In this article, we are going to talk about how to earn cryptocurrencies. The different options to earn cryptocurrencies are further elaborated in this article.
Table of Contents
How to earn cryptocurrencies?
There are many different ways cryptocurrencies can be earned. The way and how much cryptocurrencies you can earn depends on many different factors.
For example, how much knowledge do you already have about cryptocurrencies? Do you have experience trading because you already own shares? How much capital do you have available to invest with? Are you technical or not at all?
These are all questions that are important to find out which way(s) are most suitable for you to start earning cryptocurrencies. The most common variants to earn cryptocurrencies are listed below, because you can:
- Trading cryptocurrencies
- Mining cryptocurrencies
- Staking cryptocurrencies
- Earning cryptocurrencies with a masternode
- Obtaining cryptocurrencies through airdrops
Cryptocurrencies traded
“Buy Low, Sell High” – a common buzz among investors. However, this is much easier said than done. The hardest part of trading is determining when to buy or sell something.
Many traders trade based on technical analysis (TA). This is analyzing charts, based on patterns and indicators that you can use on these charts. There are also people who trade based on fundamental analysis (FA), which means that you mainly look at the company/organization behind it and what they have to offer.
Mining cryptocurrencies
Mining is the validation of transactions on the blockchain. The purpose of mining is to verify transactions that take place on the blockchain. Transactions on the blockchain are public. This means that all transactions that take place can be searched on the blockchain. Computers have to decide whether a transaction is actually correct by validating this transaction. Each transaction is verified multiple times by random computers. If a transaction is approved enough times, the cryptocurrency is sent from the sender to the receiver.
For sending cryptocurrencies on the blockchain, a fee is paid to the miners who check whether your transaction is correct. The busier the blockchain network, the higher the fee. If the compensation for miners is higher, it becomes more and more attractive to start mining. In this way, the market mechanism behind mining remains well balanced.
Staking cryptocurrencies
Staking cryptocurrencies is very similar to receiving interest on your savings account. When staking cryptocurrencies, you buy a certain amount of cryptocurrency from a coin or token, which you can then stake. This coin or token, then you only need to store this coin in one of your cryptocurrency wallets. Sometimes you have to enable the staking option for this. This is different for every wallet and will be described per wallet.
As a ‘striker’ you can mine or validate a maximum of the number of coins that you have staked yourself. This means that the more coins you have staked, the more power you have to validate transactions, and the more rewards you will eventually receive.
Coin staking is a great way to earn extra money by helping to build and validate the blockchain infrastructure.
Earning cryptocurrencies with a masternode
Masternodes have a special function in the blockchain network. Masternodes contribute to several facets of the network, namely:
- Increased privacy when executing transactions
- Transactions that are executed immediately (real time)
- Contribute to a decentralized governance of the network
- Contribute to a decentralized voting system within the network
Masternodes thus ensure that a blockchain becomes much more than just a ledger for transactions. It differs per cryptocurrency, which functions the masternodes perform exactly. This depends on the implemented functionalities.
It is therefore extremely important for a blockchain project that there are many masternodes online in order to guarantee the security of the network. Masternode owners are therefore rewarded for contributing to the stability and speed of the network.
The reason many investors save for a masternode is to generate passive income. In addition, it is of course nice to support the cryptocurrency you believe in by contributing to the network strength.
Cryptocurrency airdrops
An airdrop is a way in which you as a cryptocurrency enthusiast can receive free coins or tokens. You can qualify for these free tokens by signing up for an Airdrop. Airdrops are often only available for a limited time. It is therefore important that you do not delay registering for this too long, otherwise you may still miss out.
The value of an Airdrop can vary greatly. In most cases, however, the value is between $1 and $20. But there are also exceptions to the rule, such as Ontology (ONT). If you signed up for the ONT newsletter in January 2018, you received 1,000 ONT tokens. At “all time high” in June 2018, 1000 ONT was worth over $9000.