On January 3rd, 2009 Bitcoin was created by an individual or a group known as Satoshi Nakamoto, and their identity remains a mystery today.
The first recorded price of Bitcoin in a transaction occurred on October 5, 2009, when an individual named NewLibertyStandard conducted a trade, selling 5,050 Bitcoins for $5.02. This transaction established an initial exchange rate of approximately $0.001 per Bitcoin.
Fast forward to today, 1 Bitcoin is valued at $26,526 after reaching an all-time high of $65,000 on June 18, 2023. And a lot of people who purchased and hold their Bitcoins achieved financial freedom.
For instance, Erik Finman is a well-known figure in the cryptocurrency
world who became a millionaire at a young age through his investment in Bitcoin.
In 2011, at the age of 12, Erik Finman invested $1,000 his grandmother gave him into Bitcoin. He purchased a significant number of Bitcoins when their price was relatively low. Over time, as the value of Bitcoin increased significantly, Finman’s investment grew exponentially.
In 2013, when Erik Finman was just 15 years old, the price of Bitcoin reached a high point, and his Bitcoin holdings were worth around $100,000. Recognizing the potential of Bitcoin, he decided to sell his Bitcoins and use the proceeds to start his own business.
Now, in this era where there have been so many modern upgrades in the crypto world, there are several ways to make money with cryptocurrencies.
In this article, we are going to outline the easiest way to earn money with crypto.
What is Cryptocurrency
Cryptocurrency can be referred to as digital or virtual money that uses cryptography to secure financial transactions, control the creation of new units, and verify the transfer of assets. They are decentralized and operate on a distributed ledger technology called a blockchain.
A key factor to know about cryptocurrencies is that they are not issued or regulated by any central authority, such as a government or central bank, making them a high-risk venture.
5 Ways to Make Money With Cryptocurrency
Here are the easiest ways to make money with cryptocurrency. Kindly bookmark this page for later, as we will add more ways as soon as we discover them.
Buy and Hold
Buy and Hold is one of the oldest and easiest ways to make money with cryptocurrency. All you need to do is buy a certain amount of crypto coins or tokens and hold them for the long term.
Just as Erik Finman bought and held $1000 worth of Bitcoin in 2011 and held onto it for 2 years to get over $100,000 you too can do the same.
There are several coins and tokens with great potential that you can buy now and hold to be able to make significant returns in a few years’ time. However, it’s advisable to do your due diligence before investing in a coin or token.
In staking, you have to lock up your crypto assets to receive dividends or interest. Imagine running a fixed deposit account with a bank, of which they give you interest on the money you have deposited with them within a certain time.
That’s exactly how staking works, you lock up your funds in the staking pool for a certain period of time, and you will get rewarded depending on the percentage agreed.
This is a way of earning passive income i.e. having your money work for you. But then, it also has its drawbacks due to impermanent loss that may arise due to the volatile nature of cryptocurrencies.
Mining is one of the oldest ways to make money with cryptocurrencies and it varies with the protocol used.
For instance, to mine Bitcoin, you will need to have sophisticated mining rigs and machines to do the computation works, while you received BTC commission for every transaction you process, due to the fact that Bitcoin uses a proof of work consensus system (PoW)
While in terms of mining Ethereum, you don’t need sophisticated machinery, you only need to stake a certain amount of ETH to either become a Validator or a Delegator, and then you get rewarded for helping the entire ethereum ecosystem, due to the fact that Ethereum operates in a proof of stake consensus system (PoS).
So mining varies, and with a proper understanding of the crypto you intend to mine, you can make a lot of money through mining.
Borrowing and Lending
With the advent of the “Smart contract,” you can be able to borrow or lend in crypto. When you borrow you pay interest, and when you lend, you earn interest.
Just as in the traditional finance system where banks give loans and earn interest, using defi lending and borrowing protocols like Aave, Benqi, and others, you will be able to lend your crypto assets and earn interest on them.
Trading is one of the fastest and easiest ways to make money with cryptocurrency, it involves you buying a coin when the price is low, and selling off when the price is high. It’s of importance to have the knowledge of trading before venturing into it, this is to know the nitty gritty around the ecosystem.
You can either be a day trader, swing trader, or long-term holder depending on the trading strategy you want to employ and whichever works best for you.
However, the end goal of trading is to buy low and sell high, and to achieve this you will need to conduct some form of analysis, like fundamental, technical, and sentimental so that you will be able to make informed trading decisions.
The world of cryptocurrency offers numerous opportunities for you to make money and achieve financial independence. From buying and holding promising coins to staking, mining, borrowing, lending, and trading, there are various avenues to explore.
However, it’s crucial to remember that the crypto market is highly volatile, requiring careful research, risk management, and informed decision-making. By understanding the potential risks and rewards, individuals can navigate the crypto space and potentially benefit from its transformative power. As stated before above, it’s of importance to have the knowledge of trading before venturing into it, this is to know the nitty gritty around the ecosystem.