Can You Get Rich on Crypto?
Cryptocurrencies enable secure online payments without the use of third-party intermediaries. Cryptocurrencies are proving to be the next big digital revolution, and they have seen their value soar in the past year alone.
The critical difference between regular currencies, like the dollar or yuan, and cryptocurrencies is that central banks or governments don’t control cryptocurrencies. They exist solely in computers with no ties to any country and no need for a bank. Because of this decentralization, experts believe cryptocurrencies will eventually replace most national currencies worldwide in one way or another. However, people still use The Pattern Trader that can assist you in formulating a decent income stream in cryptocurrencies; let’s check whether crypto can make you rich.
The profit potential of cryptocurrencies:
What makes cryptocurrencies such a valuable investment option is their volatile nature. It’s normal for cryptocurrency prices to swing 10% or even 20% in a single day. This volatility brings tremendous profit opportunities, allowing investors to buy low and sell high and go short on cryptocurrencies.
The following section is a list of ways you can earn money through investments in cryptocurrencies:
Trading cryptocurrency: Risk tolerance is the prominent key to trading and investing in cryptocurrencies, as the price swings can be upwards of 100%. Therefore, Crypto traders can choose to either buy or sell a currency at a specific price and pocket the difference if the asset moves in their favor. Some of these trading platforms include Coinbase, Bitfinex and Poloniex.
Mining: This process involves solving complex algorithms to validate transactions and adding them to a public ledger in return for cryptocurrencies as a reward from the network. The more miners verify a block, the higher their reward for doing so. Mining rigs are now being used as ASIC (application-specific integrated circuit) platforms that are much more efficient than regular CPUs.
Trading and investing in ICOs: Initial Coin Offerings (ICO) is another way for cryptocurrency investors to make money. The process involves issuing cryptocurrencies to investors and raising capital for projects without setting up a company. Coins are distributed by either mining or minting, though in the latter case, the coins will have to be pre-mined with proof-of-stake systems. Unfortunately, the cryptocurrency market has seen its fair share of scams and frauds where participants lose their money. However, the probability of getting rich through cryptocurrencies is still high.
Staking Cryptocurrencies: Once investors purchase cryptocurrencies, they might want to hold on to them to gain a passive income. Holding on to cryptocurrencies is like earning interest, but better. When you decide to stake your coins, you will be rewarded with a share of the blockchain network’s transaction fees and newly minted coins for supporting the network.
Staking cryptocurrencies involve locking up your cryptocurrency holdings for some time and earning some returns or interest that comes in the form of transaction fees and newly created coins, along with an increase in the value of your entire holding.
HODL cryptocurrencies: HOLDING differs from staking digital currencies and involves believing that rising asset prices will continue. HODLers believe digital coins will continue to rise in value despite large price fluctuations rather than selling when the price dips significantly.
HODL cryptocurrencies like bitcoin are not intended to be cashed out or sold during the price rise. Instead, they represent a long-term investment decision. It is similar to a sell-in-advance strategy for stocks or bonds, where you opt for a stock or bond with a long time horizon before selling it at drastic gains.
Create a cryptocurrency: Perhaps the easiest way to create a cryptocurrency is to use an existing open source code as your basis. Creators often use popular open-source software like Bitcoin, Bitcoin-QT and Ethereum. In addition, Launchpads can help you create an entire flash decentralized currency or token.
You can use one platform that allows you to issue cryptocurrency tokens without setting up a blockchain. For example, Ethereum tokens were created using this method, sometimes called ERC-20 tokens, after the process used to create them. You can create your own unique coin using smart contracts on a blockchain network. Other famous launch pads are the binance bright chain and Cardano.
Summary:
The main reason many investors are attracted to the cryptocurrency market is the unique profit potential in the form of a stable increase and high volatility. Cryptocurrencies are similar to investments such as stocks and bonds but with certain advantages that make them more attractive.
Investing in cryptocurrencies can be one of the best ways to earn money. Cryptocurrencies have advantages over fiat currency; they cannot be printed at will or controlled by any government or bank. Due to their decentralization and network regulation, cryptocurrencies have become a favorite investment option for users worldwide.
Read also: How to Build a Blockchain Game without the Biggest Fear
