One of the major reasons that the crypto industry has grown as quickly as it has over the past decade is because of the abundance of money making opportunities that are found throughout the market, and in 2020 the diversification of these opportunities is presently clear as there are more opportunities to generate money with crypto than ever before.
However the trend is for these opportunities to become quickly saturated and for the profitability of such opportunities to drop as a result, with the ability to track down unique and untapped opportunities being something that can be profitable for anybody that can do so.
It’s with this in mind we have created this guide which takes a look at cryptocurrency as a whole and some of the more common ways of making money with cryptocurrencies, before moving on to look at some unique money making opportunities within the cryptocurrency industry and how they can be used to generate higher levels of profit.
What are Cryptocurrencies?
Where Did Crypto Come From?
In 2009, the first public mention of the term “cryptocurrency” was found in a newly-released research paper known as the Bitcoin Whitepaper that described a decentralized financial system that revolved around a new kind of digital currency known as cryptocurrency, with the first incarnation of this new digital currency being “Bitcoin”.
In the earliest years of Bitcoin, its growth was gradual and it remained as a hidden subsector of the internet for a long time before it grew to the point where it became a widely respected online currency.
The mystique of Bitcoin and cryptocurrency in general what was largely as a result of the creators of Bitcoin being an anonymous group or individual known only as “Satoshi Nakamoto”, with this person or people being a part of the Bitcoin space for the first few years of its operation and then mysteriously vanishing in 2010.
One of the more ingenious features of cryptocurrency that have ensured that it has gotten to the point that it’s at today is that built into Bitcoin itself is a mechanism that makes it a continually deflationary currency, while the demand for Bitcoin has naturally increased as more people came in contact with it.
These two features together have created a positive feedback loop where the more people that held and traded Bitcoin, the more profit that they made, the more they made profit, the more new users would hear about these profits and in turn become involved, and then the more the new people became involved, the more existing users would generate profit.
What is Crypto Used For?
Today, cryptocurrencies are used for a wide range of different solutions and activities, with this predominantly relating to the generation of income from speculative trading and investing.
While it is true that trading cryptocurrencies remains the main way that they are used, there are also a range of other uses that have grown in popularity over the past decade and become the core reasons for the growth of more than 5,000 different cryptocurrencies.
These include mining different cryptocurrencies, which is a way of receiving newly minted units by connecting a computer to the network and using the processing power of the computer in order to try to earn free cryptocurrency, with this being one of the earliest use cases of Bitcoin and remaining a popular way of interacting with cryptocurrencies in 2020.
Outside of trading, investing, and mining, making payments using cryptocurrency is perhaps the second most popular way that it is used, with it providing a range of different benefits for those who would like to pay using cryptocurrency that will be mentioned in the next section.
But apart from these points, there are also other use cases for cryptocurrency which are a bit less obvious, such as the ability to create decentralized applications or dApps, the ability to generate interest on savings, and the ability to establish new systems of value by creating a new cryptocurrency.
What are the Benefits of Using Crypto?
While there are a wide range of different benefits to using cryptocurrency, we’ll stick to specifically payments-related benefits because they are perhaps some of the most significant.
The values users can get from using cryptocurrency to make payments can be broken down into a few key points which are cheaper transactions, faster transactions, permissionless transactions, and private transactions.
Making transactions using cryptocurrency can be significantly cheaper than using the legacy financial system, with a major cryptocurrency exchange earlier this year making a transaction of hundreds of millions of dollars of cryptocurrency for less than $1.
Similarly, making transactions with cryptocurrencies instead of the banking system can be significantly faster, with some Cryptocurrencies taking 15 seconds or less in order to process the transaction to anywhere in the world, and with the same being true of banks taking 3 days or more for international transaction sometimes.
Cryptocurrencies are also permissionless which means that there is no need to provide significant amounts of invasive personal information in order to be allowed to have access to the network, but instead all users are able to freely interact with cryptocurrency networks without the need for permission.
And the last point, one of the advantages of using cryptocurrencies to make payments is that many cryptocurrencies are either pseudo-anonymous or anonymous in their nature, which means that users are able to maintain private or semi-private transactions, and this allows for the free control over finances without surveillance from banks.
How Do Cryptocurrencies Work?
How are Cryptos Different to Normal Currencies?
Cryptocurrencies are significantly different to normal fiat currencies such as the USD and EUR, but the key reason that cryptocurrency is different is that they are decentralized in nature, whereas fiat currencies are completely centralised.
What this means is that fiat currencies are created and managed by a central authority, typically a central bank, which means that a small group of people has full control over who gets new amounts of currency, and all monetary policy that is applied to it.
In contrast, cryptocurrencies starting with Bitcoin and including all cryptocurrency since then have replaced a central authority with mathematical and algorithmic systems that make autonomous decisions without the input or requirement for human beings to be involved.
This means that no matter what anybody does they cannot make the bBitcoin network give them free Bitcoins unless they connect a computer and successfully mine within the constraints of how proof-of-work functions, whereas a central bank is freely able to create as much currency as it would like and give it to whoever you would like.
What is Blockchain?
The technology that was created by Nakamoto and released in the Bitcoin Whitepaper is called blockchain, and it is a truly revolutionary technology that has redefined the way that the world thinks about financial activities.
Blockchain is a data structure that involves a chain of blocks of data being created at regular time intervals, with each block storing transaction data from the network that has been validated and updates a ledger system.
What this means is that by looking at all of the blocks in the blockchain you can track the financial transactions of any user and in that way you can tell who owns what, and how much of a cryptocurrency an account has within it.
The way that blockchain works is nothing short of genius because unlike a number of digital currencies over the past 30 years or more that have tried to create a robust environment, none of them have been able to survive because of the centralization that they had built into them.
This really boils down to a number of complex problems which Bitcoin solved simultaneously and incorporated into a single system, with the use of decentralization being the key factor for the success of Blockchain based systems.
What is Mining?
Each cryptocurrency has something in it known as a consensus mechanism, with consensus mechanisms being ways for all users in the system to be able to agree on who owns one without that being a central authority telling them that is the way it is.
The two predominant consensus mechanisms are “proof-of-work” and “proof-of-stake”, with proof of work being the first consensus mechanism that was ever created and the one that is integrated into how Bitcoin works.
Another way of describing proof of work is as “mining” because in order to reach consensus a number of thousands of different computers are all working to try to solve a complex computational problem that is provided by the Bitcoin network, and once a miner solves the problem then they will select the next transactions that are officially included into the Bitcoin blockchain.
This means that no single party you can select which transactions are accepted and which ones aren’t, and it also incentivizes the strengthening of the Bitcoin network because the more miners that are providing computational power to solve these problems, the harder it is for any single operator to have enough computational power to be able to overrun the system and give themselves free Bitcoin.
Where are the Best Places to Buy and Sell Cryptocurrencies in 2020?
PrimeXBT
PrimeXBT is the world's leading multi-asset margin trading platform, managing up to $2 billion worth of global trade every day, launching in early 2018 worth more than 150,000 traders on its waitlist, and growing at an exponential rate over the past 2 or 3 years.
PrimeXBT provides one of the most diverse ranges of assets available on the market in 2020, with a wide range of cryptoassets that include BTC, ETH, XRP, LTC, and EOS, as well as a range of the world's leading traditional assets like stock indices such as the S&P500 and FTSE100, forex pairs such as USD/EUR and AUD/CAD, and commodities such as gold and oil.
At its core, PrimeXBT is a margin trading platform that provides industry-leading leverage of up to 100X on all cryptoassets and up to 500X on all traditional assets, with these levels of leverage being significantly higher than a majority of the market and providing enhanced opportunities for profit generation for traders throughout global markets.
PrimeXBT also provides the lowest fee schedule of any major cryptocurrency trading platform on the market with a flat rate of just 0.05% across all trades, irrespective of the size or type of the trade, and as well as this the platform provides powerful tools such as a professionally-built trading engine that can execute up to 12,000 trades per second.
Binance
Binance is another of the leading major crypto trading platforms, however unlike PrimeXBT it focuses solely on cryptocurrency trading and does not provide any traditional assets or fiat pairs for trading.
The platform does have an easy-to-use interface and is known for being of a higher quality than many other platforms in the market, with this helping to grow its user base over the past few years.
Binance also incorporates its own cryptocurrency into its system, with the BNB coin being used by traders in order to reduce their trading fees by up to 25%.
It’s important to note however that even with the 25% discount that Binance’s fees are often substantially higher than competitors, with it being up to 10 times more expensive than many other major trading platforms in the market, and this being a significantly disincentivizing factor for many traders.
Saying this, Binance is a well-made trading platform and has grown at a rapid rate over the past few years as a result of the wide range of crypto assets that are available to trade.
What are Some of the More Standard Ways to Make Money with Crypto?
Trading
Trading is the first way that users were able to make money with cryptocurrency when it was first created, with trading cryptocurrency being the same as the trade in any other financial assets at its core.
Traders make their way to platforms that provide an interface for the connection of different parties in the facilitation of streamline trading at desired pricing, with there originally being only a small number of cryptocurrency trading platforms on the market, and after a decade that being more than 500 operational platforms available today.
The goal of trading is to just discover and develop strategies within the market that will lead to the generation of profit by purchasing or selling different cryptocurrencies, however while this is a consistent goal across any kind of cryptocurrency trading, there are in fact a huge range of different strategies that can be implemented in order to achieve this goal.
Investing
Investing is probably the most profitable way that users have interacted with cryptocurrency throughout its lifetime, being that investing in Bitcoin 10 years ago and selling it today would yield a profit of more than 27,000,000%, which is perhaps the most profitable financial activity throughout recorded human history.
Investing is similar to trading in the sense that the goal is to interact with the markets in a way that purchases and sales will yield profit, however unlike traders there are a number of differences in the systems that investors use in order to achieve this.
Typically, while traders are more interested in creating shorter term and more regular trades, investors are looking to the long-term and therefore may create a single trade over the course of weeks, months, or years, with the goal of generating a significantly higher return on investment over that trade.
Mining
As mentioned above, mining is another way that users are able to generate an income with cryptocurrency with it being the most technical of all 3 of the most common ways to make money with crypto.
Miners need to build computers that are specifically designed to be able to profitably interact with different systems and to solve complex computational problems, and then also need to be able to have the software developer skills to be able to program code to try to solve some problems.
Miners are then able to be rewarded with free cryptocurrency whenever they successfully mine a block, and then can go to various different trading platforms and so the cryptocurrency that they have received to traders in order to use profit from their activities.
Unique Crypto Opportunities: Trading
Covesting: Hiring Pro Traders
Covesting is a new form of social trading that has been growing rapidly in popularity in the cryptocurrency space over the past few years, with it being integrated into PrimeXBT in 2020 and subsequently seeing a boost in growth as a result.
Covesting allows traders to be able to directly interact with the top performing traders within the cryptocurrency space and to be able to effectively hire them in order to trade on their behalf and to find the best strategies and investment opportunities in order to maximize the profit that they receive from their capital.
Experienced traders at PrimeXBT’s Covesting module create peer-to-peer investment funds that are tied to specific strategies and are publicly displayed to others so that potential investors, also known as “followers”, are able to see the historic return on investment over time for each fund.
This allows investors to be able to assess the performance of each strategy manager, to be able to select the top performing strategy managers in the cryptocurrency market, and then to invest into the funds and therefore effectively sharing in the ROI’s of the highest performing traders in the market.
Covesting: Managing a Peer-to-Peer Investment Fund
On the flipside of using covesting to increase profits is the ability for experienced traders to be able to create peer-to-peer investment funds on PrimeXBT’s Covesting module and then to increase the profit they make on their capital.
The way this happens is that traders that are reliably able to generate profit in the market are able to take the strategies that they are using anyway with their own funds, create an investment fund tied to their strategies on the Covesting module, and then they will receive a 20% success fee from all profits they generate for their followers, leading to a significant boost in the profits from using the same amount of their own capital.
PrimeXBT’s Covesting module provides direct access to a pool of investors that are actively seeking out different investment opportunities, with this being the largest and most efficient peer-to-peer pool of investment that is available in the crypto market in 2020.
Multi-Asset Trading
Multi-asset trading is a consideration that many cryptocurrency traders miss, however it is actually one of the most opportune ways of interacting with global markets that is available, and one that can open up a range of unique opportunities for generating high levels of profit.
Multi-asset trading, unlike cryptocurrency trading, is the process of trading different asset classes in order to be able to maximize profit from new opportunities, with the asset classes that are available including cryptocurrencies, forex, stocks, stock indices, commodities, metals, options, and others.
PrimeXBT provides the ability for traders and investors to be able to manage trades within a diverse range of different asset classes that span both the cryptoasset market and traditional asset markets, with this leading to a more efficient way of multi-asset trading, and in the process, also reducing the cost of being able to do so.
Unique Crypto Opportunities: Non-Trading
Bounties, Airdrops and Faucets
Since 2017, bounties and airdrops have been a core part of the cryptocurrency industry, and since much earlier than that Bitcoin faucets have also been one of the key ways that many users have secured cryptocurrency.
Bounties are created by different cryptocurrency projects as a way to increase their exposure, and in return for completing specified tasks users are given free amounts of their token in return.
Airdrops are similar to bounties in that users able to get free amounts of different tokens, however the way that they receive them means that there is no requirement to complete any tasks, but instead simply by having a valid wallet that can receive them and registering for an airdrop users will get free amounts of a token.
Faucets are cryptocurrency platforms where users are able to get free amounts of cryptocurrency by visiting a page or completing a certain task on a page, with the faucet typically giving out cryptocurrency once in every time period, being at once every 5 minutes, 10 minutes, half an hour, hour, or day, for example.
Crypto Referrals
Cryptocurrency referrals are one of the more popular ways for users to generate cryptocurrency, with the way achieving this being to get a referral link from a crypto platform and to share that on social media and elsewhere, with money being earned by the referrer under different circumstances.
This typically includes receiving a percentage of all of the revenue that the platform generates from their referrals, or receiving a one-off payment for every new user that signs up with the platform, and sometimes there may be a combination of these two ways of generating revenue.
One of the more interesting referral programs in the cryptocurrency space is PrimeXBT’s 4-Tier Referral program, which provides revenue from direct referrals as well as 4 levels of indirect referrals, and this led to the top 3 affiliates generating more than $1 million in 2019.
DeFi Yield Farming
DeFi is a new trend that has become popular in 2020, with yield farming being an activity within the DeFi subsector where users search for the most optimal ways of generating ROI that they can.
DeFi is about cryptocurrency users providing liquidity to trading pools in return for a token that will be worth a certain amount of value, and that often confers benefits such as voting rights and rights to receive revenue.
Yield farming is the process of getting these tokens which already generate an income and then putting them into their own pools in order to generate for the income on top of them, typically by compounding the revenue available across a number of different platforms.
What is the Future of Money Making Opportunities in the Crypto Space?
The cryptocurrency market has progressively developed over the past decade and we have clearly seen an explosion of new ways for traders to make money in the market, and as the market has grown we have also seen greater levels of innovation.
This is certainly expected to continue into the future as cryptocurrency penetrates further into the mainstream and as more of the traditional financial market becomes integrated with cryptocurrencies, with this being as a result of new opportunities opening up as new connections are formed and new people come into the space.
This would be a continuation of everything we have seen since 2010 until today, and will lead to the being an unprecedented number of ways that traders and investors are able to use the cryptocurrency market in order to enrich themselves, whilst the opportunities for entrepreneurs and business owners to become involved with the cryptocurrency market will subsequently increase as a result.
In Summary: Unique Crypto Money-Making Opportunities in 2020
While many of the money making opportunities in the crypto market are largely saturated, we have presented a few that are relatively new and that are growing rapidly in popularity and that can present some significant ways of increasing revenue.
Those who look into these opportunities will see that they present an excellent way to get an edge over the rest of the market, with tools such as PrimeXBT’s Covesting module being equally as valuable for experienced traders and inexperienced traders that would like to work together in order to increase their profits and reduce their risk.
To learn more about some of the platforms and opportunities mentioned in this guide, check out the relevant links above for more information.
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