Olga Zeveleva
December 2017.
106

How do people earn profits from cryptocurrency?

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Today there are many ways to earn a profit from cryptocurrency, but not all of these are safe. You should weigh all the risks, and carefully plan your own limits. Most importantly, only spend money that you are not scared to lose.

Mining - this is the process through which new cryptocurrencies like bitcoin are released. The release of new currency is the result of solving computational puzzles and compiling recent transactions into blocks. In order to earn a profit through mining, you first need to invest into the technological equipment that corresponds with the cryptocurrency you want to release. The equipment will need constant upgrades and repairs. In addition, the creation of a mining farm requires a lot of energy. As a result, your mining project might take a very long time to turn a profit.

There is al alternative to standard mining, which is cloud mining. You buy power supply from other miners (www.genesis-mining.com; hashing24.com; https://hashflare.io) without investing in the equipment yourself. The prices for this vary, and you can also choose to mine several cryptocurrencies at once, which could allow you to turn a profit after just a few months. But you might also have to pay for part of the electric bill and a fee for taking out the cryptocurrency. This option is good for people who don't want to go into all the technical nuances of mining, or those who don't have a lot of money to invest from the beginning.

Buying cryptocurrency on the market - register on one of the cryptocurrency markets (https://www.coinhills.com/) and transfer money to it from your bank card or your cryptowallet, buy and sell cryptocurrency here, and gain profit from the price difference. When choosing a market, research which cryptocurrencies are traded there and what the transaction fees are - reading the user reviews would also be helpful. Your profit will depend on your own analytical work and luck. It is important to follow news about markets to figure out trends. But be aware that your market could be hacked, your the servers could be arrested.

Some cryptoraders go so far as to buy cryptocurrencies on one market, and sell them on a different market where prices are higher. The price difference could $100-200 for 1 bitcoin. For this kind of profit you have to ver very patient and attentive, as well as fast, so that the exchange rate of the cryptocurrency does not change while you are buying it on one market and transferring it to another.

If you are not ready to spend so much time trading, you might want to consider a kind of trust management where an organisation of cryptobrokers uses your money to play on the market and gives you part of the profit every day. But I have to warn you that this method is very risky and has some characteristics of a financial pyramid scheme.

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