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What is Cryptocurrency?
Cryptocurrency is a type of digital currency that uses encryption to secure transactions. It is often digital. Think of it as digital money, but with a lot more security and technology behind it. Unlike regular money and currency, which is managed by banks and governments, cryptocurrencies are decentralized, meaning they’re controlled by networks of computers, not a single entity. This can feel intimidating at first, but once you get the basics of it, the opportunities are worth exploring and rewarding!
How Does Cryptocurrency Work?
Cryptocurrency operates on a technology called blockchain, which acts like a digital ledger where all transactions are recorded and performed. Every time you buy or sell crypto, the transaction is verified by other users on the network, making it highly transparent and secure. This structure means that while it's complex on the back end, it’s quite safe from fraud, and beginners can trust the system itself.
So in general, cryptocurrency works by performing transactions on a block chain (usually know as a layer one ), and it records it to.
Why You should Consider Earning with Cryptocurrency?
Cryptocurrency has many benefits, in fact, you could start crypto with just 10$, and over the times, you'll move to 4k$, it can also be as bad as moving from 100$ to 2$ too, that's why it's best you get informed and educated before doing crypto. Some of the reasons why you should consider crypto as a means of earning is because Cryptocurrencies offer unique ways to make money beyond traditional investments. With high potential returns, crypto markets are open 24/7, allowing you to invest, trade, and earn whenever it suits you. Furthermore, crypto trading offers flexibility in choosing strategies that match your time, interest, and risk management.
Potential Risks to Be Aware Of when doing crypto
Crypto markets are known for their volatility, meaning prices can swing up and down drastically and instantly. As exciting as high profits can be, the risk of losses is equally real and it cannot be avoided, rather it can be managed through real information and education.
Personally, I remember when I started trading early, without much knowledge, I used 100$ to bid a token, to buy, and after that, It was unknown to me that that token was only for a short while, and that caused me a very big loss.. The bottom line of the experience, is to try as much as you can to get as much information as you can before trading on any token!
Being mindful of potential scams, researching thoroughly, and only investing what you can afford to lose are essential and important to success.
The crypto space is filled with scams. Only use trusted exchanges, avoid too-good looking offers, and never share your private keys with anyone.
How to Get Started Earning with crypto (the best ways)!
1. Set Up a Crypto Wallet
A crypto wallet is your main platform to storing, sending, and receiving cryptocurrencies. Wallets can be software-based (online) like bybit, trust wallet, bitget or hardware-based (physical devices). Setting up a secure wallet is a must before buying crypto and earning crypto as it keeps your assets safe.
2. Choosing a Reliable Exchange
Exchanges are platforms where you can buy and sell cryptocurrencies. For beginners, it’s essential to choose a reliable exchange that is beginner-friendly, has a good base and background, has good customer support, and offers a variety of coins to choose from. Popular options include Binance, Coinbase, and Bybit.
Legit and best Ways to Earn income with Crypto as a Beginner (100% Guaranteed)
below are the best ways I have experienced to make money with crypto
1. Buying and Holding tokens (HODLing)
For beginners and newbies, one of the best and easiest ways to get started earning with crypto, is by purchasing cryptocurrency and holding onto it in the hope that its value will increase over time.
This strategy is known as HODL-ing, and it’s ideal if you’re interested in long-term gains without the hassle of frequent trading, for instance, you could easily purchase a certain token, at a very low price, and hodl it, with the aim and hope of it rising later, and earning from it.
2. Trading Cryptocurrency for Short-Term Profits
If you’re ready to proceed into active trading, short-term buying and selling can yield quick profits.
Many traders don't have the strength and capacity to hold a coin for too long, so some of them endulge in short term profit making too.
Trading requires more attention and learning, but with the right strategies, you can potentially make gains by taking advantage of daily price fluctuations.
3. Crypto Trading
This involves trading crypto currency using an exchange.
It involves trading, just like a normal market buying and selling, that's how crypto trading works too, it involves trading digital assets known as tokens, by placing orders.
Trading crypto's generally involves two types, spot trading and derivatives trading.
Spot trading; in crypto involves immediate buying and selling of crypto assets Spot trading and derivatives trading are two fundamental approaches in financial markets, each with distinct characteristics. In spot trading, assets like cryptocurrencies, stocks, or commodities are bought or sold for immediate delivery and settlement at the current market price. This straightforward approach means traders own the asset once the trade is completed. It’s generally less risky than derivatives because there’s no leverage, and gains or losses depend on the asset's actual price movement.
Derivatives Trading: Derivatives trading involves contracts that derive their value from the performance of an underlying asset. These include futures, options, and perpetual contracts, allowing traders to speculate on an asset's price without owning it directly. Derivatives trading often includes leverage, which can amplify both profits and losses, making it more complex and riskier than spot trading.
Both trading types offer unique benefits depending on a trader's risk management and strategy: spot trading is suited for straightforward asset acquisition, and usually instant and immediate, while derivatives are often favored for speculation and hedging, and also long term trading.
If you want to get started with crypto trading, you could start with exchanges like binance, bybit, bitget, or even mexc exchange.
Always do a little and detailed research before starting.
N/B; trading can be risky, as a beginner, I advise that you start with small amounts, and also manage your risks well, to avoid loosing what you can't be able to loose .
Most importantly, always use what you can afford to loose!!
4. Staking
Another of one of the most legit ways to earn with crypto, is the staking.
Staking involves holders of a coin on proof of stake block chains to earn some income by locking up some of their assets to help secure the network.
It generally involves locking a portion of your assets to earn a portion of the rewards, just like, keeping your money In the bank, and earning interests, not exactly the same, but it uses that kind of logic.
To earn with staking , you have to use some proof of stake (PoS) coins like Ethereum (ETH), Cardano (ADA), Tezos (XTZ) and polkadot (Dot), then you use them with exchanges offering staking services with no technical setup, like bybit, bitget, etc.
Earning by staking is mostly monthly or annually, and a coin can yield you up to 5-20% annual returns by staking.
5. Crypto Savings Accounts
Like staking, crypto saving accounts, involves depositing some of your stable coins (e.g USDT) and receiving some returns for just depositing it on there platform.
For beginners looking for less volatility and less risk, saving with stablecoins (like USDT, USDC) is an excellent way to earn predictable returns.
Some Platforms like BlockFi or Nexo provide options for earning interest on crypto holdings. I always advice you do research too.
6. Airdrops and Bounties
Airdrops and bounty's are also of the best legit ways to earn crypto for free.
Airdrops are free distributions of a new cryptocurrency to existing holders. This method is used to promote new projects and can be a way for beginners to accumulate crypto without investing capital.
They generally involves supporting a project by performing some basic tasks, subscribing to basic telegram channels, following the channels on various platforms, and showing your user engagement.
Learn more about top telegram airdrops and there listing dates here;
As beginners, I urge you as well as advise you to only join airdrops from verified sources and don't fall to scam tokens too. Don't share your private keys or personal info unless you are assured it is legit.
7. Crypto Affiliate Programs
Also, as part of airdrops, you can earn crypto legally by also referring other users to some projects, airdrops, and other things too, and get crypto as rewards. Not just airdrops, you can earn crypto from affiliate rewards using platforms like bybit, binance, bitget, and other platforms, who reward you a commission for referring users to them, usually once the new user you invited has deposited to their platform. Commissions could range from 5% to even 50% per referral.
Like I said earlier, you have to make sure it is legit, and only do tasks from verified sources.
8. Yield Farming and Liquidity Mining
You can also earn crypto as a complete beginner and newbie by doing yield farming and liquidity mining too.
Decentralized Finance (DeFi) platforms offer users a way to earn interest by lending their assets to liquidity pools. These pools are essential for enabling decentralized exchanges, lending protocols, and other DeFi applications. It works like this;
- Liquidity Pools: In DeFi, liquidity pools are smart contracts where users deposit assets to create a collective reserve of funds. These pools are typically made up of pairs of tokens, like ETH/USDC, to support trading and lending without a central intermediary. Sounds complicated right??, let me explain; it is like a money pot (for instance) where a lot of people put their money or crypto assets, and this assets can be accessible by people who want to borrow or trade with the assets. Traders earn with these technique, when people trade with the money they have "pooled" together. Great commission can be earned using this technique, but as usual, in anything relating to crypto, their are great risks too.
- Earning Interest (Yield farming): In return for lending your assets, liquidity pools earn interest, which is often paid in the form of additional tokens or fees collected from those who borrow or trade with the money you put in the pot (money In the pot is just used for easier understanding). The interest rate depends on factors like demand, the liquidity pool’s size (that's the size of money pooled), and the platform’s mechanics. Higher demand for a particular asset often means higher yields for traders.
Take note that; while DeFi lending can be profitable, it does come with risks; For instance, when your pooled assets is volatile, after a trader borrows it and trades with it, since it's volatile, it could drop in price before you receive your rewards. In other words, you could lend or give out your crypto through liquidity pools at 100$ worth of a coin, and after it's used for trade and returned, it may not be worth up to that amount again. And also, High market volatility can impact both asset values and interest rates.
Platforms like Aave, Compound, and Uniswap are popular for lending and earning interest. Aave and Compound focus on lending and borrowing, while Uniswap and other decentralized exchanges (DEXs) offer liquidity pool rewards.
9. Earn crypto as a beginner with NFTs (Non-Fungible Tokens)
NFTs are unique digital items that can be bought, sold, or traded, with ownership verified on the blockchain. They can include digital art, music, pictures or collectibles.
As a beginner, you can earn with NFTs by Creating, selling, or even flipping NFTs. Platforms like OpenSea and Rarible provide marketplaces for beginners to get started in NFTs trading.
Like every other way of earning legit and free crypto as a beginner, NFTs also have their own risks too, and it is important to get a good knowledge before getting started with NFTs, and there goes the saying, no risk, no reward!
10. Crypto Mining
Mining is a process of validating transactions and earning huge rewards before a token is listed. It can be done on telegram, or even done on the official apps of the tokens that you'd be mining.
It could also be in form of social farming using X(Twitter) too.
For beginners, cloud mining is better, as it involves little or no initial capital to get started.
Like every other method of earning free crypto, crypto mining is also risky as scam projects are on the rise!
As a beginner, you can try out 1, some or all of the best ways to earn crypto I have just talked on, but most importantly, manage tour risks, avoid scams projects by doing research too.
Conclusion
Each of the best ways of earning with crypto requires understanding and caution. I recommend you as a beginner to start with lower-risk methods like staking or crypto savings, although all the methods of earning free crypto are all risky since crypto is very volatile. Starting with small, manageable amounts and gradually exploring different methods is a good way to ensure sustainable earnings and lesser risks. Staying informed and flexible will help you navigate the evolving crypto world. By starting small, staying informed, and being cautious, you can gradually build a profitable crypto portfolio and lifetime income source from crypto!
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Frequently Asked Questions (FAQs) on the best ways to earn with crypto
1. How much money do I need to start with crypto?
I won't say a specific amount, but as a beginner, You can start with as little as $10 on most exchanges. Always do your own research, and endeavor to be sure to manage your risks before starting!
2. Is crypto earning taxable?
Yes, in most countries, crypto earnings are subject to tax regulations, although I don't think that applies in Nigeria.
3. What is the safest way to store cryptocurrency?
Hardware wallets are the safest option for long-term storage.
trust wallets, metamask, exchanges, are all great options. But make sure to keep your private keys and your secret phrase intact, as without them, you won't be able to access your crypto wallet if it gets lost.
4. Can I lose money doing crypto trading?
Yes, definitely. Crypto is volatile, and there’s always a risk of loss. In fact without proper research and knowledge of crypto, their would be more loss and more risks too, hence I advise to always carry out research on crypto projects before taking action.
5.What’s the best strategy for beginners?
In my opinion, the best strategies for beginners to earn with crypto are to start with small amounts, do your own research, and try out different earning methods.