Different Ways Of Making Money In Crypto - Part 2
Crypto is a very new potential field, but extremely fertile for investors pursuing profits. Have you known all about the methods of making money in this market?
In the previous part of the “Methods of making money in the crypto market” series, we went through the 5 most popular methods in the market: Spot investing (Hodl coin); Trade (Surf); Staking; Farming and IDO.
In this second part, we will continue to explore 5 methods that are less common but are sure to surprise in terms of their ability to generate profits.
Exploiting - Mining
Mining or Exploiting is a familiar concept for many people. In essence, Mining is the process of using computer computing power to confirm and add transactions to the blockchain using the Proof-Of-Work (PoW) consensus mechanism, and get back a certain amount of coins and/or partial transaction fees.
In addition to Bitcoin and Ethereum, there are many other blockchain projects using PoW that can be mined such as Dogecoin, Monero, Litecoin, etc. To be able to exploit or mine, investors need technical expertise and specialized computers.
By using this method, investors will gain profits after deducting investment costs, maintenance costs and electricity bills. Currently, the average cost of generating 1 Bitcoin is $33,766, of which the cost of electricity is $20,260.
If mining is an essential activity for Proof-of-work, on the other hand, Proof-of-stake (PoS) validators will play a similar role. The validators will also be responsible for validating and adding transactions to the blockchain. Although no powerful computer hardware is required, validators will have to Stake a certain amount of cryptocurrency to be validators and be selected to validate transactions or do other tasks on the network, and will also be rewarded with cryptocurrency. Besides, investors will also need technical knowledge. The profit of being a validator also depends a lot on the price of the coin. In May 2021, the total daily reward for Ethereum validators reached over US$3 million after the ETH price peaked.
Having become so popular after the boom of Axie Infinity amid 2021, play-to-earn games have become an income generator for many people. After Axie Infinity, there have been many games with a similar model created, and players who participate will receive cryptocurrency or valuable NFTs. At the time of the boom, many players in developing countries like the Philippines changed their lives thanks to Axie Infinity and earned more than $1000 per month just from playing the game.
However, there are many debates about the current GameFi, when it is said that they are not sustainable because the games are "not for entertainment but only for making money". A number of new GameFi projects have recently been built that focus on the entertainment element of the game to create a natural appeal towards gamers, such as FootEarn, a 3D Esports football GameFi applying blockchain technology and NFT invested by Polygon.
In the first half of 2021, sales of NFTs have reached more than $2.5 billion. NFT Everydays: The First 5000 Days by Beeple - a popular digital artist sold for 38,525 ETH - equivalent to over $69 million at the time of sale.
The heat of NFT is undeniable and a lot of investors did not miss this opportunity. There are 2 main methods to make money from NFT:
- Trading: Similar to crypto, it is buying low and selling high, investors will buy NFTs at low prices and then sell them back at higher prices. However, this form is quite risky because it is difficult to truly value an NFT work, and the liquidity of this market is not as transparent and continuous as the traditional crypto market.
- Create and sell NFT: This form is safer as artists only have to spend a gas fee to mint their NFT and list it on NFT marketplaces. NFT Marketplaces like OpenSea will often charge in Ethereum and are quite high, so small artists should and often choose to list on smaller marketplaces.
Airdrop is a form of almost “no capital but still profitable”. As the name implies, the airdrop is to let money fall from the sky, through completing certain tasks or just by registering, you will have the opportunity to receive airdrop containing fiat currencies or NFTs from the project. And with luck, this fortune can be much larger than you imagine.
In August 2021, decentralized derivatives exchange - DYDX made an airdrop for users who have deposited and traded on the exchange in the past. Investors who traded with a total volume of 1 to 10,000 USD would receive 1163 DYDX tokens and if the trading volume was more than 1 million USD, the number of tokens that investors would receive is 9529 DYDX. DYDX reached an all-time high of $27 at the end of September, meaning there were 787 lucky people who received more than $257,000 from the sky.
Airdrop is also a means that projects choose to promote images and identities. Investors who work hard to "hunt" for information and do airdrops can also make a small profit thanks to this method.
Published on April 27, 2022
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