Given the great and ever-increasing amount of publicity they are receiving, a lot of people have started to wonder how to make money with crypto currency. The short answer is that cryptos are like any other investment class that people may be unfamiliar with.
It is certainly possible to make money with them, but it is necessary to understand the rules of the crypto game and play accordingly.
With that caveat out of the way, there are two basic ways of making money with crypto currencies. The first is to mine them and the second is to buy them. Yet there is not much point in either mining or buying cryptos unless you pick the right one.
At the moment, there are some 1300 crypto currencies, of which only a small number are likely to ever be worth your time and effort.
Everyone dreams of finding the next Bitcoin, buying in at a price of 2 cents, and then watching it go to the moon and beyond. That is the allure and the danger of crypto currencies. Some of those rocketships to financial prosperity are going to explode on takeoff or fizzle out and crash before they reach their intended destination.
Others may indeed go interplanetary.
Crypto Currency Mining
Before you place your monetary bets on a random crypto currency, it might be wise to explore the possibilities. One of the best ways of doing so is to join a mining pool.
By combining your own modest computing power with those of thousands of other equally-humble players, it becomes possible for you to start making money on cryptos right now.
This means right now.
You can search online for a mining pool, download their software, and start mining right away. It costs you nothing at all to purchase software or gain membership in the pool. You can be making money within ten minutes or so.
While you are not going to make a fortune with your desktop or laptop, you will make a little bit if you keep after it. More importantly, you can learn the rules of the game with house money.
Now that you are in a mining pool, you will undoubtedly start following the day-to-day fluctuations in the price of your chosen crypto as well as in the crypto space in general.
The daily swings between highs and lows are simply astounding but you will soon come to recognize basic patterns in crypto behavior even as your mining pool participation chugs along and puts a few coins in your pocket.
Once you have reached the point of familiarity with this new investment class, you are finally ready to move into it on a grander scale. Once you have decided to actually put some real money of your own into it, there are two basic ways in which you can do so.
You can build yourself a dedicated mining rig which will cost you several thousand dollars, or you can buy several thousand dollars of a crypto currency that you think is ready to take off.
Neither of these options are devoid of risk. You might invest in a dog crypto that isn’t going anywhere. You can also buy a fancy mining rig and run across problems with configuration or overtaxing your home wiring system that leave you with the need to invest still more in fixing the problem.
Invest In Crypto Coins
If you are looking for instant performance, it might be better to invest– since this can be done in a very short period of time. It takes longer to buy the components of a mining rig and get them all set up properly. Plus of course it takes time to actually mine coins in appreciable quantities.
To recapitulate on how to make money with crypto currency, you want to do the following.
- Master the space so you understand what is happening around you. Join a mining pool and start paying attention to the daily crypto tickers.
- Once you are conversant with the potential opportunities and pitfalls, expand your investment with either a full-blown mining rig or with a substantial purchase of existing cryptos.
In any case, once you start accumulating crypto currencies you will want to do something with them. Unlike the FX trade between, say, the US dollar and the Japanese yen, exchanges are not as smooth and automatic in crypto world.
As a general proposition, you will want to eventually transfer at least some of your holdings into cash, which is not as easy as it sounds.
For one thing, many cryptos are not firmly linked to a real world currency value, no matter what the market exchange rates show. The only really solid way of getting from crypto space to cash world is through an exchange of your particular cryptos into Bitcoin and then a transfer from Bitcoin into cash.
In that regard, the posted rate of exchange into cash is actually a dual calculation of your cryptos’ value in relation to Bitcoin and then Bitcoin’s relation to cash.
This exposes you to several rounds of handling fees and discount rates which generally means that you are not going to get the stated exchange price in full. Different exchanges charge different fees. Some exchanges only handle certain types of cryptos, so you may have to transfer from one exchange to another and only then move over to cash.
In addition, you may need one or more offline wallets to hold everything in. Yet it can be done and it gets easier with every passing day as all the kinks get worked out.
In closing, here are a couple of money-making crypto strategies that can help you multiply your profits once you are in firm command of the basic ingredients.
- The bitcoin dominance rate shows you what percentage of the entire crypto pie is held in bitcoin. By trading in to Bitcoin when this is low and trading back out into another crypto when it is high, you can certainly multiply your winnings.
- Since there are new cryptos coming onto market all the time, tossing 10 bucks into each of them is an easy and cheap gamble to make that could pay off big time if one of them hits the jackpot.
- When any crypto is hitting new highs or lows, transaction times get very long– so get in and get out before the peaks and valleys. As in any other investment, make your money in the middle 80% of the range. Take your profits and sleep easy knowing they are locked in. Many people get trapped at the extreme positions and lose much of their holdings by being forced to wait until their transactions process.
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