Every trader knows that economic data have a great impact on the Forex market.
How to earn money on cryptocurrencies?
Everyone wants to earn money fast and without effort. There is an opinion that the developing cryptocurrency market created an opportunity for this. But is it really so simple to earn money on Bitcoins or “free cheese is only in a mousetrap”?
There are two main ways to earn money on Bitcoins: mining and trading.
Let’s start with mining or, in other words, "production" of cryptocurrency.
Miners process cryptocurrency transactions and get a reward for that. During this process, a new block of transactions is added to blockchain and a new Bitcoin appears.
On the first sight, it looks really simple. You just need a computer and video cards or special equipment and they will work for you. Equipment does all the work, you get money from it. You can work from anywhere in the world at any time, all you need are the Internet and electricity. But the reality is not as good as it sounds.
When Bitcoin appeared, it was enough to have just one computer to calculate a Bitcoin algorithm. Nowadays, as algorithms have become more complicated, one computer is nothing. Now miners have to spend a lot of money for special equipment ASIC or to join several video cards and connect them to one or several computers.
Mining requires not only special equipment but special conditions as well. High internet speed, high volumes of electricity, air filtration, so it is almost impossible to mine at home.
Another issue is competition. More and more people are trying to mine nowadays, different mining-farms are available, it creates problems for active miners. You have to update your system to be able to compete with others and calculate algorithms faster.
Law plays an important role as well. Bitcoin system is decentralized, there is no protection. So if you have any problems during mining, you will not be able to protect your rights.
There is another way of earning money on Bitcoin, it is trading. Bitcoin is a currency, that is why it means that traders can get it in exchange for other currencies – both other cryptocurrencies and fiat money like USD or EUR.
One of the features of Bitcoin trading is volatility. The price of Bitcoin rises and falls incredibly. In December it was above $18,000 and in the middle of January, it fell lower than $10,000. On the one hand, it creates risks for inexperienced traders, but on the other hand, skilled traders can earn a lot of money on such moves.
That is why to trade on this market, you should read and learn a lot. As soon as you have knowledge and skills, you can start to earn money.
The main advantage of trading is high profit and low entry costs compared to mining. You don't need thousands of dollars to start making money on Bitcoin. The main disadvantage is high risks.
Summing up advantages and disadvantages of mining, we can say that nowadays this process is becoming more and more complicated. There is no point for a new miner to try to install a mining farm at home, because of the low recoupment. But if you are still not sure about that, you can check different websites that will calculate the costs of mining for you. Considering trading, we can say that if you are a professional, you have chances to earn money on a cryptocurrency market. At the same time, high volatility creates high risks for inexperienced traders. That is why it is better to rely on trustworthy brokers.
We can offer you our help, the link is here.
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