We are all looking for alternative opportunities. The pandemic has taught us that it’s always handy to have different sources of income, you never know what life has in store for you! Apart from this I am sure we all want to work for our financial freedom. So let’s jump into the Cryptoverse and see what it has in store for us.
Like any stock or commodity, crypto can be traded. Trading is the exchange of one item for another, in this case coins or tokens. Generally the buyer looks for an opportunity to buy the coin at a lower price using his skills of analysis and then in turn sells at a higher price. The difference between the selling and buying price will amount to the profit(or loss). For Example-You buy 100 coins ‘x’ at ₹98 each and after a while the price rises up to ₹100, you sell them. Profit = ₹100X(100-98) = ₹200. Note-You may incur a loss also in the same way if the price drops. How can you start trading ? You can open an account in any leading exchange like CoinDCX, complete the KYC details and start trading.
Now often people get confused between Investing and Trading. So let’s clear this confusion first.Investment is for long term whereas trading is for a short term. In trading you buy and sell coins for a very short term ranging from a few minutes, hours, days or months to gain profits, it’s more like a business. Whereas investing is building your wealth, making your savings grow. Investment is for the long term for a few years to a decade. Once you invest your money in a coin, you just HODL it. 😉 Imagine investing a few dollars of your savings in Bitcoin in its early days during 2011-13 and holding it till date. Your savings of a few dollars would be worth millions. That’s the power of investing.🤑
Crypto Mining is the process of solving complex mathematical problems to verify transactions. It is done with the help of high configuration computers. The problems are such complex that they cannot be done by human brains and are taxing for high end computers as well. The miners verify that the transactions are accurate and are not duplicated. They are in turn rewarded in crypto for verifying the transactions. You can easily start mining by investing in GPU rigs and make a small mining station. There is an interesting story about 2 Indian kids who make $30k a month mining crypto in their garage. Note- Mining consumes high amount of electricity and may also lower the life of your computer. You need to educate yourself about the same before you start.
It is another method of “consensus mechanism” – validating transactions. If a cryptocurrency has a staking feature, you can put your coins in the staking pool and in turn earn a percentage reward on it. The Blockchain uses the staked coins to validate the transactions and prevent any attacks to the network. The advantage of staking over mining is that you need not solve complex equations and hence consumes no energy. It is also to be noted that staking generally involves a lock-in period, so after you put your coins into the pool you will not be able to withdraw them until the duration is over.
It is generally seen that the price of a coin is lower on one exchange and higher on another. This is because of various factors majorly being liquidity of the coin on the particular exchange. Crypto Arbitrage is buying a coin on one exchange at a lower price and selling it on another for a higher price. For example if you buy 1 Bitcoin for 55k on an exchange ‘X’ and sell it for 55.3k on another exchange ‘Y’, you make $300. (There are withdrawal and deposit charges also involved, this is just gross profit. Also this is just an ideal example, in reality the profits are not so high.)
New crypto projects and startups offer and giveaway their tokens for free to numerous people or addresses. They list out a few tasks like following or re-sharing their posts, tag a few friends on social media, which you need to complete in order to be eligible for the rewards. This is generally done for community building and spreading awareness. You can easily hunt out for these and get tokens for free. Please note that some air-drops may even be scams so do not give out your private keys or any personal information in greed of a few tokens.
Are you an artist, painter, portrait maker, sketcher, etc. Or even if you are into music or create videos, graphics or memes, you can sell your work by creating an NFT. NFT or Non fungible token is data stored on the Blockchain which cannot be duplicated. They are revolutionizing the world of art. Not only this NFTs also provide opportunities in the world of gaming. After an initial investment of buying in game tokens, you can earn more tokens by playing and competing. These tokens can be in turn exchanged for fiat on exchanges. Many people turned to these play to earn games during the covid lockdown.
Crypto Exchanges are looking to diversify and increase their customer base. One of the commonly used mode is through affiliate marketing. The exchanges offer incentives or comission on referrals. If you have a big friendlist or a group, you can share your referral link and ask your friends to join. It maybe a one time payment or you may even earn each time your referral transacts on the exchange (a percentage of the transaction fees). This can be a good income opportunity if you have contacts with big buying power.
Note all the above opportunities are subject to high market risks. Cryptocurrencies are highly volatile in nature. Due diligence and proper analysis is required before you jump into any opportunities above. The above blog is only for educational purpose and is not intended for investment advice.