Cryptocurrency is one of the biggest buzzwords in the global finance, economics, business, and tech scenes – a testament to its disruptive potential.
The rapid emergence of cryptocurrency in the mass-market can be traced in part to the impressive performance that cryptocurrencies recorded in 2017. While most stock indexes only managed to record double digit gains, the price of Bitcoin surged 1,390%, Ethereum climbed up 8,981%, Litecoin soared 5,572% gains and Ripple was up an incredible 28,963%.
Of course, cryptocurrencies are volatile – their prices can rise and fall significantly multiple times within a short period.
Nonetheless, the predominant direction of the price and value of cryptocurrencies is northbound; hence, you’ll most likely be losing out of significant upside potential if you choose to ignore cryptocurrencies. This article provides 3 practical insights for getting into the cryptocurrency game to participate in the upside.
Image Source: usethebitcoin
1. Trade or invest in cryptocurrencies
The most popular way to get involved in cryptocurrencies is to become a trader, investor, or a hybrid of the two. Traders typically buy and sell multiple cryptocurrencies over a short term using a simple buy-low, sell-high strategy. Investors typically look for new or undervalued cryptocurrencies that they usually hold for the medium to long terms in the hopes that the cryptocurrency will rise to its true value.
Sometimes it might be hard to draw a line between cryptocurrency trading and investing but using one of the best decentralized exchanges for cryptocurrency trading could improve your odds of profitability.
For instance, exchanges that offer immediate or near-instant deposit of coins into your wallet after purchase will make it easier for you to access the markets than exchanges that force to you wait a couple of days/weeks before you get your coins.
You also need to keep a finger on the market pulse because much of the momentum in cryptocurrencies is a function of rumors, news, and market hype. Cryptocurrencies are still very speculative; hence, you need to be informed so that you can buy the rumor and sell the news.
2. Become a cryptocurrency miner
The second way to get your feet in the cryptocurrency value chain is to become a cryptocurrency miner. Cryptocurrency mining is simply the business of adding transactions to a blockchain, calculating hashes, and mining new blocks.
Cryptocurrencies are fundamentally decentralized and there’s no central bank to “mine” or create new coins. Miner are tasked with the responsibility of adding transactions to the blockchain and solving complex cryptography for which they are rewarded with some cryptocurrency.
To become a cryptocurrency miner, you’ll need to conduct a research and invest in a mining rig and download the mining client and software – you can choose to mine independently or you could join a mining pool.
For your cryptocurrency mining to be profitable, you’ll need to calculate the price of the cryptocurrency in relation to the cost of your miner, the energy cost of running the miner, and the energy cost of air conditioning to keep the miner functional at optimal temperatures.
3. Get paid in cryptocurrencies
The third way to get involved in cryptocurrencies if you are not particularly keen on becoming a trader or investor is to start accepting payments in cryptocurrencies. If your run a business selling products or services, you can easily set up a process of accepting cryptocurrency payments.
If you work in the gig economy or do any form of remote work digitally, you can request that your clients pay you with cryptocurrencies.
Of course, you’ll need to have a digital wallet, you’ll need to be able to do the maths of how much the value your invoice is worth in the cryptocurrency of your choice, and you might need to do some convincing to get your clients adopt the cryptocurrency option.
When you’ve been paid in cryptocurrencies, you can simple hold the cryptocurrency until its value increase or you can use the cryptocurrency as payment for other goods and services.