Saturday, March 7, 2020

Best ways to earn money with cryptocurrency in 2020

Making money with cryptocurrency is possible. Many analysts say that the time of digital money is gone since BTC fell to $10,000 in 2019, which is 2 times less than its price in 2017. However, this fact is not enough to draw any conclusions.


This has already happened, and more than once. For example, in 2014, BTC fell from $1100 to $500. Many people said it was the end of Bitcoin. However, in 2017, it hit $20,000 with the capitalization of $320 billion.
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Bitcoin price graph (2013–2019) according to CoinMarketCap
It is possible to make money with cryptocurrency, but only if it brings evident benefits. We will not cover any fraudulent schemes in this article. On the contrary, the methods presented below are legal and transparent; they allow you to earn money yourself and benefit the community as well. This is always the most profitable and efficient tactics in the long-term business.

Trading

This is the most difficult, but also the most profitable way to make money with digital currencies. The main idea of trading on a crypto exchange is simple – buy a coin at a lower price, sell it at a higher one. This way, by virtue of millions of traders around the world, market coin prices are being formed.
The most difficult part of trading is finding the right moment to buy or sell. It is impossible to predict accurately which direction the price will head. However, if you analyze all the available statistical data, evaluate the market situation and understand the importance of a particular technology in the crypto industry, your chances to predict the direction of the chart will be growing.
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User interface of crypto exchange p2pb2b
All this requires a professional approach and special knowledge. Newcomers usually can choose between learning to analyze the data by themselves or hiring a personal advisor. The latter will be rational only if the funds for trading are large enough. If you just try to guess the change in the price of a coin, you will most likely end up losing money.

Holding and rent

Some coins go up on their own. The economic essence of this phenomenon is that the issue of cryptocurrencies is different from the issue of ordinary money. There are coins that are constantly being issued – for instance, Ethereum. In such systems, the creation of each transaction block comes with a reward (the coins that were not in circulation). Hence, their total amount is not limited.
A different approach is implemented in Bitcoin. For the creation of a block, the system generates a reward as well, but every 4 years its amount is reduced. Eventually, the emission will cease when the number of BTC in circulation hits 21 million. After that point, miners will receive only user commissions.
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In addition to Bitcoin, the creators of Dash, Ethereum Classic, NEO, IOTA and many other coins have implemented such a scheme in their projects. These coins exist in limited quantities, so they will begin to rise in price eventually. That is why it makes sense to hold them in cold wallets – autonomous products for secure offline storage of cryptocurrencies.

Mining

Cryptocurrencies are independent because of miners. This is the main idea behind the blockchain technology:
  • Transactions form blocks
  • Miners have to calculate a hash code (key) for each block
  • The first one to find the key puts the block into the blockchain
After that, all the transactions in the block are completed. The miner receives a reward from the network and a commission.
Calculating the key requires a lot of computing power. It is usually provided by GPU or application-specific integrated circuit (ASIC). ASICs are more expensive, but much more powerful, for they were created specifically for mining. By connecting your device to a pool (a union of miners), you can start calculating the key and getting your rewards.

IEO and bounty

IEO stands for Initial Exchange Offering. This process implies that a previously private coin appears on the market for public sale for the first time. Users can buy it, and creators receive funding from sales. Depending on demand, this process forms the coin price.
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IEO announcements on p2pb2b
Most projects start raising money before IEO. This allows creators to receive funds for development. First investors receive coins at a lower price so that later they can benefit from its growth. Since the rate depends on demand, creators and investors are trying to promote a coin by all means.
A bounty program helps with that. It is a project promotion campaign. IEO creators give away coins to bloggers, translators, commentators and other people who help make the coin better known. The types of work that will be rewarded are indicated in the conditions of each particular campaign. Thereby, it is possible to earn cryptocurrency without investments by performing simple tasks.

Referral programs

All referral programs are based on one common idea: a user brings new customers and receives bonuses for them. In the crypto industry, this works the same way. Yet instead of bonuses, companies pay with digital coins (tokens). This is one of the popular ways to earn cryptocurrency since it also does not require any investments.
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Referral tab on p2pb2b
The best way to find a referral program is by joining crypto exchanges. Scam (i.e. fraudulent) projects appear almost every day, so you should choose your exchange very carefully.

Conclusion

Holding and trading can be the best choice for those who already have funds and knowledge in the crypto industry. Beginners and newcomers are most likely going to fail here and should proceed with preparations and care. This also concerns IEO – you should not invest in a project without thoroughly studying and analyzing it.
For those who are just starting to learn how the crypto industry works, the best ways to make money will be mining (if you can afford the resources, of course), bounties and referral programs. All of this will allow you to understand exactly what is happening in the crypto world. In addition, the risk of losing money won't be so high.
Prashant Rawal
Prashant Rawal

I’m a freelance full-stack web developer having over 8 years of experience in WordPress development. I am also Blogger and Affiliate Manager to help people starting their money making blogs using largest affiliate networks.

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