You’ve been following this crypto stuff for some time now, but enough is enough. The ups and downs, confusing terminology and new innovations, who needs them?! It’s time for the digits, the money chasing, the straight-to-the-point, getting yourself an income boost through the mythical power that is crypto.
Want to know more? You’re in luck. Here’s a guide to turning your bitcoin, ethereum, solana and nanos into growth and cash. Just a warning, though – some aren’t easy, others aren’t lucrative and the rest aren’t going to happen overnight. In the words of modern prophet Mike Skinner: a grand don’t come for free. Let us break this down a little.
You might have heard of bitcoin mining as being a simple way of making money. You solve the cryptography-based puzzle the quickest and you are rewarded for your work in bitcoin. Something from nothing, right? Well, not quite. It uses a lot of energy which costs money, and if we’re being honest, you’ll need to shell out thousands of pounds for specialist equipment to do it. But there is some crypto that you can mine a little easier, such as the altcoin monero. Though again, given the amount of energy it takes to mine, it isn’t really profitable. So if you’re looking to earn from crypto, mining is probably the best shout for most people.
This is similar to bitcoin mining, except it applies to blockchains that use a proof of stake (PoS) such as ethereum, as opposed to proof of work (PoW) like bitcoin. It’s a lot less energy-intensive, but it relies on having a large percentage of coins for that particular cryptocurrency, so ethereum is out of the question. There’s a chance it’ll work with smaller altcoins such as tezos, vechain and NEO, but given the low value of the coins, this isn’t going to bring you the big bucks (unless it goes up in value).
This is a popular method of making money and you may have heard of this one, too, as it’s also used with stocks and exchanging fiat currencies. The how-to is the same with cryptocurrencies: you buy currency then you attempt to sell it for a profit. However, this isn’t foolproof. Even with traditional stocks, there’s enough volatility to make it risky business for those who don’t know what they’re doing (but on the flip side, volatility creates potential profit).
Trading crypto is even riskier given it’s impossible to predict how a coin will perform one day to the next. Also, if you want to earn properly, you’ll have to treat it like a full-time job given you’ll need to constantly check how well or bad a coin is performing to get the best buying and selling prices. That being said, people do make a living from trading.
Working for a blockchain
There are many ways to do this. Tech-savvy ones include running master nodes, which is the computer that verifies blocks of transactions on the blockchain. There are others, too, like completing microtasks that can work for people who aren’t finance bros and software developers. A microtask can be something like marketing the coin or blockchain via a YouTube video or writing a review. They won’t set you up for life, but it’s not the worst idea for a side hustle. For those wanting full commitment, there are also actual jobs at these places, too, from blockchain development to PR.
Buy and #HODL
The clue is in the name with this one. You’ll do your research on which crypto coins you think are going to go up in value then you buy those coins and you #HODL. While this is a little bit of a slow burner, it is a tried and tested method that doesn’t require a huge amount of time or knowledge. Essentially, you’re betting on whether, for example, solana is going to increase in value over the next few months, years, maybe even decades. Ideally, you’ll want to be putting in a fair bit of research, and you’ll buy when the price has dropped a little, just for maximum profit (also known as buying the dip). But that’s about it. The days where the coin crashes slightly aren’t ideal, but the slow and steady increases over a long period of time will see you make a profit, is the hope.
Let’s look at this historically: if you bought £100 of bitcoin in February 2011, when it was worth a dollar, and you sat on it, you’d now have £4.6 million (based on the price of bitcoin at the time of writing), and that’s without interest. So it can work very well over a long period of time, but it can also flop if you back the wrong coins. Moonshots are an example of this going very well. A moonshot is when you find a very small coin and it increases exponentially in value. But this almost never happens.
Other ways to earn money from crypto
The list of ways of potentially earning from crypto is pretty endless. If we’re being pedantic, you could even ask to be paid for your job in crypto (those in charge might say no). Within the crypto universe, Yield Farming is an emerging way to make money. It works a little like accumulating interest in a fiat currency bank (as in, a normal bank). The more clued-up on the sector you get, the more likely you’ll find an opportunity that lines up with what you’re looking for. It’s a rapidly expanding area, after all. Just remember, it’s also a relatively new industry, and there are no guarantees of making big money from it. Do your research and be responsible.
Speak to a Financial Conduct Authority registered financial adviser before taking financial advice, and think carefully before making any decision.