Digital money enthusiasts often ask questions like “How can you make a living off cryptocurrency?” You probably found this article because you have a similar question on your mind. Congratulations, the answer you seek is here! Read this guide to discover the secrets of living off crypto interest.
What is Cryptocurrency Exactly?
Cryptocurrency is a digital currency that exists on a blockchain and uses cryptography, or codes, to secure transactions. It is a decentralised currency that is neither issued nor controlled by any central bank. Cryptocurrency is also called “crypto”, “token,” or “digital coin.” Crypto is different from electronic money (e-money) in that the latter is fiat currency in digital form.
How it Works
Any person serious about knowing how to make money with cryptocurrency, or crypto, as it is sometimes called, must start the learning process by getting an understanding of how it works. So, how does crypto work? Cryptocurrency operates on a digitally distributed ledger called a blockchain, which is available for public use 24/7 online and is not under the control of any government agency or monetary authorities.
Blockchain is the database technology that is used to maintain a record of cryptocurrency transactions and ensure that the information is securely distributed across an online peer-to-peer network of computers. It organises information into groups of data called “blocks.” And as new blocks are added to the ledger, a chain is created. Now you know the origin of its name.
The use of cryptocurrency is made possible by diverse participants worldwide who play different roles that keep the market functioning. Without them, it would be a waste of time to learn how to make money with crypto. The major players in the crypto industry are:
- Miners who invest in powerful equipment with which they verify crypto payments and create new digital coins.
- Exchanges that allow people to make crypto transactions by accessing their online trading platforms via mobile apps, digital wallets, or web applications.
- Traders who buy and sell crypto on exchanges and make conversions between fiat money and digital tokens.
So, these crypto participants create changes in crypto supply and demand that affect the availability and prices of different cryptocurrencies on the market. They make profits from selling digital tokens when their prices go up because demand is higher than supply, or when crypto gains value from other activities, such as a celebrity’s promotion of a coin.
Most Popular Coins
It is not possible to know how to make money in cryptocurrency without being aware of the most common types of cryptocurrency in the world. At present, there are more than 18,000 cryptocurrencies on the market. However, the most popular digital coins by which many people are living off crypto interest include the following:
- Bitcoin (BTC)—created in 2009; currently held by over 100 million people; trading at around US$29,500 (or €27,800) per BTC as of May 2022.
- Ether or Ethereum (ETH)—launched in 2015; currently used by over 10 million people; trading at around US$1,900 (or €1,800) per ETH as of May 2022.
- Binance Coin (BNB)—launched in 2017; currently held by about 1.1 million people; trading at around US$311 (or €295) per BNB as of May 2022.
- Litecoin (LTC)—released in 2011; (number of users unavailable); trading at around US$70 (or €66) per LTC as of May 2022.
- Tether (USDT)—launched in 2014; (number of users unavailable); trading at around US$1 (or €0.95) per USDT as of May 2022.
- Cardano (ADA)—founded in 2017; currently used by over 3 million people; trading at around US$0.53 (or €0.50) per ADA as of May 2022.
- Other popular cryptocurrencies include Dogecoin (DOGE), Stellar (XLM), Polkadot (DOT), Bitcoin Cash, Stellar (XLM), Dogecoin (DOGE), and Monero (XMR).
Is it Safe?
Yes, trading and investing in crypto is safe. However, it is very risky. This is because the prices of cryptocurrencies change frequently and easily on the market. Cryptocurrencies belong to a very volatile class of assets. This situation can help you to make a lot of money from your crypto investment if the value suddenly goes up. But it could also lead to a huge loss if the reverse happens. Also, the cryptocurrency market is largely unregulated, and newcomers could easily get scammed by fraudsters. Nevertheless, if you follow this guide on how to make a living off crypto, you will discover a good way to trade and invest safely.
Benefits and Risks
Before you start investing in crypto, you may want to know why you should consider this option instead of stocks or traditional fiat currencies (banknotes). Here are the benefits and risks in connection with cryptocurrency.
Can You Make a Living Off Cryptocurrency?
Absolutely yes! You can make a living with crypto like many others are doing today. But their successes come from knowing and understanding how to make a living off cryptocurrency. So, you too can succeed if you correctly do day-to-day trading to earn money frequently.
How to Make Money on Cryptocurrency
Now, let us show you how to make money on crypto platforms and exchanges like Coinbase and Binance. Such online platforms allow you to trade and invest in Bitcoin and other digital tokens if you complete their simple account registration processes. So, to accept our guidance on how to make money in crypto, try to do some of the following:
How to make money on cryptocurrency? Trade in digital coins! Due to the high volatility of the crypto market, you could do short-term trades, exchange cryptocurrencies, convert crypto to fiat money and fiat to crypto, and make some money in the process. This requires having strong analytical and technical skills, as well as being able to smartly predict how prices will change on the market.
If you do not yet have a coin, use your local currency, such as USD or EUR, to purchase a certain number of tokens on a crypto exchange market. Most exchanges accept many payment methods to make it easy for their customers to trade.
This strategy is important when it comes to how to make money cryptocurrency in the long-term: investing in digital assets, practising financial discipline, and growing rich with time. Even though the value of cryptocurrency can change a lot in the short-term, when you buy and hold your crypto asset for a long period of time, it usually grows into a really large amount of money. But in this regard, you should try to invest in only assets that are more stable than others, such as Bitcoin and Ether.
Staking and Lending
One method of validating crypto transactions is by staking. This means holding or locking your coins in a cryptocurrency wallet instead of spending them. Your coins can then be used by a Proof of Stake network or other investors to validate transactions. They will pay you for letting them use your locked crypto—an act that is considered lending to them. So, your reward can be likened to the interest a bank pays you for keeping a credit balance.
Crypto Social Media
Are you good at content creation or copywriting? It is also how to make money with cryptocurrency today. You can write or create content for many social media platforms that are blockchain-based. While most of them would like to pay you in their cryptocurrencies, some would pay you in fiat money.
Mining crypto is another practical way to answer the question: how do you make money with cryptocurrency? You can be rewarded with new coins if you mine a cryptocurrency by confirming transactions that were made using it. This process requires using advanced computing skills to solve cryptographic or complex mathematical equations. You will compete with other miners and try to be the first to verify and validate the transaction so that you can be paid a share of it. However, to do crypto mining, you need to have already invested in specialised hardware. You would also need to have the technical expertise to do it.
Airdrops and Free Tokens
To build a large user base for a project, a crypto exchange might launch an airdrop. Also, when developers wish to support their new coins, they use airdrops. In other words, they provide a free token to encourage adoption. You can acquire a free currency by participating in an airdrop, which you may then invest or use to trade or buy things. So this point supports our positive reply to the question: Can you make a living off cryptocurrency?
Long-term and Short-term Investment
A method that is used to hold an asset for more than a year is known as long-term investment. It allows investors to be “passive” in the buying and selling of cryptocurrencies through a buy-and-hold approach. Long-term investors expect the value of their cryptocurrencies to increase in the future. They use strategies such as value investing, growth investing, and dividend investing to buy cryptocurrencies at cheap rates, invest in companies with high growth prospects, and invest in dividend-paying firms, respectively.
On the other hand, short-term investment is used to hold crypto for no more than a year. Those who participate in this kind of investment are called short-term investors or “active” traders. They trade in crypto assets several times daily, monthly, or yearly and want to quickly make gains from their investments. Hence, they use strategies such as scalping (trading many times in a day), day trading (gathering small profits), and swing trading (investing from a few days to a few months).
Understanding that cryptocurrencies are good for short-term and long-term investing is how to live off crypto investments. There are coins for the short term, say within a day or a few weeks, and those that perform better in the long term. Therefore, choose thoughtfully according to your expectations about the prices of cryptocurrencies. Bitcoin works for any duration of investment.
Why try to Make Money on Crypto
Having answered the question, “Can you make a living off of cryptocurrency?” earlier in the article, we will now tell you why you should make money on crypto. The main reasons include:
- Cryptocurrencies are decentralised; no government can inflate their prices.
- You can use it as passive income and gain a lot from it if the value goes up.
- With stablecoins, which have relatively fixed prices over time, you can invest in crypto as a store of value of some kind.
- Crypto is an important aspect of future technology and payment infrastructure.
Spheres of Use
Cryptocurrency is not yet globally recognised as a legal tender. Nonetheless, there are several businesses that accept it as a payment method, and the list is expanding. They include merchants in various industries such as aviation, hotels and travelling, e-commerce, food and drinks, telecommunication, non-profit organisations, automobile, and online services to mention but a few.
Here is a list of things you can use cryptocurrencies to pay for today:
- Tourism and Airline tickets: You can use Bitcoin and other cryptocurrencies to make payments when travelling or participating in a tourist experience. For example, the Kessler Collection—a luxury hotel group in the United States—accepts payments in cryptocurrencies from international travellers. Also, Travala.com, which is an online travelling agency backed by Binance, accepts about 40 cryuptocurrencies from its customers. Besides, you can use your Bitcoin to buy airline tickets when you book your flights through booking services like Airbaltic, Flight Centre, Cryptoturismo, and others. You can also use a crypto wallet and payment gateway like BitPay to buy a gift card from Delta Airlines and pay with your cryptocurrency.
- Gift cards: You can use a crypto wallet to buy Amazon gift cards with which you can pay for anything on Amazon. You can also use it to buy other gift cards, not only that of Amazon.
- Apple products: From Macbooks to iPads, you can use a crypto wallet to buy a Walmart gift card, which you can then use to pay for any Apple product.
- Online games: There are many online casinos that support payments via crypto wallets and cards thanks to crypto-friendly operators. You can use Bitcoin, Ethereum, or any accepted cryptocurrency to make deposits as well as place bets as you play fantastic games at some online casinos.
- Cars: From utilitarian vehicles like Subarus to luxury cars like Lamborghinis, you can purchase your car using Bitcoin or any other cryptocurrency that your dealer accepts.
- Microsoft products: You can use Bitcoin to pay for products that are available on the Microsoft store. You can buy apps, games, and other digital content.
- Jewelry and luxury watches: BitDials is an online luxury retailer that allows its customers to use cryptocurrencies to pay for Rolex, Phillippe, and other expensive watches. There are other crypto-friendly luxury goods manufacturers and retailers.
- Insurance: Several insurance companies, including the Swiss insurer AXA, now accept payments in Bitcoin and other cryptocurrencies.
- News media: Generally, you can pay for subscriptions to crypto media outlets using a variety of cryptocurrencies. Still, some non-crypto media outlets like the Chicago Sun-Times accept subscription payments with cryptocurrencies.
- Food and drinks: You can use Bitcoin to buy fine wine online at BTC Wine, and pay for a cup of coffee at Starbucks. Burger Kings, an international fast-food company, also accepts payment in Bitcoin, Ethereum and Dogecoin.
Crypto Processing Made Easy With Baxity
With Baxity, you can process your crypto payments in an easy and secure way. Our payment gateway enables 100% anonymous transactions via the Dark Wing technology, which combines VPN and Tor encryption to make your crypto literally invisible. Also, to prevent your accounts from being linked to each other, a separate account is used to pay the funds transfer commission. For more details about cryptoprocessing integration with Baxity, please, follow this link.
Our top crypto-processing features include the following:
- Free trial
- Hosting of funds on the client’s server
- Risk level checking
- Crypto quarantine
- Installation of multiple brands at once
- Different tariffs for everyone
- Suitable crypto payment gateway for everyone (including small businesses)
Frequently Asked Questions
What is cryptocurrency exactly?
A cryptocurrency is a digital currency that runs on a blockchain and secures transactions through cryptography. It is a decentralised currency that is neither issued nor regulated by a central bank. However, some countries require cryptocurrency holders to pay tax on income made from investing in it.
Is cryptocurrency electronic money?
Cryptocurrency is a digital currency, but it is not electronic money. Bitcoin and other cryptocurrencies are different from e-money because the latter is linked to a fiat currency or banknote and is controlled by a digital banking system under a government-owned monetary agency like a central bank.
Can you make a living off cryptocurrency?
Yes, cryptocurrency can be used to make money. Although most cryptocurrencies are very risky because of their high volatility, trading in crypto is still an answer to how to make money with cryptocurrency.
How to make money on cryptocurrency?
You can make money on cryptocurrency by trading digital coins, investing in crypto assets, staking and lending digital tokens, creating content for crypto social media, mining cryptocurrency, and participating in airdrops and free tokens. You can find reviews of these terms and other crypto-related concepts in the text above.