Before the age of widespread cryptocurrency awareness, when most people thought about trading or investing they’d probably think of stocks, shares, commodities, currencies and bonds. Walking into your bank and asking about Bitcoin would probably have gotten you a blank, or odd, look at best. And although cryptocurrency isn’t quite booming like 2017, people still want to know, ‘can cryptocurrency make you rich?’ It’s an interesting question which we’ll dig into today in this blog post.
Let’s take a quick look at the king of cryptocurrency, Bitcoin
Introduced in 2009, the electronic cryptocurrency Bitcoin is exchanged through its own payment network. Bitcoin can be stored in a virtual online wallet known as a hot wallet or offline in a cold wallet. If you’d like an in-depth comparison of cryptocurrency wallets, check out our post here.
Bitcoin is a decentralized, peer-to-peer currency which relies on cryptography to facilitate currency generation and transactions. People can send Bitcoins (or part of one) to your digital wallet, and you can send Bitcoins to other people.
Every single transaction is recorded in a public list called the blockchain.
This makes it possible to trace the history of Bitcoins to stop people from spending coins they do not own, making copies or undo-ing transactions.
And from the dawn of its inception people have been getting rich from Bitcoin and other cryptocurrencies. People have been riding the wave of crypto growth and doing rather well from it. For example, Bitcoin was worth around $13 in 2013, and at the most peak price we’ve seen so far was nearly $20,000 in 2018. That means if you had just purchased $200 of Bitcoin in 2013, it would have been worth over $300,000 if you sold at the peak price! That’s a 1500x return on your money!
So how can we get rich from cryptocurrencies today? I’ll break it down into an easy way, a more difficult way and touch on some other ways which are available.
The easiest way to get rich from cryptocurrency – buying and holding
Buying and holding is the method you’re probably most familiar with when it comes to investing and making money with traditional stocks and shares. You purchase some sort of asset, you let it increase in price and then you eventually cash out.
It’s the same idea when buying and holding (or hodling) with crypto. You are waiting for the price of your chosen cryptocurrency to rise so you can sell at a rate higher than when you bought.
This is one of the best and easiest ways to focus on when making money from cryptocurrency.
The simplest place to do this is Coinbase. Using this link, you’ll get $10 in Bitcoin when you buy or sell $100 or more on Coinbase
While there are MANY different coins out there, we recommend you stick to the most well-known coins such as Bitcoin, Litecoin, Ripple and Ethereum. These are the safest and have been around for a while. If you invest in a new coin it might be cheap to buy lots of them, but there’s a very high chance the coin could just disappear. Coins that have been around a while don’t have that same commercial risk.
The most difficult way to get rich from cryptocurrency – day trading
Day trading is a bit more advanced and involves looking for patterns in financial trading charts. It’s a full-time job for many! Because cryptocurrency is very volatile in that the price can change drastically over a day, someone who constantly tracks the price over a day can make a very large return on investment. They can buy some coins in one hour, and sell them an hour later.
We wouldn’t recommend this if you’re a beginner, or if you don’t have the time and energy to follow charts every single day. If this sounds like you, it would be better to consider other options.
But if you have experience in trading or previous knowledge in crypto, this could be THE way for you to use cryptocurrency to your benefit!
The dumbest ways to TRY and get rich from cryptocurrencies – well, there’s a lot actually!
If you read ‘can cryptocurrency make you rich’ or ‘how to get rich from cryptocurrencies’ posts on the web, many of them will regale you with ways to get rich from cryptocurrencies. Let’s save ourselves some time and quickly dispel some of the worst ways.
Mining Bitcoin – gone are the days of mining on home-based rigs. If you live next to a source of free electricity such as a hydro-electric dam, then this may work out for you.
Mirco tasking – platforms such as Bituro, Latium and Bitcoin Rewards provide a space to complete tasks for cryptocurrency payments. Plan to be old, grey and poor from expending energy on this method.
Faucets – these websites or apps are known as bitcoin faucets and there are thousands of them online. The only catch is that the amount of bitcoins they give is very small, and it varies from circa 100 Satoshis (0.000001 BTC) to 10,000 Satoshis (0.0001 BTC). Tasks include watching ads or filling out surveys. Plan to be even older, greyer and poorer from expending energy on this method.
Working for cryptocurrencies – this isn’t actually too bad and is a viable source of income. Many employers are happy to pay for work in cryptocurrency. If you work online or have a job that allows you to do so, this is a viable way to make an income with cryptocurrency.
Blogs that are specifically dedicated to cryptocurrency like cryptocoindude.com are also happy to pay writers who want to work in crypto as well!
Can cryptocurrency make you rich – wrapped up
And that’s our guide to getting rich from cryptocurrencies. Fortunes can be made and lost when dealing with cryptocurrencies like in any other asset class. At cryptocoindude.com, we’d recommend starting small on whatever you do. Test it out. Does it work for you? Are you making returns on energy expended? Cryptocurrency is a hugely exciting area of financial technology and making it work for you could open up doors to great opportunities. If you like our post, feel free to give it a share on your favourite social media channel below.