Cryptocurrency: Things to Know Before Earning

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The growth of cryptocurrency capitalization was the beginning of a new gold rush. The number of people who wish they had invested in Bitcoin in 2011 is roughly equal to the number of those who dream of becoming a millionaire blogger. This is one of the reasons for the demand for “meme” coins, the presence of BTC as a means of payment at an online casino, the growth of fraud in this industry, and the number of crypto-rich people. But how to make a fortune on cryptocurrencies and actually invest in crypto?

What Cryptocurrencies Are and Who Earns From It

Bitcoin (BTC) appeared in 2009. BTC was supposed to become an anonymous, independent and safe payment means, a competitor of usual money. Bitcoin wasn’t just the first cryptocurrency; it laid the foundations of the industry. Among other things, it introduced the concepts of blockchain and mining.

Bitcoin triggered the emergence of thousands of other cryptocurrencies. According to CoinMarketCap, there are already more than 9,000. At the time of writing, the capitalization of the entire cryptocurrency market was $1.98 trillion, surpassing the $3 trillion mark in April 2021, when two major currencies – BTC and ETH – accounted for just over half – $1.8 trillion.

Initially, cryptocurrencies were of interest only to a small group of enthusiasts. With the growth of capitalization, the industry attracted a wide audience. Three groups can be distinguished among them according to their goals:

  • Earnings – entrepreneurs, investors, startups, miners.
  • Hype and curiosity – bloggers, aspiring entrepreneurs and people with no background who decided to figure out what was going on.
  • Illegal transactions – various criminals, drug dealers, hackers, darknet trading platforms who have found a reliable and secure system of settlement.

They triggered a veritable “gold rush. Its participants not only got rich, but also lost money.

States also became interested in the industry. A recent example is El Salvador. In September 2021, the state recognized bitcoin as an official currency. In China, the situation is reversed: last year, the authorities of this country banned operations with cryptocurrencies.

How to Get Rich on Crypto

Here are four legitimate ways to get rich on cryptocurrencies:

  • Become an investor – buy some amount of currency and wait for it to rise in value. But there’s a problem – buying already proven cryptocurrencies is expensive. So you have to look for cheaper cryptocurrencies and believe in their growth. That’s why they buy meme coins. For example, Dogecoin and Shiba Inu. The hype around them provoked the growth of the rate and made at least one person a millionaire.
  • Trading – buying and selling currencies, playing on the difference in the exchange rate. The situation is similar to the usual stock trading on the stock exchange. A trader needs to react quickly to the rate of coins and understand what is happening in the market. Without proper experience and knowledge, it is problematic to make money.
  • To mine a cryptocurrency is to participate in the issuance of a coin, help confirm transactions with it, and receive a fee for it. This option is objectively not the most affordable either. You will have to spend money to set up a crypto-farm. For it you need to buy video cards or, for example, in the case of BTC, these are ASIC miners. 
  • Release NFT works, collectibles or other assets to sell at auction. For example, 14-year-old Abigail, along with her brother Adam, created the NFT project Belugies of 8,000 unique images of whales. All of the tokens sold out in 10 hours. The creators of the project earned more than $1 million.

In general, it’s possible to make money on cryptocurrencies, but the risks often outweigh the potential profit. This doesn’t stop those wishing to get rich quickly.

How to Exchange Cryptocurrencies for Fiat Money

Let’s imagine that you are lucky and you own a cryptocurrency worth hundreds of thousands or millions of dollars. What do you do next? Alternatively, you can exchange some of your cryptocurrency for regular money through cryptocurrency exchanges. The most popular are Coinbase, Binance, and Gemini.

Exchanges can be centralized or decentralized. In the first case, the work is controlled by the administration, in the second, cryptocurrency owners can conduct transactions without the mediation of third parties.

A centralized exchange serves as a guarantor during a transaction and charges a commission for this. It holds the depositor’s money. On a decentralized exchange, the holder of the assets is the owner of the coin himself. He takes a risk because he can, for example, lose his access keys. Also, a decentralized exchange isn’t responsible for transactions.

None of the information on this website is investment or financial advice and does not necessarily reflect the views of CryptoMode or the author. CryptoMode is not responsible for any financial losses sustained by acting on information provided on this website by its authors or clients. Always conduct your research before making financial commitments, especially with third-party reviews, presales, and other opportunities.