How to earn cryptocurrency: compare and choose the best method

What criteria do we use to evaluate the methods

We have selected several criteria by which we will evaluate ways to earn cryptocurrencies. And at the end of the article, we will compare them according to these criteria and choose the best method that will score the most points. Let’s just say that there is no perfect way: each of them has its own advantages and disadvantages, and when choosing, first of all, it is necessary to be guided by individual preferences, aiming and soberly evaluating your experience.

Yield

This is one of the most unstable factors. Cryptocurrency rates behave unpredictably and can change quickly, and their dynamics are determined by global market trends and news background. Earning cryptocurrencies carries a large risk associated with the volatility of digital assets. Therefore, you can increase your own capital several times or lose it partially or completely.

But not all methods assume high returns or can guarantee them. However, medium-income methods are an application for investing, so they will get 1 point by default.

Complexity

We use this criterion to determine whether the method is available for beginners. For example, crypto trading is very risky and requires experience in analyzing the crypto market, as well as discipline and stress tolerance, which are developed over time.

The minimum entry threshold

Here we determine what amount is required for initial investments. Not every user has large amounts, so 1 point will be awarded to those methods that require $100 or less to start.

Necessity of special knowledge

It is not necessary to understand complex and confusing terms, such as multi-signature or segregated addresses, to start earning on cryptocurrencies. But this is not always the case: in some cases, you will have to figure out how bitcoin wallets work or how to use indicators on stock charts. If a beginner can start earning almost immediately, without “digging” in the terminology, then the method gets 1 point.

Passivity

Here everything is simple: the simpler the method, the better. If the approach does not require constant monitoring and does not take a lot of time, we award it 1 point. But some methods will not only require large financial investments, but will also take a lot of time and require knowledge, while not guaranteeing profitability.

So, we have reviewed the key criteria for evaluating ways to generate income on cryptocurrencies. Now let’s look at each of them in more detail.

Investment

Investment is the easiest way to earn money on cryptocurrencies. Crypto enthusiasts also call this method Buy & Hodl or simply HODL. All you need to do is buy a cryptocurrency and store it on your wallet until its rate increases. Bitcoin since March 2020 has grown almost 3 times from $4,000 to $11,500. You could get an income of 275% just for buying and selling bitcoin.

How to store cryptocurrency

There are many non-custodial crypto wallets for secure storage of crypto assets:

  • Bitcoin Core is the original bitcoin wallet;
  • Ledger Nano is a secure hardware wallet for offline storage;
  • Trust Wallet is a convenient multi-currency wallet from Binance;
  • Blockchain.com is a popular web wallet;
  • Exodus is a lightweight desktop client.

Where to buy Bitcoin 

If you are going to store coins in your wallet, it is faster and easier to buy bitcoin or other cryptocurrency using special exchangers. This way, cryptocurrencies will be sent directly to your wallet, and you will not spend money and additional time on withdrawing coins.

You can find a suitable exchanger using the Changevisor service (https://changevisor.com), which monitors the exchange rates of various exchanges in real time. You can choose the purchase method you are interested in, for example, Bitcoin for USD PayPal or any other, and filter the results by request. On the Changevisor website (https://changevisor.com) user reviews of exchanges are presented, and the results are sorted starting from the best offer.

Cryptotrading

Cryptocurrency trading involves making shorter transactions than investing, and allows you to make a profit on local price fluctuations. This may bring more profit, but the risks increase accordingly. In order not to lose your funds, you need to constantly study trading methods, as well as monitor and analyze the crypto market.

Where to trade cryptocurrency

  • Binance is one of the most popular crypto exchanges;
  • OKEx – a large Maltese exchange similar to Binance;
  • BitMEX – platform for trading cryptocurrencies;
  • Coinbase Pro – crypto exchange allowed to operate in the United States;
  • Kraken is a crypto exchange with fiat currencies support.

Mining

Mining involves mining cryptocurrency using special ASIC devices or video cards. This method requires special knowledge to set up the equipment and a large investment to buy it. The yield depends on the cryptocurrency exchange rate and can become negative. While high-performance video cards can cost several hundred dollars, ASIC miners’ prices start at about $1,000. But there are special mini USB devices that cost from $20 to $50 and also serve as a cryptocurrency wallet.

What cryptocurrencies can be mined

  • Bitcoin (BTC);
  • Ethereum (ETH);
  • Bitcoin Cash (BCH);
  • Dogecoin (DOGE);
  • Monero (XMR).

Cloud mining

The point is also to mine cryptocurrencies, but users don’t need to buy and configure complex hardware. Just rent the capacity and start earning income. But cloud mining providers charge a service fee, so the yield will be lower, and if the rate falls, the payments may stop altogether.

Staking

PoS, unlike PoW mining, generates new coins based on the amount of cryptocurrencies on the node’s wallet. There are two main types of staking:

  • Launch your own node and add new blocks. As a rule, it requires large investments to launch;
  • Delegating tokens. In this case, you delegate coins to another node and simply get a profit, but the validator charges a fee for its services, the amount of which is determined independently.

The yield varies from 1% to 20% per year and depends on the number of staked coins. As a rule, the more coins, the lower the yield. Staking is supported by some cryptocurrencies and exchanges, such as Coinbase and Binance.

Cryptocurrencies that support staking

  • Tezos (XTZ);
  • Cardano (ADA);
  • Tron (TRX);
  • Qtum (QTUM);
  • Cosmos (ATOM).

Lending

This method does not require much effort and investment. The bottom line is that you provide credit to other users at interest and get passive income, which will grow as the price of the cryptocurrency increases. Here are a few popular platforms for crypto lending:

  • CoinLoan;
  • NEXO;
  • Maker DAO;
  • Compound;
  • Aave.

Deposit

This method is similar to bank deposits: you reserve cryptocurrency on the account of a crypto exchange or other platform and get a percentage for it. As a rule, interest is accrued daily, so the yield is higher than that of bank deposits due to compound interest. In addition, the cryptocurrency may grow in price.

Where can I open a deposit in cryptocurrency

  • Binance;
  • Blockchain.com;
  • Crypto.com;
  • Bitcoin.com.

Airdrops

You can get cryptocurrency for free for reposts in social networks, inviting other users, creating content or performing other simple tasks. However, you can get a significant income if you have your own crypto blog with a large number of subscribers. But this way you can get cryptocurrency without investment.

Where to look for airdrops:

  • Coinbase Earn;
  • CoinMarketCap Earn;
  • Binance;
  • Airdrops.io;
  • AirdropAlert.com.

Comparison of ways to earn cryptocurrency

We have prepared a table with which we will compare several ways to earn cryptocurrencies according to the selected criteria, and then made a summary and selected the best of them.


InvestmentCrypto tradingMiningCloud miningStakingLendingDepositAirdrops
YieldHighHighAverageBelow averageLowLowLowLow
ComplexityZeroHighHighZeroAverageZeroZeroAverage
The minimum entry threshold$10$10$1000$10$10$10$10Can you do it without investment
Necessity of specialized knowledgeNoYesYesNoYesNoNoNo
PassivityYesNoNoYesYesYesYesNo
Final rating5/53/51/53/54/54/54/53/5

According to the results of the assessment, investing in cryptocurrencies received the highest score, since this method combines an optimal ratio of risks and returns, simplicity, complete passivity and does not require large amounts to start. You just need to choose the right time to buy, create a wallet and buy cryptocurrency through the exchange, which can be found using the Changevisor website (https://changevisor.com).

Conclusion

Although investing at the end turned out to be the best way for beginners, this does not mean that there is no better method. Everything is determined individually: for example, if you have a large amount of money and access to cheap electricity, then mining can bring no less profit. But if the exchange rate falls, then the yield will also fall and may not cover the cost of electricity. And for those who understand technical analysis, crypto trading can bring more profit than investing, mining or staking.

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