Alternative investments have been gaining popularity recently, becoming an opportunity for many groups to diversify their sources of income, earn passive income and protect their capital from inflation and economic crisis. A wide range of investors are betting on cryptocurrencies, among other things.
Can investing in crypto be profitable? How to make money on cryptocurrencies and where to buy them? You will read about it in today’s text.
Cryptocurrencies – what are virtual currencies?
Cryptocurrencies are financial products that first appeared in 2009, with the entry of Bitcoin into the market. The number of available cryptocurrencies of different types is constantly increasing, and each of them differs slightly in its properties and specifics of operation.
In a general sense, cryptocurrencies are decentralized digital currencies that use cryptography to provide security for transactions and users. They are based on blockchain technology, which is a chain of blocks, allowing transactions to be carried out in a peer-to-peer model . This means that all interconnected devices (computers) have the same permissions and perform the same functions, without the supervision of a central entity.
Originally, cryptocurrencies were conceived as virtual means of payment, increasing the convenience and security of making transactions, such as in e-commerce. Over time, however, their great potential as an investment product, which can generate considerable profits, was recognized.
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Different ways to make money on cryptocurrencies
Earning from cryptocurrencies can take various forms. The basic method is the standard investment, i.e. buying and holding your digital assets for several years until they reach a satisfactory level of growth.
However, there are other solutions that allow you to make profits in the shorter term. Among the most popular are:
- trading – trading cryptocurrencies according to short-term trends based on market analysis done by yourself, by a broker or with the help of automation tools, such as the trading bot from EazyBot.pl.
- mining – for digging up cryptocurrencies, computers with high computing power are used, allowing to “create” new cryptocurrencies, including, for example, Bitcoin.
- staking – leaving and locking cryptocurrencies in one’s possession for the purpose of operating the blockchain network and confirming transactions, for which one receives rewards.
- airdrop – earning rewards for performing simple tasks, such as sharing social media posts.
Each strategy allows you to make profits at different levels. Some of them do not require much capital to start or are even free (airdrop), with others it is necessary to invest funds.
Where to buy cryptocurrencies?
If we are to allocate the funds we have for cryptocurrency investments, it is necessary to acquire digital assets. How to do this? You can use a number of available tools for this purpose.
The most popular solution is, of course, cryptocurrency exchanges, where it is possible to buy and sell various digital currencies, using other cryptocurrencies or fiat currencies. Bitomats, available in many Polish cities, are also increasingly being used to buy or sell cryptocurrencies. Their mode of operation is similar to that of traditional ATMs, allowing for the quick exchange of a specific amount of money for a chosen cryptocurrency or vice versa. Finally, there is still the option to buy or sell digital money in cryptocurrency exchange offices.
Investing in cryptocurrencies – do you have to sacrifice a lot of money to make money?
Many people think that earning from cryptocurrencies requires big funds to start. Nothing could be further from the truth. If you’re wondering how much you need to invest in cryptocurrencies, we rush to answer – it’s actually possible to make profits without a large initial capital. Of course, smaller funds mean a relatively small passive income. However, you always need to carefully determine your preferences, the size of your portfolio and the potential risks that come with any investment, including those in cryptocurrencies.
Investing in cryptocurrencies – a way to make money?
Earning money on cryptocurrencies is entirely possible, but it requires time and knowledge. You also need to carefully define your idea of action, in order to choose the right strategy, tailored to your individual capabilities. All the time you should also maintain common sense. Then the chance of success increases.
The above article is not investment advice. All information and data and studies contained in okbr.pl are for informational or statistical purposes. Therefore, they cannot be treated as an encouragement to make a selected investment decision. Nor can they be treated as investment advice or a binding assessment of the investment market or any other financial instrument. Any investment decisions made by a user of the okbr.pl portal are made at the user’s own risk and responsibility. The information contained on the website does not constitute a recommendation and investment advice within the meaning of (art.42 section 1 and art.76) of the Act of July 29, 2005 on investment advice (Journal of Laws 2005 No. 183 item 1538, as amended).
