How to make money in cryptocurrency?
Here are some examples of all of the ways on how to make money with cryptocurrency. Remember this is not to be taken as investment advice, but is for informational purposes only. Consult a professional that is not trying to sell you an investment.
1.) Buy and Hodling Coins
This is the safest way to hold your coins. Coins are relatively cheap. The masses of people have not adopted cryptocurrency fully yet, but they will be nudged to transition into cryptocurrency in the new economy.
There is a currency reset that is taking places and eventually the masses will need to turn their paper fiat currency in to exchange for cryptocurrency. The government is transitioning to the lightning network, interest rate system from libor to sonja and they will be shifting from fiat paper to digital. Therefore, the buying low and hodling until the adoption of critical mass can cause the value of coins to rise significantly.
If the government transitions the debt into cryptocurrency, then this is the way that you can estimate what coins can be worth. The key to investing in cryptocurrency is to research the technology of the coins and not to listen to hype or speculation of prices. IF YOU HEAR ANYONE SPECULATING ABOUT VALUE AMOUNTS OR POSTING PRICING, THEN THIS SHOWS THAT THEY DO NOT KNOW WHAT THEY ARE TALKING ABOUT AND YOU SHOULD STAY FAR AWAY FROM THEM.
2.) Day Trading Cryptocurrency
Here are exchanges:
What is day trading?
You can buy Companies, currencies and cryptocurrency on a public exchange. People can go on these exchanges to purchase a paper security that gives ownership in a company, commodity, or a basket of companies in a fund issued in a stock. These same people can purchase certificates in bonds or digital currency in cryptocurrency on an exchange.
The day trader can make money purchasing these paper securitized assets, bonds or digital currency on an exchange for a profit. The day trader can buy/sell these positions to make money on a trade. The buy position is holding the trade until it increases for a profit. The sell position is holding the trade until it loses value to sell for profit based on the amount that it fell as the profit.
What methods are used for trading, but only technical apply in cryptocurrency?
Analysis is the process by which we take the best information available to us at that time to critically think through to come to a logical conclusion on trading choices about how a stock will perform. The problem with analysis is that you can be wrong. The point is that it is all speculation with an enormous amount of manipulation involved. The analysis about technical can apply to trading cryptocurrency, but nothing else. The rest is used to show you an example of needing knowledge to trade markets.
The markets are volatile and volumes run that volatility. The earning, news, announcements, taxes, interest rate hikes, hedge funds and algorithms can manipulate volatility on prices.
The charts are used for technical analysis of a stock. These charts show patterns and moving averages. The charts are used to show resistance to tops and bottoms that bounce or break through eventually.
The patterns usually have a head and shoulders on each side to show the patterns. The charts with all of these points show trends that are run by volume. These things together can create a strategy to be indicators of when to trade, buy, sell or not trade.
There are different kinds of charts to use for analysis. There are line, bar and candlestick charts. I used all of them together on multiple screens for indicators.
The fundamental analysis is analyzing the assets and liabilities statements of a company. The assets, liabilities, earnings and cash flow of a company are fundamentals. There is qualitative and quantitative data to look into a company problems, trends and public opinion that affect valuations. This is to see if a stock is cheap or expensive based on the fundamentals.
There are market booms and busts. There is a correction every 4 to 6 years on record since 1891. These corrections are from bubbles. There are 30 year cycles for commodities and real estate.
The generation charts track spending based on the size of the generation for consumer spending. This is important because of spending for houses, college and car loans means that business is profitable and markets price is expensive. The ages of the population in a country affects economy.
The aging population means that the economy is stagnated and markets low. When the age group of people in a country is young, then there is spending and markets become valuable. The baby boomer generation was the largest and they are retiring. They are not going to be spending.
The markets will be low. The next generations are smaller. There will be less spending and lower markets in the future in America.
Australia has a lot of millennial age group and that market will rise in the future. The point is that there is a lot to understand about day trading. You better know what you are doing or you will lose all of your money.
There are cycles with currency. A reserve currency only lasts for 40 years. The Brits had the reserve currency from the 1930’s to 1970’s.
The United States became the reserve currency when we tied oil to the Dollar in 1971. We are in the process of a currency reset. There was a cover of the economist magazine from 1980 showing a new currency with the date 2018 on the cover. It resembled cryptocurrency. I saw that magazine for the first time in 2000.
One thing to understand is that the 1800’s belonged to Great Britain. The 1900’s belonged to the United States. The 2,000’s belong to Asia.
How is trading cryptocurrency compared to stocks?
How you trade cryptocurrency is the same as trading a stock. One thing to understand is the volatility levels in cryptocurrency. On coin market cap there is a link for market losers and gainers. There are coins that rise 80%. What this means is that you can lose serious values in a day of trading cryptocurrency. You can lose 100% of your value in a day.
What are the risks trading cryptocurrency?
You should understand what the risks are with trading cryptocurrency. Obviously, day trading can be profitable and people have retired early day trading. The percentage of people that are successful trading is around 5%. This means that there is great risk and a 95% likelihood of losing.
The question is: Is day trading the right thing for you as a strategy? Only you can answer that question for yourself by doing your own research and consulting licensed professionals.
I saw the risks through my experience as a currency day trader. My eyes were opened slowly to great manipulation in markets. I day traded the stock market in 2000. There were a group of about 20 of us that were trading.
Everyone started with small amounts and brought accounts up to $50,000. We all lost our money over time. We learned that there must be a strategy to trading or eventually you will lose all of your money.
I would not trade again until 2008. I was a day trader for currencies for over a year. There were good trades and terrible trades with forex trading. What was the manipulation that I saw as a trader?
I would watch the analysis charts live for 10 hours at a time with a coffee pot on side of the computer. My eyes caught on a few occasions’ spikes to finalize in history without the spike recoded. Therefore, I felt like I could not trust the technical analysis history as a gauge for tops and bottoms forecasting.
The real risk is the manipulation of the markets comes through purchases of hedge funds. These funds shifts around billions of dollars in a trade. This affects a stock price and can cause people to run to a trend to lose a lot of money in the dump.
There is another risk of algorithms to manipulate stocks. A person can place an order and the algorithm anticipated the order. The algorithm orders before that person’s order is placed and resells to that person for a profit.
The computers with the algorithms are located in offices in the same buildings as the exchanges. They order before orders reach the exchange to reorder that order for profit. This is a continuous manipulation of stock purchases every second.
There is hypothecation of stock. This is the same stock being sold over and over to multiple people. These are similar situations in cryptocurrency trading.
I see people trading cryptocurrency offering advice to people about trading cryptocurrency and they do not know what they are talking about.
Cryptocurrency is speculation about prices. Anyone that forecasts prices of cryptocurrency shows that they do not know what they are talking about. You should not listen to even one word that they tell you. It can cost you all of your money.
Avoid them and mark them as know nothing gurus. Stay away from speculators. Cryptocurrency is volatile and could rise and fall 100% in the same week.
No one can speculate on price with volatility like this and know what they are talking about as an expert. Beware! You can lose all of your money trading.
What you need to trade?
You will need to open an account with Coinbase to exchange your Dollars into cryptocurrency like Bitcoin, Etherium or Litecoin. Once you exchange into one of these three coins, then you can trade. Here are some options for trading:
3.) Trading bots
There are trading bots that you can set up through advanced method to perform trades for you. What are trading bots? They are a software that uses API’s to pull in necessary data to aggregate to perform buy and sell orders on your behalf.
The bots are programmed to analyze data, trends, pricing, volume and perform trades. The bots are set up for you to specify specific preferences for trades and when indicators line with your programmed preferences the trades are performed. You can tweak those criteria to perform better.
You need to understand sandbagging. You can find yourself with dozens of trades open at once. As trades are closed, it executes other trades. Keep your eye on that to manage amount of open trades. Here are some platforms and bots to use:
4.) Options, futures or margin: (Risky)
The binary options are trading where you do not own coins, but you can set a price to buy or sell the option over a set period of time. You receive payment entering the option, only if it is performed. If it is not performed, then you lose your money.
5.) Crypto coins that pay dividends
Dividends are great strategy for investors, because they can be used to reinvest for more coins or for income as cash flow. Dividends are a percentage of profits paid quarterly to shareholders in this case coin holders.
What is a direct dividend paying coin or token? The direct dividend paying coin or token pays with profit. What is an indirect dividend paying coin or token? The indirect dividend paying coins are from the buybacks and then to destroy the repurchased coins.
6.) Staking coins
There are three things to understand about staking without getting technical or losing you. There is proof of work, proof of stake and Delegated proof of stake. You can make money in all three methods, but you must understand how they all work before you commit your money.
Proof of work is external work outside of the system, where you use computer equipment, electricity like in Bitcoin. It is costly and time consuming. You are committing capital by locking it up in the eternal system using electricity and hardware that is costly. If your block is right and beats out the other block, then you get coin and share in fees. If someone else gets it, then you lose out. There is competition in Bitcoin mining and the amount of electricity used each year can power Ireland for a year.
The proof of stake is committing to locking up your coin in the system internally to verify security of the block chain over a line of blocks. You get coins back with fees for verification, but if it is not verified you lose your coins.
The delegated proof of stake trusts your coin to another combined to represent you for a share in the fee for verification of validity of the block or lose your coins for no verification.
Master nodes are chunks of specific coins in a digital wallet on a computer through a virtual private network. The master node has a real time ledger of every transaction on that block in that wallet. Master nodes serves the block chain.
The master node serves the network and the nodes serve miners to create coins. Master nodes keep transactions private; enable instant transactions and acts as the treasury of that block chain. These master nodes communicate between nodes and other master nodes along various block chain networks.
The master node has voting for projects and governs with rewards. Master nodes cost money to run and are rewarded with fees (coins) every 24 hours or less. The prerequisite of running a master node is to stake your coins to run the master node.
This ensures stability in the block chain running correctly. You are invested in it run correctly or your coins devalued for not running correctly. If you take coins out early, then the master node no longer works. This can be lucrative. The master node is a proof of stake and proof of work of sorts with your stake in the master node. Here are requirements for each masternode: https://masternodes.online.
How do you start a masternode?
There are no quick ways to wealth and you should be awake with your eyes of your understanding opened with knowledge to run a master node. You must be aware of the great returns of unstable coins that are pump and dump to pick your pockets when they dump it and run with your cash.
There are plenty of master node schemes. Know your coin with realistic returns of 5% to 20%. You should know a little bit about code to run a master node.
Each altcoin has developers that you can consult about setting up a master node. You may need to go to GitHub.
1.) You will need to purchase the required amount of coins for the collateral and extra for fees.
2.) You will need that coin crypto wallet on your server. You should use a virtual private server with your own IP Address.
3.) Send your coins to that wallet.
4.) Follow the set up node for your wallet from the developer.
5.) Set up your master node and configure it.
8.) Cryptocurrency interest
Cryptocurrency for interest is one of the ways that people are making money. The problem with this method is the amount of return that they are promising investors is unrealistic. There are offers for 1% every 24 hours.
These returns are only available in Ponzi schemes and pyramid schemes. Bitconnect was an example of this kind of return that flopped. There are real returns that you can rely on like 5% to 10% yearly.
9.) Cryptocurrency arbitrage
Cryptocurrency arbitrage is buying low on one exchange and sell for a profit on another exchange. The exchanges from country to country vary in price. Regulation from country to country coming to agreement will change this in the future. There are four classifications of cryptocurrency globally that causes the varying in pricing.
This is incentive provided by developers in a network to offer incentives like coins for downloading software or for other tasks. These coins are usually set aside for these tasks from developer’s coins. EOS does this and you should use the wallet of that coin with a separate email address from your other wallets. This can be a hard forks split of a coin into two coins or a soft fork like Bitcoin going to Bitcoin cash.
The bounties are rewards for sharing about one of these companies on social media. You get rewarded when it launches. Here is one service to find out when there are bounties.
12.) Cryptocurrency lending
Cryptocurrency lending is a way to lend your cryptocurrency for percentage return on your cryptocurrency. There are a lot of companies that you cannot trust. There is no regulation yet.
Be careful and research companies to protect your coins. Salt hold your cryptocurrency until the loan is paid back and then release your currency to you with your return.
13.) Cryptocurrency faucets
Cryptocurrency faucets are microtasks of a gig like taking a survey, playing games, watching videos, click for coins or trying a product for rewards. You can get cryptocurrency of your choice in some cases or the cryptocurrency of a platform that you are performing the microtasks. You can perform a microtask where you are from your phone. Here are some websites with microtasks: Faucethub.io.
Cryptokitties is an example that slowed down the network of Etherium network that it run on spending I Million Dollars for crytpokitties in the first 24 hours.
16.) Cryptocurrency mining
Here is how some people mine cryptocurrency. Cryptocurrency mining requires hardware and enormous amount of electricity to mine Bitcoin. It is like a race to who establishes a block first to get rewarded. The cost to mine every 24 hours uses enough to run Morocco.
The amount of electricity used each year is the amount of electricity to run Ireland, so governments like China picked up mining in warehouses. This is not something that the average person should try to mine. There are other coins that are cheaper to mine.
There are shared mining, cloud mining and mobile mining. You should research that the people running it will not take your coins or reward. There are scams and people avoid electricity bills of 1.5 million dollars like in Sweden recently.
In the past Bitcoin mining was profitable. The average cost for equipment and electricity can take 24 months for you to break even. The average PC will not work anymore and you need specific hardware that is costly to mine. The hardware can be technical and pools can be a way to mine.
You can compare mining of coins to see what can be profitable: whattomine.com.
There is cloud mining with the option to rent mining equipment and purchase hash power for profit. You do not need any equipment. Here are some cloud services.
17.) Cryptocurrency mobile mining
There are options to mine using your smart phone. You can use the CPU on your phone for money. Here is one service allowing that option.
18.) Cryptocurrency browser mining
There are options to use Google Chrome to mine coins. You can use tools for chrome. Here are some options.
19.) Network Support
This allows you to rent out your hard drive for space. It allows you to rent out your CPU power in a network for their coins. Here are some.
20.) Crypto jacking
How to invest in cryptocurrency?
Here is how people invest in cryptocurrency. Cryptocurrency initial coin offerings is like initial public offering that raise money for a company when they go public. The ICO is uses this method to raise capital. The ICO was a great way to make money in cryptocurrency.
There was billions of dollars raised in 2017 with ICO’s. The result was over a thousand ICO launches. There were scams defrauding people. Pump and dumps causing people to lose money.
There is over saturation of ICO’s with hundreds to choose for making profit. The governments around the globe are regulating ICO’s. You must be an accredited investor to invest in ICO now.
22.) Cryptocurrency investment funds
Cryptocurrency investment funds are ways that people are in cryptocurrency. There is not regulation to protect consumers yet. Some countries are for it like Malta and others ban it like China.
The United States rejected three proposals for an ETF. You should research before you invest in something unregulated. You lose, and then you lose.
These funds are for mining, initial token offerings, pre ICO and ICO offerings.
23.) Tax defer 401k coins
You can set up a tax deferred 401k for your cryptocurrency. You cannot use the coins for personal use. They must stay in the account that is approved through the 401k.
How to earn or work for cryptocurrency?
24.) Blog, vblogging or Commenting for crypto coins
Here is how people earn cryptocurrency. There are services that will pay you with coins to post articles and comment on those articles. There are platforms that pay you with coins for watching or posting videos. These are some of the services.
25.) Accept cryptocurrency for merchant payments
Cryptocurrency services allow you to accept coins as a method of payment. You can sell products for coins. You can create a website that solves a problem in exchange for coins. Write a book to sell on the website for coins. Here is one service.
26.) Trading goods
There is a service like craigslist that you can sell products. You list and sell for coins. Here is a service.
27.) Affiliate marketing
There are services that you can recommend for coins. You tell others about the service with a link for rewards. This is some services.
You should stay away from this one.