying coins at a lower price and reselling them later at a higher price. It is similar to investments. The only difference is that this method only applies to startups.
2. Airdrop implies a free distribution of cryptocurrencies upon fulfillment of certain predetermined conditions. Such promotions, like the previous option, are typical for startups that want to attract attention to their platform and increase its awareness.
3. Lending is one of the ways to passively generate income when a user lends coins to a platform or directly to other users at interest. Working with crypto exchanges in this case is preferable, as they have a wider selection of currencies and higher interest rates.
4. Staking is the blocking of coins in order to maintain the functioning of the selected chain. It works in a similar way to a bank deposit - the user provides money, which the platform uses at its own discretion, and the user receives a reward for this.
Now let’s look at all the above methods of generating income in more detail in the next sections. We recommend that you carefully review all possible options before you choose one or more of them.
Trading
One of the most popular ways to make money on digital currencies is trading. How to start making money on cryptocurrency through trading? We will discuss this in more detail right now.
This method attracts users with its simplicity. If they have already tried to trade other assets, then there should be no problems with crypto. However, despite the similarity of trading with various assets, it is necessary to take into account some important features of digital currencies.
One of these features is high volatility, that is the ability to make strong price fluctuations within a short time. This is the upside and the downside of cryptocurrency as high volatility allows traders to make transactions more often and receive more profit, but at the same time carries greater risk.
When we talk about cryptocurrency trading, we usually mean not buying and selling the currency itself, but betting on changes in its exchange rate relative to other currencies. This is called CFD trading, or contract for difference. This method is ideal for making short-term trades on small fluctuations in value.
The key point in such transactions is that the trader does not become the owner of the asset but makes a bet on a change in its value. If the trader believes that the price of crypto will increase, they open a long position (contract), but if they believe that the price will fall, then a short position (contract) should be opened.
In addition, for such transactions, traders can apply for leverage, which actually increases the size of the deposit by several times (1:10 – ten times, 1:100 – a hundred times, 1:1000 – a thousand times, and so on). Thanks to leverage, even with a small starting capital, you can increase your potential earnings.
The most important points in cryptocurrency trading are the timely opening and closing of a position. To find the best point to enter and exit a transaction, it is necessary to conduct a thorough analysis of the market situation in general and on the chart of a specific instrument. Therefore, trading is not fortune-telling or a game, but an accurate calculation.
Arbitration
Another way to make money from fluctuations in the value of digital currencies is arbitrage. It involves trading the same currency on different exchanges, where its value differs. Even minor price differences can yield good profits when making a large number of transactions.
Initially, this technique was used in the stock market and later was applied to other markets, including cryptocurrency. Its essence is to buy an asset at a lower price on one platform and sell it at a higher price on another.
Since digital currencies and many of the exchanges on which they are traded do not have any centralized regulation, the value of the same coin may differ between different exchange platforms. This may be caused by a lack of liquidity or too strong activity of large trading participants.
The price of crypto is not backed by anything, therefore it changes primarily under the influence of supply and demand. However, the demand for the same coin may differ on different platforms. So, what is assessed first is not the price of a particular coin, but the ratio of supply and demand for it.
Another option for making money on arbitrage could be the exchange of cryptocurrencies for national currencies of states. This becomes possible due to the difference in the rates of digital currencies when converted to fiat money, which can reach up to several per cent. Such transactions can even be carried out within the same site.
To successfully engage in arbitrage, it is necessary to constantly monitor changes in exchange rates, and even on different platforms. It is quite difficult for a person to do this. So, special computer programs or bots have been developed that carry out this work much faster and more efficiently.
Really good and fast bots are not cheap. Thus, the user, in addition to the initial deposit, will also have to spend money on purchasing a high-quality bot. Some of these programs not only track changes in market quotes but also make transactions independently.
Holding
One of the long-term strategies for making money on cryptocurrencies is investment, or holding. This is a method in which digital coins, like stocks, are bought and stored for a long period in anticipation of an increase in their value over time. Let's look at how to start making money on cryptocurrency through investing.
In this case, the high volatility of the crypto is again of great importance, since its value can increase not only by tens, but also by hundreds and thousands of percent. This means that with the right investment, you can gain hefty returns.
Although, with the same likelihood, coins can collapse in price, and do this even faster than their value increases. The price and value of cryptocurrencies is not tied to any real asset and is determined by supply and demand, as well as various other factors that the investor has no control over.
Therefore, when investing long-term in digital currencies, it is important to carefully select coins, assessing not only the growth potential of the cryptocurrency itself but also the prospects of the entire project. There are projects that offer innovative solutions in various areas, which allow their own currencies to gain popularity and rise in value.
For the most profitable investments, you need to choose currencies that can actually prove significant growth. These are, as a rule, new projects that are just entering the market, and here it is important to take advantage of this hype and invest in those coins that can skyrocket in the future, although there is a risk of dealing with scammers, for example.
However, no matter how carefully you choose coins for investment, you should not neglect another important rule: “Don’t put all your eggs in one basket.” This means that each investor needs to create a portfolio of different assets with different return rates and risks.
Cryptocurrencies typically occupy only a portion of such a portfolio. Indeed, despite their high potential profitability, they are also considered high-risk instruments. Hence, experts recommend investing no more than 10% of your total capital in them.
How to mine cryptocurrency from gadget
Each digital currency has a separate mechanism for injecting new coins into circulation. In some cases, the total number of coins is released simultaneously, in others, the crypto is gradually released as needed. In this case, coins can be generated in various ways.
One of these methods is to obtain new coins by mining. In this section, we will talk about how to start making money on cryptocurrency using this method. As a rule, special powerful equipment is required for mining crypto.
The main essence of mining is to verify the correctness of transactions made by users in a particular chain. This is a complex computing process that requires specialized equipment. Besides, operations are added to blocks, and the blocks are combined into a chain, which is commonly called a blockchain.
The mining reward is paid in the same currency that is mined in this way. Through this process, new coins are put into circulation. You can perform mining on your own or by joining a pool of other miners. In this case, the capacities are combined, but the income is also divided among participants.
The speed and efficiency of mining depends primarily on the technical capabilities of the equipment. However, the more power a computer has, the more energy it consumes. Accordingly, the income that the user receives from mining cryptocurrencies must exceed his expenses.
In addition, certain rules apply in different chains. So, in the Bitcoin network, for example, there is a halving system, which means that the reward for each mined block is halved every four years. If in 2009 the reward was 50 BTC, then in 2024 it will be only 6.25 BTC.
Recently, new crypto projects that appear on the scene try to avoid obtaining coins through mining. This is due to the fact that the process of coin mining is very energy-consuming and has a negative impact on the environment. Therefore, developers resort to other methods, for example, issuing currency.
Lending
In addition to active ways of earning income from digital currencies, there are also options for earning passive income. In this section, let's look at how to start making money on cryptocurrency employing lending.
Lending is a fairly popular way to make money in the cryptocurrency market. Its operating principle is similar to a bank loan. Its essence is that one user transfers his digital coins to platforms or other users directly and receives interest for lending his money.
Funds transferred by investors can be used for several purposes:
- By users – for margin trading;
- By exchanges – for issuing cryptocurrency loans;
- For providing liquidity.
Exchanges use investor funds to provide leverage to traders - this is an additional amount above the deposit that users can count on during trading. When a successful transaction is made, the user takes the profit for himself and pays a commission in the amount of 0.05% to 1% to the platform.
In addition, there are specialized lending websites where users can lend currency to each other without intermediaries. Each user can set the interest and the amount of collateral on the loan, and other users select options with the most acceptable conditions for them.
Everything looks quite simple and attractive. However, users often encounter fraudulent websites that do not actually provide any services, but simply disappear with their money. There are other risks, such as hacker attacks on exchange platforms, dishonest behavior of the exchanges themselves towards users, and so on.
Therefore, it is better to choose reliable platforms and not be fooled by extremely lucrative offers. If a website offers much more favorable conditions than everyone else on the market, then there is a chance that these are scammers. So, you should take a closer look at it before sending money there.
Staking
Another interesting and popular way to earn extra income from digital currencies is staking. Let's look in more detail at how you can start making money on cryptocurrency with its help. Importantly, this method of earning is applicable only to chains with the PoS consensus algorithm.
This algorithm is based on proof of stake and implies that each holder of a certain number of the platform’s own currency can become a validator in this network. Validators in such chains replace miners, that is, they verify transactions and add new blocks to the network.
At its core, staking is similar to a bank deposit: the user “freezes” a certain number of coins, which are used to maintain the functioning of the platform, and in return receives a reward. It is usually paid in the native currency of the chain in which staking is carried out.
The amount of remuneration often directly correlates with the period for which the funds are deposited. The longer the user chooses to block, the higher income can be received.
There are several types of staking:
- Fixed. The user receives a fixed amount of profit as a percentage or tokens for a given blocking period.
- Flexible. During the staking process, users can partially or completely withdraw funds, but this negatively affects profitability.
- Liquid staking is used as collateral for obtaining cryptocurrency loans or other instruments in the DeFi field.
- Delegated staking means a transfer of funds to another user for staking, the reward is divided between all participants.
You should always pay attention to the staking conditions, as they differ from one platform to another. The conditions may vary regarding the number of coins that must be blocked, the blocking period, the size of the reward, and so on.
Recently, more and more cryptocurrency projects use the PoS algorithm, since it is more environmentally friendly and does not require such energy costs as PoW. Therefore, finding projects for investing funds and generating additional income will not be a problem. The main thing is to choose a platform with a good reputation and growth potential.
How to earn cryptocurrency on your phone
All of the above methods of generating income on digital currencies require some investment of your own funds, some more, some less. But how to start making money on cryptocurrency if there is no starting capital or there is very little of it? Let's look at what opportunities are available to earn money without investment.
One of these methods is airdrops. They are carried out by new projects in the cryptocurrency industry as part of marketing campaigns in order to attract public attention to their currency and trading platform. The main thing is to carefully select and evaluate projects so as not to fall prey of scammers.
During airdrops, a platform’s native currency is given out free of charge for completing some simple actions or conditions. As a rule, this can be a subscription to the project’s accounts on social networks, or reposting publications. Of course, you won’t earn large sums this way, but you can collect modest start-up capital.
Another way is to participate in competitions held by cryptocurrency exchanges. Such promotions are carried out to attract new users and suggest fulfilling conditions such as subscription, reposting, inviting friends, and so on. For these actions, the exchange gives a reward.
The third way is to participate in affiliate programs. Users also earn money by attracting new users. In such programs, the partner earns a portion of the profit that the platform receives from the new users referred. For example, the partner receives the commission from each transaction of an attracted user.
Another popular method is the so-called faucets, special websites or applications that allow you to earn coins (and sometimes hundredths or thousandths of their value) for performing simple tasks, for example, calculating captcha or viewing advertisements. Earning money on such websites, as a rule, is very symbolic, but the tasks are also very easy.
All the earning opportunities that we talked about above can be done from a smartphone. All you need is an Internet connection and installation of the appropriate application. Most modern platforms, including cryptocurrency exchanges, have mobile applications where you can trade or perform other actions anytime and anywhere.
Conclusion
In this article, we've learned about the main ways to generate income from digital currencies. We've talked about how to start making money on cryptocurrency today. You can choose any of the options that are most acceptable in terms of start-up capital and other costs to start making a profit.
Some methods require active user participation, for example, trading. You can make money both on an increase in the value of a currency and on its decrease. The main idea is to correctly determine the direction of price movement and the point of entry and exit from the position. To do this, various analytical techniques are available that the user must master.
There are more passive ways: investing, staking or landing. In the first case, money is invested for a long period, betting on the increase in the coin’s value. Staking and lending mean receiving interest from the fact that other users or the platform itself use your funds.
In addition to methods that require a certain amount of starting capital, there are opportunities to earn money without initial investment. These include airdrops, faucets, and affiliate programs, where the user receives platform tokens for performing some simple actions such as subscribing, reposting, and so on.
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