How Do You Get Rich Off Cryptocurrency?
Cryptocurrencies have been the most exciting financial topic of 2017 for many investors, and with good reason. Bitcoin jumped in price, reaching highs of more than $3,000 earlier this year. Ethereum and Ripple, the second- and third-largest digital currencies by market capitalization share, respectively, gained up to 30 or even 40 times their price points at the start of the year.
Mining operations are taking off, driving graphics cards supplies to nil and prices sky-high as well. So how can investors who are new to the cryptocurrency game make money off of this exciting new(ish) area of investment?
Basics of Mining
One way to make money off of digital currencies is through mining them. Granted, mining a cryptocurrency is a process which requires computer programming know-how as well as ample electricity, but for those in a position to be able to set up mining rigs, the work begins to pay for itself fairly quickly in many cases. (See also: Is Solar-Powered Cryptocurrency Mining the Next Big Thing?)
Computers set up to mine cryptocurrencies run massive amounts of processing power and use powerful graphics cards to solve complicated math problems. The reward for solving these problems is a small amount of a particular cryptocurrency. Gizmodo has explained mining cryptocurrency as “essentially getting rewarded for keeping the books for” the cryptocurrency platforms.
What’s important to keep in mind about mining operations is that serious miners will have rooms full of exceptionally powerful computing rigs. Without a warehouse full of computers working around the clock to mine for cryptocurrencies, you may not be able to keep up fast enough in order to make a lot of money.
Playing the Exchanges
If you’re interested in getting hold of some of the newest cryptocurrency tokens but don’t want to devote the time and resources to building a mining rig, your next best option is to buy those tokens on an exchange. While this doesn’t give you access to the newest currencies quite as quickly as it would if you were mining for them, this is nonetheless a way to earn some money off of the field.
Some investors have been exceptionally successful at turning profits by buying and selling on exchanges. (See also: An Ether Trader Made More Than $200 Million in One Month.) If you’re going to do that, though, you’ll need to pick your exchange(s) carefully. Be sure to do your research first: pick exchanges that are reputable and as secure as possible, and use a variety of means to track the prices of the currencies you follow.
Because cryptocurrency prices are incredibly volatile, being delayed by even seconds can mean the difference between a substantial profit on a transaction and a meager one. Vigilance, careful attention to trends, and a bit of luck are all helpful, too.