Now, there are numerous different approaches that you can take part in cryptocurrency. Each of them has a specific profit and a specific time for this profit. If you wish to explore the world of cryptocurrencies and learn how to make money with them, we will tell you everything.
Mining
Cryptocurrency mining is a procedure that ensures network efficiency. For the intended goal of this endeavor to be accomplished, miners are rewarded with cryptocurrency. Miners utilize powerful machinery to accomplish. You can arrange it to take place at your home or you can reserve a separate space for it. The more advanced the equipment and facilities, the more money you can make.
Several varieties of mining exist. Each of them may have their own equipment. The most common form of mining is on a video game card. A cluster of video cards (farms) is employed for this. 1 farm has 6-8 video cards in total. The expense of one of these video cards is $1,000 - $2,000. A larger farm has more video cards necessary (starting from 8). On average, 2 - 3 farms are dedicated to home mining, 5 farms are necessary for large-scale mining. If you're reading this and want to know how quickly it will pay back, there is no exact answer. Many things are dependent on the type of mining, the cryptocurrency and its current status on the market. Typically, the costs are paid for in 10-12 months. However, this is common after several months or, more commonly, after several years.
The condition in the cryptocurrency market is complex: some cryptos can increase in value dramatically (as was the case with Bitcoin), while others will decline or will never be minered. An example is the transition from Ethereum to the Proof of Stake protocol (The Merge). This cryptocurrency was moved to a different system of operation and is no longer accessible.
Mining is simple on the inside. You will have to take charge of the acquisition of equipment and the provision of rooms alone.
How to start mining?
1. Buy and set up the equipment;
2. Register a wallet to which you will withdraw profit;
3. Register in the pool (in the network) of the currency you want to mine;
4. Process cryptocurrency transfers and create blocks;
5. Get a reward in the crypt;
6. Withdraw your income.
Trading
The process of buying and selling cryptocurrencies is called cryptocurrency trading. Its primary goal is to purchase digital currency at a lower cost and to sell it at a more expensive price. Crypto traders ( those who exchange) make a revenue from the contrast between the purchase and sale of cryptocurrencies. To make money, you must wait for the value of cryptocurrency to increase and then sell it. Obviously, the more expensive the cryptocurrency, the greater the crypto trader's income. Before initiating the trading process, you must first assess the market and determine which cryptocurrencies are most popular. It's important to remember that the value of the cryptocurrency's exchange is always evolving, and on a single day, it can increase several times or become smaller. However, the other side of the coin can also occur, when the exchange rate is drastically fluctuating. As a result, we advise people not to begin trading in large quantities all at once. Even a modest start of $5-10 can lead to a final income of $10,000 in 2–3 months of active and dedicated trading.
In their endeavors, crypto traders seal short-, medium- and long-term contracts (short term - within a day, medium term - within a week, and long term - within a month). The entire process of buying and selling takes place on special platforms called cryptocurrency exchanges. In order to choose a cryptocurrency exchange, you must consider:
- The volume of the transaction. Ultimately, the greater the number of people who participate in it, the more steady it will become.
- Transaction costs. Obviously, the higher the cost, the more money you'll need to pay for each new transaction.
- Withdrawal thresholds. Examine the daily and monthly maximum withdrawals to understand how much you can withdraw per day/month.
It can take a lot of time to trade if you're serious about it. It's vital to understand the specifics of currency trading and to keep track of any alterations in the cryptocurrency market. Additionally, it doesn't require large investments; you can begin to trade with the amount you choose. Before initiating cryptocurrency trading, you must first purchase the cryptocurrency and place it on the exchange. To become familiar with crypto, we suggest beginning with stablecoins (such as USDT). You can purchase USDT in the Swap section in Kolo. It's sufficient to have any fiat money or cryptocurrency in the account that can be traded for USDT.
Staking
The process of cryptocurrency staking is intended to ensure the stability of the blockchain by storing cryptocurrency in a wallet. You must have a crypto wallet for this cryptocurrency and a configured server (a personal computer is appropriate for this) that will deal with blockchain transactions. The wallet is considered a form of proof of identity that will prevent you from cheating the network. For the entire procedure, the network will compensate you for your effort with a percentage of the coins in your wallet. It's similar to a bank's investment in money, where you deposit money and receive a greater amount of money after a designated period. The larger the initial investment (the more you devote to the account), the more you can receive. It's impossible to know exactly what you'll earn before you begin. This indicator is based on the initial investment amount (deposit amount), the cryptocurrency itself and the status of the market. On average, the profit is between 5% and 15% every year. However, the same as with all methods of making money with cryptocurrency, staking can also involve risks of all losing everything if the cryptocurrency market declines. The most simple way to begin staking is to utilize a staking pool. Frequently, it is a specialized exchange or a specific service.
Two of the most common staking options are locked staking and flexible staking. Locked staking is confined to a specific period allows you to transfer cryptocurrency for storage. For instance, if the deadline is 60 days, but you choose to early withdraw your deposit even if you do so after 59 days, then all the profit gained during this time is lost. This method of stakeholder is beneficial because it is often associated with a high yield. This will help you to earn more money.
Flexible staking is the opposite of locked staking. Here, you don't have to specify an end date for cryptocurrency storing, and you can take advantage of any revenue to withdraw funds immediately. Flexible staking enables you to manage assets freely and take out money at any time that's convenient.
Staking is a great way to earn passive income that doesn't require significant investment, special equipment, or extensive knowledge of crypto.
Long-term investment
Long-term cryptocurrency investment is the acquisition of digital currency for a long period of time with a larger increase in value. One example of successful investment in this type of cryptocurrency is Bitcoin. Those who purchased BTC as soon as it was released had significant returns to their investment a few years later. However, Bitcoin isn't the sole currency you can utilize to invest. To understand which cryptocurrency is most appropriate, pay attention to the length of time it has been on the market, the number of owners it has, the value of 1 coin, and the recent increase in price. Additionally, it's not necessary to devote funds to a single digital currency. You can split funds between several. Again, remember that over a long period of time any cryptocurrency can decrease, increase, decrease again, and increase again.
Selecting a cryptocurrency for long-term commitment is just as important as choosing one. Now you must find a location that will safely hold your funds. The most basic and obvious is a digital (crypto) wallet. You don't need to travel far - with Kolo, you can purchase and store cryptocurrency.
Initially, long-term investment appears to be a relatively simple endeavor. Actually, it's true because you simply purchase crypto, store it in your wallet and let it grow. The complexity is that it's impossible to know how long you have to wait: several months or several years.
Farming
The process of farming involves the lending of your cryptocurrency. They're placed in a liquidity pool (e.g.storage). It's vital to add a currency pair to the pool - two identical coins. The ETH/DAI pair is an example of this. Let's assume that 1 DAI is equivalent to 1,000,000 and 1 ETH is 100,000,000. Now, in order to have each coin in the pool cost $1,000 (which is approximately), it is necessary to place 1,000 DAI and 10 ETH in it. And you are now earning $2,000. Users (traders) pay for the privilege of holding coins in the exchange that's central to your other assets. Each of these operations is associated with a fee. You will receive a portion of the funding. Your payoff (%) is based on your portion and the fullness of the liquidity pool. If new members are incorporated into the group, your participation decreases; if someone leaves the group, their participation increases. Additionally, if you paid $2,000 into the pool, and someone else paid $4,000, then the higher percentage will be split between the two people. As a result, farming can assist you in earning from 5% to 10% every year.
How to start farming?
1. Choose a website for farming.
2. Choose a currency pair.
3. Connect your wallet to the platform.
4. Deposit the appropriate number of coins (two coins for the same amount).
5. Get profit to the account for each transaction.
Similar to other methods of money creation, farming also has associated risks that the value of the currency will decline significantly, this will in turn affect the profit.
ICO/IDO
ICO is the initial offering of coins. Ultimately, it is marketing coins prior to their appearance on the exchange. The corporation creates its own cryptocurrency and gives it to investors. Traders and investors typically purchase these coins, this is done at an early stage of development in order to further the company.
How to buy tokens during ICO?
1. Register on the project website.
2. Buy Bitcoin or Ethereum. Why choose these cryptocurrencies? Bitcoin is accepted almost everywhere; regarding ETH – many large ICOs were conducted precisely on the Ethereum platform;
3. Put your BTC or ETH into a secure wallet that you can manage. If it is an Ethereum wallet, it must support ERC20 tokens;
4. Specify a BTC or ETH address on the website of the selected project, and transfer the required amount to the address, that is, purchase ICO tokens;
5. You will then receive the tokens at your wallet address.
After that, the process of working with these tokens can be accomplished in two different ways:
- you may keep these.
- you can participate in the exchange of coins for a higher income. However, it's vital to choose an exchange in advance that will allow you to trade these tokens for other tokens or even dollars. Some tokens are not appropriate for purchasing or selling on a particular exchange.
ICO has both benefits and drawbacks.
Cons: investments that are unsure of their future, as the founders of the company can halt the project before the release of coins.
Pros: if the project is of high quality, it's possible to make money from 2x to 400x from the initial investments.
IDO (Initial DEX Offering) is an initial offer on the exchange. Here, the process of selling coins is simultaneous with the introduction (publication of cryptocurrency).
The most common way to participate in IDO is to be listed on the white list. Initially, only a site selection is necessary. The leaders of the IDO field are DAO Maker and Polkastarter; the young platform Seedify is also growing in popularity. On any of these platforms, you must choose a future IDO, then apply for a white list. After that, you can simply confirm your identity. The team responsible for the selected project will process requests and choose random winners in the whitelist. The outcomes are released on various communication platforms, so we advise you to subscribe to these platforms.
Conclusion
Regardless of the method you choose to make money, you should always remember that the cryptocurrency market is still in the developmental stages. There is no single most efficient method of making money with cryptocurrency. Everyone has benefits and drawbacks. Pay attention to the currency that is promising, attempt to assess the risks and reduce them.
