Cryptocurrency is digital cash. While it can be traded for goods and services, the most popular use case for countries is as a store of value for metaverse games, like a currency. It’s also one of the fastest-growing markets right now. If you have some spare time, there’s no reason why you can’t help make a cryptocurrency ‘project’ successful!
Before we dive into what being involved in crypto projects entails and how you can start making money from your idle time, let’s look at some basics.
1. Why invest in cryptocurrency?
Cryptocurrency is a rapidly growing market. It is on track to explode over the next five years, and as a result, it is attracting investors like lionesses hunt gazelle.
How do you make money from crypto?
Good question! There are two schools of thought – the early adopter and the ‘hodler’. The first (early adopters) buy when they think that prices are low and can subsequently sell at high prices. This sounds easy, but in practice is not easily executable. It takes great patience to wait until you ‘feel’ that you have good reasons to buy at low prices (until greed takes over). The ‘hodlers’, on the other hand, believe in hodling for the long run. Right now, prices are low and it makes sense to buy as much cryptocurrency as you can. This way, you don’t have to worry about what will happen tomorrow – you have good reasons to believe that your investment will grow in value over time.
This is why it is recommended that you don’t try to time the market (the value of cryptocurrencies go down as well as up) but instead build a diversified portfolio and hold it for long periods of time (read more about this here ).
2. How do you invest in cryptocurrencies?
There are many ways to invest in cryptocurrencies. Depending on your desired investment strategy, you have lots of options. Most options involve:
Buying from cryptocurrency exchanges – It is possible to buy from cryptocurrency exchanges (such as Coinbase ) and other trading platforms that allow you to trade between fiat (legal tender) and cryptocurrency. You can also buy through cryptocurrency brokers who operate like a kind of currency exchange but they tend to charge a hefty commission. Investing into ICOs – ICOs were made famous by Ethereum when it raised $18 million in 2014. “What’s an ICO?” you might ask. ICO is the abbreviation for Initial Coin Offering . It’s a concept that was popularised by cryptocurrency enthusiasts and is now catching on in the mainstream. In an ICO, a certain project will publish a white paper that explains their concept, what their goals are, how much money they require for development, and an investment plan. Investors who read the white paper will be able to decide whether they want to invest in this project or not. News approved site is here.
Ethereum’s ICO raised total of $18M at 1 BTC = 2000 ETHs (1 ETH = ~ $0.092443)
3. So what do you do if you want to participate in an ICO?
If you would like to invest in an ICO, the first step is to get a cryptocurrency wallet. You can read more on this here . The second step is to perform some research on the projects that seem most promising. Read their white paper, check out news and updates, look at their team members (and their past work experience), consider how big of a problem they’re solving, etc.
When you feel like you have a good idea about what this project is about, and whether it’s worth your investment or not, the next thing that you want to do is decide when to buy. Since ICOs are very speculative, it is best to invest as late as possible. This is because you might get burned on a project that turns out to be a failure. On the other hand, some projects don’t work out and you lose too much money if you had invested early without any backlinks.
4. How do ICOs work?
ICOs are an exciting new cryptocurrency phenomenon that has caught the attention of investors and media outlets alike. The concept is that of crowdfunding the development of a new technology through the distribution of discounted cryptocurrency tokens (aka “tokens”). In an ICO, a certain project will publish a white paper that explains their concept, what their goals are, how much money they require for development, and an investment plan. Investors who read the white paper will be able to decide whether they want to invest in this project or not.
This concept has been made famous by Ethereum’s ICO which raised $18 million at 1 BTC = 2000 ETHs (1 ETH = ~ $0.092443) in 2014.
There are two stages of the ICO process: the presale and crowdsale stage. In the presale stage, investors with early access can use fiat or cryptocurrency to buy a certain number of tokens with a discount for crypto igaming.
