Cryptocurrency is unique in that it is an equal part of computer science, technology, and finance. Even if that sounds daunting, you shouldn’t let it intimidate you. Getting started is actually quite simple, and you don’t need to be an expert right away.
There are a few steps that you can take if you want to delve into the world of cryptocurrencies, and the first of those is to do your homework.
3 Ways To Earn From Cryptocurrency
1. Do your research
A thorough research before starting something new would always be in your favour. And while it’s a good thing to be able to understand how things like blockchains work, for beginners, it’s not a hard necessity. Just like buying things online, you don’t necessarily have to completely know everything about the product that you are buying. Similarly, even if you barely understand how banks and payment services work, it won’t necessarily stop you from being able to use money, and it likely won’t be able to stop you from getting into cryptocurrencies either.
If you plan to invest and earn from cryptos, there’s a lot of options in the market. However, it can be extremely challenging given the long list of cryptocurrency platforms in the market such as Bitcoin Motion. Most of these exchanges allow a learning process for newbies, which are ideal for first-time traders.
But still, what you need to understand here is that cryptocurrencies rely on blockchains, a digital network that acts as a public ledger of transactions.
Bitcoin is the largest and most popular currency at the moment. The transactions on the Bitcoin network are verified by ‘miners’, people who use specialized computers to process transactions. Once they have processed a certain amount of transactions, they are then rewarded with coins for Bitcoin or BTC. As long as the miners keep working for coins, the blockchain will continue to function.
In traditional finance, you would usually have a savings account where you could put your money in, but for cryptocurrencies, it’s different.
2. Look for a trusty crypto wallet
Once you start earning, you would also need a place to store your cryptos. Crypto wallets can either be a software wallet that is online or a hardware wallet that is offline and makes use of devices that act as a sort of flash drive containing your crypto holdings.
The main difference between the two is that software wallets are easier to recover than hardware wallets once you lose them. Hardware wallets are also prone to theft. However, because software wallets are hugely online, they become a target for cyber crimes and can be hacked like free pokies no download.
There is an option to just skip crypto wallets altogether by downloading an exchange application and connecting it to a bank account. The exchange will act in place of the wallet, and the assets that you have will be managed by the platform, which can possibly add some risk.
This system makes exchanges a target for hackers. From their perspective, once you hack into a large exchange platform, then you would have instant access to the thousands of wallets of the users in the platform.
If your only goal is to trade cryptocurrencies, then you will be fine with just searching for crypto exchange and a trusted digital wallet & cryptocurrency payment provider. However, there are some ways in which you can do something more with your cryptocurrency investments.
3. Understanding Decentralised Finance
Decentralised finance (also referred to as DeFi) refers to the system in which there are peer-to-peer finance tools that offer various products for people who have holdings in crypto, like interest accounts, loans, and advanced trading.
DeFi is labelled as a disruptive technology because it strays away from the methods of traditional finance and completely removes the middlemen from their financial processes. Because of this, a lot of people consider DeFi as a faster, more affordable, and most importantly, more transparent approach to finance.
When you put your crypto holdings in a savings protocol is very similar to putting your money inside a savings account. Just like banks and the interest they put on savings accounts, a savings protocol will pay you the interest in exchange for holding your crypto funds.