5 Ways to Make Money Mining Cryptocurrency
For over a decade now, Bitcoin has gained much fame and respect among all the cryptocurrencies. It is one of the best performing digital currencies, with a trillion-dollar market cap. Big companies have invested vast sums of cash in the Bitcoin mining industry. But some equipment used to mine Bitcoins, like CPU, cannot take the challenge right now, with innovation like ASICs taking the cryptocurrency sector by storm.
But how can you monetize these crypto businesses and have a pie of the cake? Here are five ways to do so.
It’s essential to note that crypto mining involves solving complex cryptographic puzzles, where a block is added to a blockchain network through the hash power. It requires speed, so definitely ASIC miners & GPU miners are preferably the best.
Every additional block is recorded to a transactional ledger, where miners are rewarded with a token for their effort.
Crypto mining pays well, but it requires patience and consistency. Mining cryptocurrency in Canada has grown because investors have found a place to mine with low electricity costs and maximize profits.
2. Traditional Buy and Hold (HODLing)
This model is most preferably for people who are willing to make a long-term investment. They want to take chances and risks of the market volatility. Their mechanism involves buying large amounts of cryptocurrency assets and instead of selling them, they choose to hold, waiting for months to see if the prices have gone up. They will only re-sale these digital assets at a profit. Therefore if prices have gone down, they will keep holding.
Enterprising mining traders have since considered established cryptos like Ethereum, Litecoin, and Bitcoin for holding to sell the asset at a significant profit after months or years of HODLing. It is, however, advisable to learn of the assets description before buying to hold.
3. Day Trading with Crypto Coins and Tokens
This model is more of the opposite to Buy and Hold. A trader will be on the digital market, keeping an eye on the fluctuations and swinging of these asset prices.
They will want to close a day with even a tiny profit. So they will be actively buying and reselling throughout the day, as they are unwilling to put their monies into a long-term investment.
It is important to note; this method is the most riskiest as traders tend to lose the bet for being impatient and overly curious.
The staking model of making money entails earning little interest and fees on the coins. It doesn’t matter if the value of the assets changes.
It is a safer mode of making money from cryptos, though for a short period. Investors in this model will lend out coins; usually, Ether, from Ethereum at small interest, say 6% p.a.
Staking involves demonstrating a Proof-of-Stake mechanism protocol where others make transactions, but investors who have staked their holdings can validate them.
5. Airdrops and Forks
If you go first, you may often find a favorable token waiting, something you can use to buy a service or product. Alternatively, airdrops are free token rewarded for being first in a crypto project. They sometimes come as a surprise. You can trade an airdrop or use it to buy other things.
On the other hand, a blockchain may split, causing two or more chains. At this juncture, it is said to have ‘forked.” When a blockchain forks, it results in extra coins in a network which are given out as free tokens.