Takeaways
- A quick and easy guide on how you can get your crypto to work for you.
- Earning a passive income through crypto
In a world full of mayhem, earning a passive income is a dream for most people. The idea of having money work for itself is not a new venture, but the crypto revolution has facilitated the process and created new alternatives that might be the first dip into a Crypto career.
But how to decide which way is best for you? With our helpful quick guide, you’ll be able to learn the qualities and issues of the most popular methods of earning passive income in crypto.
Cryptocurrency: Fancy Digital Money.
So, imagine money that exists only on computers, like a special kind of video game coin. That’s crypto! Here’s the basic idea:
- Digital Money: It’s not like cash you can hold. You keep it in a digital wallet app on your phone or computer.
- Super Secure: Special codes make it safe and almost impossible to fake.
- No Banks Involved: Unlike your bank account, crypto isn’t controlled by banks or governments.
How to Get Crypto:
- Mining: Like a digital treasure hunt! Computers race to solve puzzles, and winners earn bits of crypto as a reward.
- Buying and Selling: You can buy crypto on special websites, kind of like trading Pokémon cards. But the price can change quickly, so be careful.
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Earning Crypto: Mining Without a Pickaxe
Mining is the original way to earn cryptocurrency, and unlike real mining, you don’t need any special tools!
Here’s how it works:
- You use your computer’s power to solve puzzles that help secure the cryptocurrency network.
- As a reward for solving these puzzles, you get small amounts of the crypto you’re helping to secure.
This is an important part of how cryptocurrencies work. However, be aware that newer cryptocurrencies can use a lot of energy for mining. Depending on your computer setup, mining might not be profitable and could even waste energy.
Things to Keep in Mind:
- Up and Down Prices: Crypto prices can jump around a lot, so you might lose money if you invest. Only use what you’re okay with losing.
- Not for Everything Yet: You can’t use crypto everywhere yet, like at the store. But it’s becoming more popular!
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Crypto: Liquidity Provider.
Liquidity Providers: Making Markets.
Remember the craze for fidget spinners in 2020? Liquidity providers in DeFi are kind of like that for cryptocurrency trading. They help make sure there are always buyers and sellers for certain digital currencies.
Here’s the gist:
- Liquidity providers put up their own crypto to create a pool of currency.
- Smart contracts are like automatic programs that handle the buying and selling within this pool.
- When you trade using this pool, you’re agreeing to potentially buy or sell from it to keep things balanced.
DeFi (Decentralized Finance) is a popular example where this kind of “automatic market maker” system is used for trading crypto. Users agree to keep ETH tokes flowing, and when DeFi goes up, profits arrive.
Trading Crypto.
Trading can also be done passively if that is your preference. Through setting clear stop losses and being patient, you can let cryptos valorize.
There are also automatic algorithms that can be used to fully automate the process. But, as with anything else, this is a double-edged sword – while auto trading can be profitable, nothing beats a human analyzing data and make conscient decisions. You might not be as effective passively trading as it would be joining the markets.
Crypto Trading: Not Just Active!
So, you don’t have to constantly watch the market to trade crypto. Here are two ways to trade more passively:
Buy and Hold: This is like buying baseball cards and hoping they become more valuable later. You can set limits to automatically sell if the price drops too much (called a stop loss). Then you just wait and see if the value of your crypto goes up.
Auto Trading Bots: These are like mini-robots that can follow your instructions and trade for you automatically. They can be helpful, but remember:
- They can make money, but they can also lose money.
- Nothing beats your own brain for making smart decisions based on what you see happening in the market.
Affiliate network.
So, one of the biggest drives behind passive net income is creating and nurturing an affiliate network. The process might take longer and you have to provide the reasoning behind having traders attached to your network, but with insights and experience, many traders are shifting away from day trading onto a mentorship role.
If you think that is an opportunity for you, remember to help your Affiliates as they should help you. Together, both will be benefited from this relationship. At Envi FX our Affiliate Program is designed to help you earn big.
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