A Beginner’s Guide to The Best Ways To Earn Cryptocurrency
The introduction of cryptocurrency has led to great strides in the financial world. Foremost, e-commerce became even easier, with digital currency being one of the best payment methods. Additionally, crypto-assets like BTC and ETH have been a source of great wealth for many investors because of the positives of crypto market volatility.
As such, many people have been thinking about adopting crypto to make a living, but the crypto world’s complexities still hinder many. But how can anyone start earning cryptocurrency? What risks are there in the crypto world? Keep reading to find out more.
Get a Crypto Wallet
The first step towards any success in the crypto world is owning a crypto wallet. If you earn rewards in crypto at any point, you need to have a wallet to ensure the assets are safe.
Which is the best wallet for a beginner crypto user? Commonly, there are hot wallets and cold wallets.
According to crypto experts, cold wallets are way safer than hot wallets; therefore, you need to ensure you find the best cold wallet. Examples of cold wallets include the ledger and Trezor. The best hot wallets for beginners are Trust Wallet, Exodus wallet, Klever, or Atomic Wallet.
Identify the Method for Earning Crypto
Due to the vastness of the crypto world, there are increasing opportunities for earning crypto assets. Here are some of the ways you can make cryptocurrencies;
Crypto mining involves completing super complex computations, with the result being the release of new coins. It was first introduced in 2009 with the launch of Bitcoin, leveraging proof of work algorithms.
However, mining processes require supernormal investments, especially if you want to run your rig. Still, there is a cheaper option for mining, which does not require owning your rig, deemed us cloud mining.
Cloud mining involves purchasing some amount of hash power to be able to participate in crypto mining. It’s one of the cheapest, most successful mining methods. Among the best cloud mining sites include;
- IQ mining
- Crypto universe
Staking is the process of earning crypto rewards by collateralizing some amount of crypto assets and participating in block validation. Unlike mining, which uses proof of work mechanisms, staking leverages proof of stake algorithms in completing computations.
In staking, validators don’t work on complex computations; rather, they stake some amount of assets and get the opportunity to validate transactions leading to block release. Staking processes are quite simple, and most platforms choose to make autonomous systems to make systems work easier.
Since you have to hold assets to stake, you need to identify the right crypto exchange platform to get the assets. Binance and Coinbase have for long been thriving as exchange service providers.
Moreover, it would be best if you made the right staking pool platform choice. Here are some of the best platforms;
Yield farming, commonly known as liquidity mining, is a process where a crypto enthusiast earns income for providing liquidity to some Defi tokens. The user gets returns in the form of coins after offering liquidity to the ERC 20 tokens.
Among the best liquidity mining platforms include;
Bounties and Affiliate Programs
Bounties are primarily campaigns set by crypto platforms rewarding users for completing small predetermined tasks. For instance, bug bounties are placed to identify bugs in the platform’s website or software and receive coins.
On the other hand, affiliate programs are commissions given to platform users for inviting their friends using some referral codes. It’s an easy and cheap way of earning crypto.
Airdrops are just some amount of coins sent to individual wallets, and in return, the users advertise the platforms. Most crypto platforms choose to use this technique to promote, and sharp investors will earn an easy income.
Risks Associated with Earning Crypto
Several risks surround the various modes of earning passive crypto incomes. Foremost is the risk associated with lock-up periods. Many staking platforms and wallets instill lock-up periods, which should be hit before the money is withdrawn. Locking your funds up for a fixed amount of time renders your money illiquid.
Another common risk in crypto is the possibility of investing in unproductive assets. Currently, BTC, ETH, and few other assets are topping the lead. However, many others are cheap but have proven to be unreliable in the long run.
The blockchain world is at its infancy and, as such full of complications. If users are not careful, they can make errors that may lead them to lose their funds when trading. User error is a risk that every rookie crypto user faces.
Bugs are also a huge risk in the crypto world. Most bugs are caused by criminals, while others arise because of system errors. The selection of a poor platform will also lead to issues of bugs.
The recent developments in the crypto world have led to a surge in users, with many interested in earning cryptocurrencies. Although it’s not easy to earn cryptocurrency, especially as a rookie, the guidelines above will help you start well and make great strides as you move.
The first step to owning any crypto assets is identifying the right crypto wallet, and to many, cold wallets have proven to be the best choice. Secondly, you need to identify your model of earning assets. The identification of a mining method will help you know what to do. Finally, it would help if you considered the risks associated with earning in crypto. Considering risks will help you make the right decisions and earn well both in the short and long run.