Today we will continue a bit more on the topic from yesterday: How to make Money with Cryptocurrencies. Cryptocurrency is a hot topic but nobody seems to know what it is really all about. There are many ways for a chance to multiply coins but there are also always risks to consider. Everyone who heard about it wants to earn money with cryptocurrencies like Bitcoin. Not only in Crypto but everywhere in life. The only solid way to make money is through your own diligence and not through random advice from the internet, e.g. from suggestions, tweets or online courses of completely foreign persons. Don't give any money on promises to pay back big profits, those are always scams. Greed eats the brain.
As example for a risky investment let's talk about Bitconnect, which was another cryptocurrency hyped by Twitter, Youtube and Bitcointalk Gurus. If you often read about it in various forums, simply ignore these cryptocurrencies. Maybe there is the possibility to making money in the short term, but in the end you will only lose and the gurus will enrich themselves with you and other sheeps while you stay seated on these bags forever. Examples of this were enough WeTrust, XHV, STRC, APX, AMP, BTCP etc... In the Cryptocurrency Blacklist you can see all scammer and fake currencies.
A good Guide for beginners are this Candlestick Chart Video. In general you can short a cryptocurrency or go long. Having a “long” position in trading means that you own and hold your crypto until it gains in value. The Investor maintain a “long” position in the future expectation that the value will rise. The opposite of a “long” position is a “short” position. A "short" position is generally the sale of a coin the trader do own in order to buy more from it cheaply later.
Good traders can make 3% -5% profit a day, but they also know the risk they take and they have to step out of positions when loses pile up. They more you trade, the easier it will get and the more used you get to the system, but even pro Traders make losses on trades. This is something you have to accept and overcome before you even get started.
Set a buy level in a strong correction of a currency, sell on a rising course and take profit (+x % level). For advance use: a trailing stop loss level. Only trade with money you can afford to lose in a worst-case scenario. Remember that most traders actually lose money and give up trading quite quickly (too stressful, too time intensive, not hitting the right spots, impatience, etc.)
When it comes to staking you get a fee from your keeping coins in an open wallet. The transaction confirmations are not done with hardware but with already owned coins. Probably an easy way for getting new coins, but you must choose wisely which coin you will stake, most of the time the coins with the highest rewards also drop the most, which leaves you with more bags of more and more useless coins.
Basically you get a certain percentage of your coins as a reward. Technology changes quickly in the meantime; the basic principle is always the same.
In general there are several Techniques:
1. Only Proof of Stake (PoS) coins, which are mostly "premined" or sold in an IPO. (NXT, NEM)
2. Coins that combine PoW and PoS hybrid. (e.g.: Peercoin)
3. Other systems like "freezing" (in Tron), or "forging" (NXT) or "harvesting" (NEM).
4. Using of PoW only as a distribution method until a certain time (Blackcoin, Bitz)
Mining is the process by which transactions are verified and added to the public ledger, known as the block chain, and also the means through which new crypto is released into circulation. What makes mining different from regular mining is the fact that the miner (meaning you) utilizes a remote data-center with shared processing power.
Buy & HODL
Hodl is slang in the cryptocurrency community for holding the cryptocurrency rather than selling. For most, there is a belief in this technology in which they have no need to time these movements. For every success story there are also stories of someone selling right as it went up, or buying as it went down. For others, there is a long-term value they hold in the technology and their place within that ledger.
We hope this little article helps on the different strategies. Betting on Fairlay is also an exiting option to increase your bitcoin stack :)