While at Paxful we believe there’s more to Bitcoin than its price, we understand that millions around the world have found ways to make additional income with cryptocurrencies.
For the average person, making money with cryptocurrencies can be an intimidating thought but we’re here to tell you that it doesn’t have to break the bank. In fact, putting in even a small amount is enough to get you started.
Let’s take a look at just some of the ways people have earned something extra.
1. Buy and hold
HODL, or hold on for dear life, has become one of the mantras of the community and many cryptocurrency enthusiasts—the message being that they should just hold on to their cryptocurrency, even during bear markets.
Holding is a convenient yet relatively low-risk strategy that could yield high rewards. The challenge here is fighting against the panic when others start doing so.
All you have to do is choose a cryptocurrency to purchase (preferably when the value is down), hold on to it, and then sell when the currency reaches a desirable value. On platforms like Paxful, you can start with as little as 10 USD but, of course, you can make more money if you invest more and then sell at the right time—which is never easy. Keep in mind though that the more money you invest, the more risk you face.
This strategy is similar to traditional investments—a long-term approach to making money with cryptocurrencies.
Difficulty: Easy
Speed: Slow
2. Loan your cryptocurrency
You can also make money with cryptocurrency by loaning it, similar to how people can loan (or lend) funds with a certain interest rate. The platform you choose determines which cryptocurrency can be loaned or used as collateral.
Users can pick between centralized or decentralized finance cryptocurrency lending platforms. Centralized platforms will have a central authority managing and overseeing operations and verifying users’ identities.
Decentralized platforms, meanwhile, are handled by computers, allowing users to function semi-autonomously. Since these run on the blockchain, verification of transactions is left to the community since all transactions on that platform are readily viewable.
As for interest rates, you can expect them to fall under either a fixed interest rate or a floating interest. Fixed interest describes a steady rate charged on the loan amount, while a floating interest rate varies depending on market movement.
Difficulty: Easy
Speed: Fast
3. Play-to-earn games
If you’ve heard of NFTs (non-fungible tokens) before, then you’ve probably heard of blockchain games like Decentraland. These games have allowed users to make money just by playing, rewarding players with tokens that they can sell on the public market.
If you’re willing to put in some time and effort on playing video games, all while making money, then play-to-earn blockchain games just might be the starting point for you.
Difficulty: Medium
Speed: Medium
4. Buy and sell
Trading digital assets is how most traders make money with cryptocurrency. The idea is simple: you buy cryptocurrencies at a low price and then sell them after a short period.
If you haven’t started yet but are looking to try it out, you can check out Paxful for easy Bitcoin trading. On the homepage, you can buy Bitcoin (BTC) by selecting it on the box to your left. Set how much you want to spend, choose your preferred currency, and select how you want to pay.
Click the Find Offers button to see all sellers then sort them by Price: Lowest to Highest to see the cheapest price.
Keep an eye on the Get on dollar indicator. This shows you how much you stand to gain (or lose) on that deal. A lower percentage means you’re buying BTC below the market price. A higher percentage means you’ll pay a bit more.
After completing the purchase, it’s now time to sell your newly acquired Bitcoin. Click the Sell button from the main menu and select the type of cryptocurrency you want to sell. You will ideally earn a little from this trade so you need to sort the buyers by Price: Highest to lowest.
Pay close attention to the Rate per Bitcoin indicator—a higher percentage means that the buyer is willing to pay above the current market price. Your earnings depend on how you want to get paid. You can earn up to 25% profit if you sell your BTC to buyers that want to pay using Paypal or bank transfer. It’s even possible to earn up to 50% if you exchange your BTC for an unused gift card.
Alternatively, you can use cryptocurrency trading bots to automate your trading if you can’t dedicate your time to buying and selling full time. These bots constantly monitor the market and can be programmed to buy or sell cryptocurrencies once a set parameter is met.
Difficulty: Medium
Speed: Fast
5. Mint your own NFTs
The ultimate goal when minting your own NFT is to create something that is unique, attractive, and profitable. Digital artist Beeple, for example, created an NFT called Everdays: The First 5000 Days and sold it at auction for 62 million USD.
The value in the market is such that projects like Built With NFT, in partnership with Satoshibles, have been able to leverage the popularity of NFTs to the advantage of developing communities under the Built With Bitcoin Foundation across Africa. This has also signaled a change in the cryptocurrency market—where in the past only the Ethereum blockchain had access to NFTs, the introduction of Stacks has allowed users to use Smart Contracts, dApps, and NFTs on the blockchain. Thanks to Stacks, we can now mint our own NFTS on the Bitcoin blockchain.
There are no restrictions on the format of the NFT, so it’s safe to say that your imagination is the only limit when conceptualizing. You can get some inspiration by browsing through NFT marketplaces to get a feel for the community.
To get started, you’ll need your “product” (e.g., a song, painting, digital artwork, or even physical items, etc.) and enough cryptocurrency to mint it. You’ll also need a cryptocurrency wallet for storing payments. You’ll have to remember that the blockchain you choose will matter as well, with the most popular being the Ethereum blockchain.
An example of what you can do once you have an NFT is to create and activate an account on OpenSea (that can cost you anywhere from 70-300 USD) and then mint the NFT into that account for 10-30 USD. The platform will then charge a 2.5% fee for each sale. Of course, there are other marketplaces where you can sell NFTs, with some even offering free minting where the minting cost is diverted to the NFT buyer.
Difficulty: Hard
Speed: Fast
Things to keep in mind
What most people warn against are fear, uncertainty, doubt (better known as FUD), and the fear of missing out, or FOMO. These aren’t just fun phrases in the cryptocurrency communities—they should be taken seriously. You can look at these as symptoms of not being as informed as you should be. This is why doing your own research is often advised in the community, both for newcomers and veterans alike.
Another thing to remember is that there are a lot of online tools that can help you with cryptocurrencies. For example, you can use the Fear and Greed Index as a sort of social thermometer to help guide their trades.
DeFi is meant for people, not the market
Everybody can make money with cryptocurrencies. Going back to the goal of decentralized finance, the whole point was to develop something that caters to people and not the market. It’s like with Bitcoin users—it’s not about how much you’re earning passively but whether you’re using Bitcoin as it’s meant to be used.
Of course, those looking to earn a little extra on the side can start with small portions of their salary, saving what they earn for re-investing. Your trading and investment strategies will depend on how fast you want to make money, you’re allowed some flexibility after all.
The point is that earning money with cryptocurrencies relies on how well you play your cards. Despite what people think, getting started investing or trading cryptocurrencies does not have to be expensive and it’s never too late to get started.
