Most of us get into cryptocurrencies to make money. But aside from holding or trading, what other options are there to profit from cryptocurrencies?
How to Earn Money From Cryptocurrency? 10 Simple Ways
Here are 10 old and new ways to make money using blockchain technology, ranked from easy to hard.
Disclaimer: This article uses many projects as examples. These are not endorsements. Do your own research before investing in them.
Cryptocurrency beginners
Watch ads with Brave browser
Brave browser is based on Google Chrome and has several cool features. It blocks annoying ads, trackers, and has a strong focus on privacy and security. On the other hand, it allows us to make money through our own ecosystem.
By (optional) watching privacy-preserving ads, we can earn BAT tokens, keep them in our wallet, and trade them to other cryptocurrencies on exchanges. How much BAT we can earn depends on how many ads we are willing to watch. To be honest, though, for most people, we probably don’t make much more money with this than beer money. I earn $5 a month at BAT.
Coins that can bring us interest or dividends
Some cryptocurrencies allow us to earn money in the form of interest as long as we keep them in our wallets. Here are 2 examples:
- NEO: Holding NEO allows us to accumulate NEO GAS (make sure to use the right wallet) and we can sell BTC on multiple exchanges. The annual rate of return is around 5%.
- KuCoin Token: KuCoin is a large cryptocurrency exchange launched in 2017. By holding KuCoin shares, we can receive a 50% dividend every day from the transaction fees generated by the exchange. This means that the more shares we hold, the greater our share of that 50%. The annual return depends on the given trading volume per day.
Get some airdrops
In order to attract more users, many projects distribute free encrypted assets in the form of airdrops. Typically, a single airdrop will not be worth more than a few dollars. But if a project grows well, even a small amount of crypto assets can turn into a substantial amount of money after a while.
Here are some websites that provide information on how to check for airdrops and how to participate in them:
Play DeFi Games to Earn Crypto Assets
The DeFi game is all about making money. Through the game, we can win things like land and clothing (skins) for the character in the game. These things come in the form of NFTs that we can sell to other players. A well-known example is the DeFi game Decentraland, where we can create, buy, and sell virtual property, art, and other things using the ecosystem’s currency, MANA. The crypto asset is tradable on all major exchanges.
Other popular games include Sandbox, Axie Infinity and Illuvium.
Some platforms allow users to post content and make money from it. This is usually done to allow users to vote on other people’s content, who then receive crypto assets from a pool. Well-known platforms are Steemit, Leo Finance and Publish0x.
How much money we make as content creators depends on many things. Earnings vary from a few cents to a few hundred dollars per article or post. The key influencing factors are the frequency with which the content is published, the weight of the users who rate the content, and of course the quality of the published content. One of the downsides is that adoption remains low.
Advanced player
Mining
While the proportion of Proof-of-Stake (PoS) cryptocurrencies has increased significantly, there are still many Proof-of-Work (PoW) cryptoassets that can be mined with relative ease.
However, this largely depends on the situation.
First, we have to decide whether we want to mine alone or join a pool. For many coins, mining alone only makes sense if we have a lot of money to buy the necessary equipment. In pool mining, several miners bundle their resources together and then get a corresponding share.
It is also important to think about which crypto asset you want to mine. We should make sure that this crypto asset is traded on major exchanges and is a legitimate project. We can mine hundreds of other cryptocurrencies. Therefore, careful research is necessary.
Staking Crypto Assets
Staking on a blockchain that uses a proof-of-stake (PoS) consensus algorithm is a great way to earn passive income. Usually, we only need to invest a small amount of crypto assets. For example, in order to run a node, we need to use 32 ether. But if we don’t have that much ether, we can also opt to join a staking pool and be rewarded with our share.
Since there are many PoS projects, we should go to stakingrewars.com to find out which crypto assets can be staked, what the annual returns are, etc.
There are different ways to stake our crypto assets.
- Binance is a practical option if we want to stake without any technical knowledge. Here’s how it works: users allow Binance to access their crypto assets stored on Binance for a period of time. Binance uses these coins to generate returns (such as through lending or for DeFi liquidity mining). This reward is distributed to users. Warning: Binance sometimes advertises ridiculous interest rates over 50%. These rates are for the day only. While Binance is one of the most convenient solutions, this variant also has drawbacks. Because with Binance, we cannot control our keys alone.
- A service provider like Allnodes is ideal if we want to run our own nodes and have more control over our assets, but don’t want to go through all the hassle of setting up our own hardware. Here is a very detailed video by Boxmining explaining how to setup ETH nodes on all nodes. The benefit of staking with Allnodes is that the rewards will be sent directly to a wallet where only we hold our own private key.
- For crypto assets like DOT, we can also stake through our Ledger hardware wallet. The advantage of this is that our crypto assets stay in our own wallet, safe and easy to operate.
Professional player
Become a liquidity provider
On a decentralized exchange, users can exchange crypto assets. For example, exchanging Ether to USDT. Liquidity providers lock their tokens in liquidity pools so that when users want to swap one token for another, there will be enough tokens. In return, liquidity providers receive a portion of the fees generated by all Swap transactions in return. This is proportional to the token share we provide to the pool.
However, this also has risks. It is important to choose a DEX that is a solid project to avoid being cheated or rug-pulled. Since the price of crypto assets in the pool is volatile, LPs may lose money (so-called impermanent loss). Therefore, it is best to choose a pool that is highly liquid and contains less volatile cryptoassets.
Staking LP tokens
As an LP, in addition to receiving part of the fee as a reward, we will also receive encrypted assets issued by the DeFi platform. Typically, the platform allows us to stake these tokens to earn additional interest.
Loan
We can lend our cryptocurrency to others on DeFi platforms like AAVE, compound interest and earn interest. Some professionals even take leveraged loans to make more profits.
