A Brief History Of The Crypto Industry
The cryptocurrency industry has grown substantially since Satoshi Nakamoto published the original Bitcoin whitepaper in 2008. More than a decade later, most people are aware of the terms Bitcoin and cryptocurrency.
In 2017, at the peak of the interest in cryptocurrencies, How to buy BTC was the third-ranked How to Google search. While the market capitalisation of the crypto asset class has fluctuated wildly with price swings, it nevertheless increased from roughly $10bn in 2013 to $237bn by the end of 2019. Similarly, over the past five years, the growth in Bitcoin unique accounts and transactions has averaged nearly 60 per cent per year.
Since 2009, the crypto space has created its fair share of wealth for early adopters and investors. Some, like the Winklevoss twins or Changpeng Zhao, used their investment gains to build businesses in the crypto ecosystem. The Winklevoss twins, for instance, built the Gemini exchange, while Changpeng Zhao founded Binance, one of the largest cryptocurrency exchanges in the world.
There are plenty of other examples. Valery Vavilov used his early interest in blockchain technology to start a Bitcoin miner Bitfury. Today, the company also produces and sells hardware for Bitcoin mining and generates over $400m in revenues. Anthony Di Iorio financed some of the early development of the Ethereum blockchain and has since invested in other crypto projects like Qtum, Vechain and Zcash.
How Do Cryptocurrencies Work
When a new cryptocurrency transaction occurs, it gets added to a digital ledger of all other transactions on a decentralized network of computers called the blockchain. Computers or nodes of blockchain can have varying degrees of centralization and decentralization, and can be spread all across the world. Before a new transaction can be added to the blockchain, these nodes check the new data to be added or block, against each others records to verify it.
This makes the blockchain incredibly secure and virtually impossible to hack. If someone wanted to fake a transaction, theyd essentially need to hack 51% of the nodes in a network, which would be incredibly time consuming and expensive to ever be worth it.
Cryptocurrency Investment Strategy #: Airdrops
In simple terms, Airdrops gives you the ability to earn free coins. Airdrops are when a blockchain project distributes free coins or tokens to the crypto currency community.
The nice part about an Airdrop is that youre getting free coins without any investment. However, there is a caveat with that because usually to receive the airdrop you normally have to own a specific token already.
In the crypto community space, Airdrops are also known as crypto freebies.
The main purpose behind an Airdrop is to distribute crypto assets to people so that they start using them.
Lets now explore what is the other best way to invest in cryptocurrency.
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Index Funds & Buy And Hold
Yes, yes, yes. This is where Iâve found the most success.
In this section Iâm going to bring across a lot of learnings that I experienced in the real world.
Just like buying and selling stocks, itâs super hard to pick stocks. And itâs also very common to buy and sell at the worst time.
So how do investors try to solve this?
Two main things:
Letâs start with index funds.
An index fund is a type of mutual fund with a portfolio constructed to match or track the components of a financial , such as the Standard & Poor’s 500 Index . An index mutual fund is said to provide broad market exposure, low operating expenses and low portfolio turnover. These funds follow their benchmark index no matter the state of the markets.
Index funds are generally considered ideal core portfolio holdings for retirement accounts, such as individual retirement accounts and 401 accounts. Legendary investor Warren Buffett has recommended index funds as a haven for savings for the sunset years of life. Rather than picking out individual stocks for investment, he has said, it makes more sense for the average investor to buy all of the S& P 500 companies at the low cost an index fund offers.
So instead of investing your money into one stock which you think will go well, youâre investing in the top 500 companies in the S& P 500âs case.
This reduces your risk a lot.
This is super simplified but essentially the thought process behind it.
So how does this relate to crypto?
How To Buy Cryptocurrency On A Centralized Exchange
The exchange serves as one of the most critical functions in the crypto ecosystem. It basically acts as a portal between the fiat world and the crypto world the on-ramp if you will. Centralized exchanges help you buy Cryptocurrencies in exchange for fiat money . Coinbase is a perfect example of this kind of exchange. Coinbase lets you exchange your fiat for crypto with its easy to use app.
If youre wondering why you have to go through the lengthy and arduous process of signups and verifications to purchase crypto, the answer lies in the various Know Your Customer and Anti-Money Laundering laws that centralized exchanges are legally obligated to comply. Some exchanges avoid this process by simply not allowing you to deposit your fiat dollars into the exchange, and limit transactions to be between crypto-to-crypto, as opposed to the fiat-to-crypto that requires AML laws to be observed by the exchange.
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Arbitrage Between Crypto Assets
Arbitrage involves trading one cryptocurrency for another, or trading the same cryptocurrency on different exchanges. This method is preferred by people who are accustomed to day trading, and have an even higher appetite for risk than those who are simply day trading.
Being a hands-on trader reveals many imbalances in the market, and thus opportunities for profit each day.
For example, lets assume XYZ coin is priced at 10 on one exchange and at 11 on the second. A person could then buy ten XYZ coins on the first exchange at 100, transfer the coin to the second exchange, and then sell the cryptocurrency for 110.
The absolute gain would seem to be 10. However, transaction costs could eat away as much as 8 and leave investors with a profit of only 2.
This is similar to how investors play fiat currencies against each other in traditional currency markets.
There could be more complex routes, such as transferring value between three currencies on the same exchange, to end up with a larger quantity of the first currency. This is usually done when the value of newer cryptocurrencies rises or falls considerably within minutes.
Mining: Earn Money From Cryptocurrency
Buying and holding coins is one way we could make money, but can we earn money from cryptocurrency? The simple answer is yes, by becoming a crypto miner.
However, while this was an enticing way to earn coins in the past, mining has become big business in recent years with companies creating whole warehouses dedicated to earning coins.
Unless you have access to a purpose-built ASICs computing rig designed to solve the puzzles for the coin of your choice, your chances of verifying a block and earning a coin are slim with most altcoins and non-existent if you wanted to mine Bitcoin. Whats more, the electricity costs alone can outweigh any profit made. Work out your costings carefully before investing in any equipment.
Mining pools that allow miners to pool computing power can be a good alternative. Miners agree to share the block rewards in proportion to their contributed mining power, making it a good option if you have a graphics processing unit and can produce a steady income stream, depending on which coin you mine.
But there are other ways to make money with cryptocurrency. If you have some spare time, anything from 10 to 100 Satoshi ) can be earned through cryptocurrency faucet sites as a reward for playing games, clicking on links or watching adverts.
Whats more, if you are good at marketing, there are companies that will pay you in digital coins forcreating video content or infographics for cryptocurrency brands.
Read more: How bitcoin mining works
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Way#6 Help Out With Cryptocurrency Microtasks
If you have extra time, you can also do some small tasks for individuals or cryptocurrency platforms and get paid for it. The tasks can widely vary it could be apps testing, adverts viewing, taking surveys, watching videos, and more.
You can get microtasks from sites such as Bitcoins Rewards, Coinbucks, or Bituro.
Theres No Guaranteed Future
Even if you pick the right cryptocurrency, buy at the right time and plan on getting rich over the long term, that purchase doesnt come with the promise that the coins are going to be around forever.
Even Bitcoin, which is considered the most legitimate cryptocurrency, could potentially be banned, or at least highly regulated. Treasury Secretary Janet Yellen said earlier this year that the U.S. government may need to curtail the use of Bitcoin, adding that its mainly used for illicit financing.
Investments like this are just simply running on speculation any headlines of regulation will take the wind out of their sail, Horneman says. It will cause significant volatility across the board.
Hard as it is to believe right now, investors could also lose interest in cryptocurrency. Think of AOL, which was once hailed as the king of media but has since become something of a relic. And there are plenty of other examples too, from Betamax to minicomputers.
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Work For A Cryptocurrency Company
As crypto has expanded into the mainstream consciousness, so has the opportunity to work in the crypto industry. You could work for any of the hundreds of cryptocurrencies themselves, or for other companies or industries looking to take advantage of the crypto boom. In addition to developers, crypto companies need to hire for all the other roles of a growing business, including marketing, human resources, and cyber security.
Taking Advantage Of Affiliate Marketing
Another easy way to make money with Bitcoin is through affiliate marketing. A lot of companies use this type of marketing to bring in new customers. It also incentivizes existing users to bring their friends and family to the business as well. Youll see these types of incentives all over the market, but they differ from one another. Carefully study each one and choose which program you want to invest your time in.
Weve got our own Bitcoin affiliate program here at Paxful which gives you the best opportunity to make money with Bitcoin. Look into it and see if youd be down to try it.
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Day Trading Cryptocurrency How To Make $500/day With Consistency
Would you like to learn day trading cryptocurrency and make a consistent $500 per day? We often hear about all the money you can make by day trading stocks. But what about crypto day trading? In todays lesson, youll learn how to day trade cryptocurrency using our favorite crypto analysis tools.
Our team at Trading Strategy Guides is lucky to have over 50 years of combined day trading experience. Were going to share with you what it takes to day trade for a living, and hopefully, by the end of this trading guide, youll know if you have what it takes to succeed in this business.
First and foremost, when day trading, its essential to have a structured approach and a rule-based strategy. The same as swing trading or positional trading you are not going to trade every day, and youre not going to make money every day. So, you need a day trading cryptocurrency strategy to protect your balance.
The high volatility nature of Bitcoin and other cryptocurrencies has made the crypto market like a roller-coaster. This is the perfect environment for day trading because during the day youll have enough up and down swings to make a decent profit.
Moving forward, were going to teach you what you need to learn how to day trade cryptocurrency and were going to share some out-of-the-box rule-based day trading strategies.
Are Cryptocurrencies Legal
Theres no question that theyre legal in the United States, though China has essentially banned their use, and ultimately whether theyre legal depends on each individual country. Also be sure to consider how to protect yourself from fraudsters who see cryptocurrencies as an opportunity to bilk investors. As always, buyer beware.
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Day Trading And Scalping
A crypto day trading strategy allows the trader to take full advantage of cryptocurrency assets price volatility. As mentioned earlier, virtual assets are currently extremely volatile, which works to the advantage of a day trader.
The day trading strategy is a game of numbers strategy. A day trader will make multiple trades within a day, buying low and selling high within little gains that compound to large sums by the end of the day. Typically, sometimes it gets hard to perform this manually. To succeed in this strategy, you will need to consider automating your trades using trading applications or crypto trading bots like Coinrule.
Please note: It is not recommended that you begin your trading journey as a day trader. This is because this strategys fast-paced nature will require that you make fast decisions, and there is little room for research between trades.
Scalping is a part of day trading but typically involves concise trading periods. Think minutes.
When either day trading or scalping, many trades will result in both wins and losses. The idea is to make sure that the win/loss ratio is in your favor. Score more wins to consider your strategy a success.
How To Choose The Right Leverage
Your leverage choice should be somewhat based on how long you plan to keep the trade open.
If its going to be a very short trade, using 1 or 5-minute charts, higher leverage amounts like 10x and 25x may be suitable.
If its going to be a longer trade, more conservative leverage amounts of 2x or 4x could be better.
These are just guidelines, but while you’re getting started it may be best to follow them.
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Learn To Trade Futures
Several cryptocurrency futures exchanges will let you try your hand at trading futures contracts. This works in the form of a contract between buyer and seller that specifies the exchange of the underlying cryptocurrency asset at a predetermined price on a future date.
You can either go long or go short on futures. Going long means that you agree to buy the asset in the future, and going short means that you agree to sell it.
Futures trading can provide a way to make money trading cryptocurrency even in a bear market when the price of BTC falls.
If theyre right, they can make a profit when the price drops based on their prediction. If theyre wrong and the price rises, they must sell the underlying asset for a devalued price.
How To Responsibly Invest In Crypto
If you feel you need to scratch the crypto itch, you can make room for it in your portfolio alongside your stocks and bonds.
Bitcoin’s performance doesn’t appear to be directly correlated to stocks, and it’s helpful to have some assets do well while others tank. But, as Money has previously reported, the correlation rises during “bad times,” so you need to be careful about overexposing your portfolio to cryptocurrency.
Experts say you can allocate up to 5% of your overall wealth to riskier investments, like cryptocurrency. Just make sure you arent expecting to become a millionaire overnight, and that the money you put in is money you can risk losing.
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Faucets And Micro Tasks
Faucets are websites where you can get a minimal amount of cryptocurrency if you do some things. This is usually a captcha input and waiting for the timer, although the timer is not everywhere. After that, you will be given some digital money. Although most of the valves are of the same type, there are some differences that can be identified.
Size of Earnings
The most generous faucets are ready to give you a few Satoshi coins, up to 100 or more. From one visit to such a website, you will be able to get rich on ten or more coins, sometimes on 400-500. Is that a lot? To answer this question, it is worth specifying that 1 Bitcoin refers to 1 Satoshi as 100,000,000 relates to 1.
The price of 1 BTC was $10,500 USD. It is easy to calculate that when you receive a crane of 10,000 Satoshi, you will be more productive by only 1.05 dollars. And then only with a generous faucet, you can get 1,000 coins, its only 0.11 cents. As long as you earn one dollar, you will have to run around the Internet looking for faucets for new cryptocurrencies in 2020.
What Is Cryptocurrency
Cryptocurrency is a form of payment that can be exchanged online for goods and services. Many companies have issued their own currencies, often called tokens, and these can be traded specifically for the good or service that the company provides. Think of them as you would arcade tokens or casino chips. Youll need to exchange real currency for the cryptocurrency to access the good or service.
Cryptocurrencies work using a technology called blockchain. Blockchain is a decentralized technology spread across many computers that manages and records transactions. Part of the appeal of this technology is its security.
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