Some times ago when I was new to the internet world I do see and hear a lot about this cryptocurrency which made me to start asking questions like, what is cryptocurrency. If you’re also asking such question today then you’re not a lone. I once did that also which has made me to reveal it to you through writing this article.
With the advancement in technology and increased knowledge of humans, many online opportunities keep popping each day. Most of these have been around for decades while some are still fresh to the internet world.
One of these legit means to make money online is through cryptocurrency which I’ll be explaining in this article. Do well to read to the end and also share your thoughts using the comment box below this page.
What is cryptocurrency?
Cryptocurrency is a decentralized, incognito and also a secured digital currency or medium of exchange that uses cryptography to secure online transactions and control the creation of new units of a particular cryptocurrency.
Being decentralized means it doesn’t have any central authority governing or issuing of new currencies. Cryptocurrency is not govern by any government or authority. You’ll come to understand it as we proceed in this article.
Being Incognito means it doesn’t require your personal details. Cryptocurrency doesn’t have anything to do with your privacy. Although some platforms may require your personal ID.
Cryptocurrency as a secured platform means your digital money is safe on the platform. Cryptocurrency is built on a platform that can’t be easily hacked.
With the above definition, cryptocurrency has gain a lot of audience in the previous years on both investment and as a medium of exchange. The life of many have changed through this platform.
Top five (5) cryptocurrencies to venture into
The following is a list of trending cryptocurrency you can leverage:
- Binance Coin
- USD Coin
You can purchase cryptocurrencies, such as Ethereum or Bitcoins through an online exchange, and then store them in a digital wallet.
What is a digital wallet?
A digital wallet is an app that stores your cryptocurrency for free. This application is available for both desktop and smartphone.
You need to set up your digital wallet before proceeding to buying cryptocurrency.
How to set up a digital wallet
To set up digital wallet is very simple. There are different digital wallet providers such as Coinbase.com. To set up your digital wallet, head to the website, download the app and follow the instructions that follows.
After downloading the app from coinbase.com, you’ll be required to provide your email address, preferred password, and a personal ID such as driver’s license.
Once you’ve provided the above information, you’ll now be asked to provide your credit card information.
Don’t worry yourself about the credit card details because it’s a secured platform that has been on existence for long now.
Now, visit any online exchange platform such as Coinbase.com, and purchase cryptocurrency.
Three (3) benefits of using a digital wallet in cryptocurrency
The following are the benefits of using a digital wallet in storing your cryptocurrency.
Security: Storing your cryptocurrency in your digital wallet, is much more secured than storing it in a bank.
Convenience: Digital wallet offers ease of use and convenience for purchasing goods and services from any business that allows it. Most businesses today prefer accepting in cryptocurrencies than physical cash.
Freedom: With digital wallet, you can store your money without going to the bank.
How to purchase cryptocurrency?
To purchase cryptocurrency, you need to first set up your digital wallet which I’ve guided you above.
Now head to an online exchange platform such as Coinbase.com, and purchase cryptocurrency using your credit card.
Benefits of purchasing cryptocurrency
- Cryptocurrency can be used in purchasing goods and services online
- Easy and quick to purchase
- Always available online
Blockchain and its benefits
A blockchain is a digital ledger of transactions that is available on computers around the world. The database is hosted by millions of computers at once.
Benefits of a blockchain
- A blockchainis secured and not always possible to alter with.
- A blockchain is an open, public ledger which means transactions carried out can be seen by anyone.
- It reduces the need for trust between parties, because it is a distributed, public ledger.
Differences between cryptocurrency and a blockchain-based token
Both are digital currencies using cryptography to secure transactions and control the creation of new units.
A cryptocurrency is a medium of exchange while a blockchain-based token is a digital token that represents a business’s stock.
A cryptocurrency is decentralized while A blockchain-based token is centralized, which means it can be issued or govern by a centralized authority.
A cryptocurrency is anonymous while A blockchain-based token is not anonymous, meaning your personal information must be provided to receive it.
A cryptocurrency is digital while blockchain-based token is not digital, which means it can’t be used to purchase for goods and services online.
How to Make Money through Cryptocurrency
Have you been wondering how one can make money through cryptocurrency? Worry no more as I’ll guide you on everything you need to know to start a second stream of income with cryptocurrencies.
Below are five (5) strategies on how you can start making money with cryptocurrency.
Just like the name implies, investing on cryptocurrency simply involves buying and holding crypto assets for some time. Crypto asset are volatile in the short term but have tremendous long term potential for growth.
To start investing, you need to identify will be around for the long period of time. Assets such as Bitcoin and Ethereum have been popularly known and has gain trust which shows a long-term price increase and can be considered a safe investment regarding this. Although there are others to invest in but the above listed two have been around for a long term.
Another means to make money through cryptocurrency is by trading. While investing is a long-term endeavour that involves buying and holding strategy, trading is a short-term opportunity. You don’t have to wait for a long term, with trading, you can trade your currency to earn more.
Trading Cryptocurrency requires proper analytical and technical skills in order to be successful. You’ll need to analyze the market charts on the performance of the listed assets, this will help you make accurate predictions regarding the increase or decrease of the asset price.
When trading, you can either choose to take a long or short position, depending on whether you expect the price to rise or fall.
Staking and Lending
I’m sure you understand the meaning of the aforementioned words. Staking in Cryptocurrency involves validating crypto transactions. This means you own coins but you don’t spend them, you lock the coins in a cryptocurrency wallet instead. In essence, you are lending coins to the network.
You can also choose to lend your coins to fellow investors and they pay back with interest.
Mining is where the value of a cryptocurrency is generated. This involves getting rewarded with new coins. Mining requires technical expertise and upfront investment in specialized hardware.
Airdrops and Forks
Airdrops and free tokens are distributed in order to generate awareness and to create a large user base for a project.
Not everyone who gets into the crypto industry makes a lot of money. It requires enough expertise and a little bit of luck.
In this article, I’ve shared with you what cryptocurrency is all about and how to make money through it. Do well to share your thoughts using the comment section below.
Thanks for reading!