.png)
BITCOIN AND CRYPTO CURRENCY: 6 WAYS TO MAKE MONEY WITH VIRTUAL CURRENCIES Buy, trade, mine, staker cryptocurrencies ... What are the various possibilities to make money with cryptocurrencies? The growing spread of cryptocurrencies now offers a wide range of possibilities for trying to make money with virtual currencies. This could include managing a cryptocurrency account, trading crypto-based derivatives, mining, staking, obtaining rewards, etc. Introducing the different ways to make money with cryptocurrencies.
BUY CRYPTO COINS
In our last article on the outlook for Bitcoin, we returned to the various macroeconomic factors that can influence the price of cryptocurrencies. In addition to this approach, other analyzes such as technical and graphical analysis can be added. The virtual currency market remains very volatile and the risks high. Thus, depending on the profile and the objectives, favoring a long-term investment may be more advantageous. It is also necessary to detect entry or exit opportunities as well as possible.
To buy and sell crypto currencies, there are platforms specializing in crypto currencies like Binance, Coinbase, BitPanda, Coinhouse, Kraken, etc. This is usually the best way to invest for the medium to long term. Be careful though, the risk is very high and these assets are very volatile. You will therefore need to invest only part of your capital, taking your risk profile into account. These applications allow you to buy or sell a wide range of cryptocurrencies (Bitcoin, Ethereum, BNB, Ripple, Aave, etc.). Transaction fees are variable but generally around 1%. Note that low capital outflow fees are sometimes applied. It is therefore important to compare the different cryptocurrency platforms before opening an account.
Advertisementetoro virtual currency
There are various possibilities for trading cryptocurrencies through derivatives. The most common cryptocurrency derivatives are CFDs, which reproduce the variation of the corresponding cryptocurrency. Many stock market brokers offer the possibility of trading virtual currencies via CFDs. This is the case with brokers like eToro, IG, XTB, etc. CFDs are (very) short-term products with a high risk of capital loss and which require in-depth knowledge of the financial markets. Note that CFDs do not confer ownership of the underlying, and some sites that offer crypto-currency derivatives should be avoided. To do this, you can consult the AMF's blacklist. There is also a wide range of derivatives on crypto currencies, such as futures for example. Nevertheless, the risks remain high. In England, this led the FCA (Financial Conduct Authority, the equivalent of the AMF in France) to ban crypto-currency derivatives in 2021. Derivatives should therefore be handled with great caution and used for active traders who make frequent trips back and forth on short-term virtual currencies.
buy-crypto-currencies-trader-virtual-currencies
How to mine crypto currencies?
Mining cryptocurrencies remains a difficult process. The goal of the miner is to make his computer equipment available in order to secure the transactions of users of crypto currencies. To validate his participation in the network, a minor must provide proof of work by solving a mathematical problem. Solving the problem allows you to find a "hash" (code made up of letters and numbers), which validates the transaction. The accumulation of transactions over time makes mining more and more difficult.
To facilitate mining, certain individuals meet in a “mining pool” to centralize processing capacities. However, as an individual, it is still possible to mine cryptocurrencies. To do this, you need to equip yourself with an ASIC (specially designed for computer hashing), such as AntminerS9, AntminerT17 or AntminerZ11, etc. Otherwise, a mining rig can also be used. This is a graphics card. There is a wide range of these cards, such as the Vega56 (mainly for ETH), AMD 5700, GTX 1070, etc. Mining virtual currencies: is it profitable?
For individuals, mining is generally not a high-profit activity. Remuneration obviously depends on the costs generated. These costs come mainly from computer hardware and electricity costs. If Bitcoin were a country, it would consume atOverall, the mining difficulty tends to increase due to the cumulative process of validated blocks. Mining Bitcoin in 2017 was less difficult than in 2021.
Finally, we note for Bitcoin the presence of a halving every 4 years. This is the reduction by 2 in the remuneration of miners, supposed to increase the price in the long term, due to the decrease in supply. The last Halving took place in 2020.
CRYPTO CURRENCY STAKING
Staking is a growing practice. Staking consists of locking a part of your wallet in crypto currencies to receive rewards (most often interest). This is called "proof of stake", which is proof of possession (or participation). The central objective of staking is to allow better security of the exchange network and to reduce Blockchain energy consumption. This is because locked cryptocurrencies are used to validate transactions, which facilitates the Blockchain network.
The interest offered can sometimes seem high, and it is often better to learn about the seriousness of the project to avoid a sharp drop in the price of blocked cryptocurrencies. Crypto currencies allowing staking are crypto currencies like DCR (Decred), ATOM (Cosmos), XTZ (Tezos), ALGO (Algorand), etc. STABLE COIN FOR RETURN Some tokens aim to provide a stable price with low volatility. We are talking about stablecoins. To ensure price stability, these cryptocurrencies are often correlated with an underlying, much like an ETF. Put more simply, some stablecoins mimic changes in assets like dollars, gold, etc.
For example, Tether currency is backed by the dollar while DGX or PAX Gold are cryptocurrencies backed by the price of gold. For stablecoins, the presence of an underlying remains the most common practice. Other techniques exist, however, such as changing the number of tokens in circulation according to supply and demand, a guarantee system (example of the Dai guaranteed by ETH), etc. The Dai, for example, introduced a 2% remuneration on its stablecoin according to the press release published by Coinbase in July 2020.
There are several thousand cryptocurrencies out there and there are plenty of ways to make money. Some cryptocurrencies or tokens (cryptocurrencies associated with a business) are based on a process of destroying part of the supply in circulation ("burned tokens"). This is the case for large cryptocurrencies like BNB, or other medium cryptocurrencies like CHSB, REQ, etc. This theoretically contributes to increasing the upward pressure on futures prices.
Ethereum, for example, is not in limited supply and does not have a destruction system. For its part, Bitcoin is in limited supply. A very large part of the Bitcoin initially created is lost, which can be associated with unintentional destruction. In addition, a small number of tokens offer returns, just like a share. Please note, the success of many crypto currencies is based on a decentralized pyramid system. The increase in the number of users increases the capitalization of the tokens, which attracts more users, etc.