How crypto makes money

Where the Money’s At: How Cryptocurrency Makes Money

Last updated on June 8th, 2023 at 02:54 pm

In recent years, cryptocurrency has become the new gold rush, as savvy investors look to capitalize on digital assets to generate an income. As a matter of fact, this decentralized technology has created opportunities to make money in ways never seen before.

Cryptocurrency allows us to make money in several ways. These include investing, mining, staking, yield farming, lending your crypto, trading and play-to-earn.

Many of these opportunities are often referred to as passive income due to their mostly hands-off nature.

We’ll explore the many ways that cryptocurrency can help you make money, and provide some tips for making the most out of these digital assets. 

So, if you’re looking to start bringing in different streams of income from the crypto space, read on!

Before investing in cryptocurrency, remember, this is NOT financial advice, I am NOT a financial advisor. You need to do your own research (DYOR) before investing and don’t invest money you can’t afford to lose. The results that I have experienced does NOT guarantee you will have the same outcome.

Passive Income Overview

These days with our unstable economy and inflation out of control, having more than one source of income is a necessity to provide balance to your household.

Especially since 2020, many have sought out alternative means of getting these additional resources. For many, they have developed what are considered streams of passive income.

So, if you’re looking for a way to replace your current job or looking for a way to inject more income into your budget, passive income may be the perfect solution.

What is Passive Income

In a nutshell, passive income is money earned through activities that require minimal effort to maintain once the initial setup and investment has been taken care of.

Done correctly, these activities provide a stream of income without actively engaging in them on a regular basis, thus allowing you to focus your time and energy elsewhere.

Traditionally, passive incomes often come from investments, such as stocks, bonds, real estate, and royalties from book sales or music. Other potential sources of passive income include: renting out your home, creating an online course, blogging, e-book publishing and monetizing a website.

In this article, I go into greater depth with many of these more traditional options.

However, as good as these opportunities sound, to help ourselves make the best decision, we often need to wrap our heads around the potential benefits that come with it.

Benefits of Passive Income

Most often, before we do anything, we ask ourselves the question: what’s in it for me?

Frankly, that’s a legitimate question as far as I’m concerned.

However, what if you make that question secondary to: what’s in it for the world (mankind)?

Well then, you can often answer both questions simultaneously… with outstanding results for both.

Passive income can be a great way to support yourself and your family while giving you more free time to focus on the things that matter most.

Couple that with the fact that after the initial set-up, you can generally earn a passive income without having to put in long hours. Furthermore, depending on the income stream chosen, you can have the freedom to work where you want and when you want.

Not to mention, if it is set-up and worked correctly, there is potential for tax advantages.

While the list of benefits for having a passive income are many, the question remains; how can I make that happen with crypto?

How To Make Money With Crypto

Let me start out by saying that if you have come here because you think that crypto is some sort of a “get rich quick” scheme… you may as well leave now!

The fact of the matter is, while you can certainly increase your wealth with cryptocurrency, it will require some effort and investment on your part.

Now that I’ve gotten that out of the way…

With the increasing adoption of Bitcoin and cryptocurrency, as well as the technological improvements that will undoubtedly move the space forward, more and more people will be taking advantage of these digital assets to make extra money.

But before we get into your income options, I would like to talk about what we’re not going to cover.

What We’re Not Going To Discuss

Some cryptocurrency projects offer free airdrops

Crypto faucets and airdrops are often touted as an easy way to make money with cryptocurrency, but let’s be real here, these methods are far from reliable, safe or profitable.

You’d have to spend hours upon hours clicking through random websites to rack up pennies in earnings that, in most cases, you’ll never actually be able to withdraw. Quite frankly, even if you could withdraw your earnings, you’re not going to get very far with the little amounts you’ve earned.

The amount of time and effort it takes to accumulate your earnings doesn’t outweigh the minimal returns you get in return. Not to mention the fact that some of these websites pose a security risk.

With this in mind, It would be smarter to focus your efforts on more promising avenues that can provide greater, and oftentimes easier returns.

Crypto Income Options Pros & Cons

Income OptionRisk LevelDifficultyPrimary ProPrimary Con
Invest & HODLLowEasyEasy To CompleteLong-Term Time Horizon
Crypto Mining (PoW)ModerateHardConsistent Income Once Set-upInitial & Continued Capital Investment
Run a Lightning NodeModerateHardIncreasing Income Due To Increasing BTC AdoptionHigh Capital Investment & Technical Expertise Required
Crypto Staking (PoS)LowIntermediateMaintain Private KeysSome Equipment & Technical Expertise Required
Yield FarmingModerateHardPotential For High APYMust Lock Up Funds in Liquidity Pool
Crypto LendingHighIntermediatePotential For High APYPotential For Losing Your Crypto
Crypto TradingHighHardPotential For High GainsPotential For Devastating Losses
Play-to-Earn (P2E)LowEasyEasy Way To Earn CryptoRequires Extended Time Frames
Monetize Daily ActivitiesLowEasyEarn Crypto For What You’re Already DoingRequires Extended Time Frames

Invest & HODL

Investing in cryptocurrency is probably one of the easiest ways of producing gains in the space.

Generally speaking, investing can be broken down into 2 basic investment strategies; a presale investment or buy and HODL.

The first, and most highly speculative and risky, investing strategy allows investors to “get in on the ground floor.”

These investments are also known as a presale, ICO or IEO.

Basically, this allows investors, primarily outside of the United States & Canada due to regulatory concerns, to invest in a project before it’s open to the public. 

These sales are a means for projects to raise funding to support their future development.

It should be noted that many of these ICOs were nothing more than scams, allowing just about anyone with a whitepaper and some marketing to get people to invest with them and then they could run away with investors’ money.

While not all of these ICOs were scams, for many investors, if they had simply HODLed their crypto, they would have fared better.

Investing into a quality project means you don’t have to be an expert to potentially make money. All you have to do is buy the cryptocurrency and hold onto it long term, no matter what happens in the market.

When you invest and HODL (Hold On for Dear Life) you are setting yourself up for a low risk, high reward investment option. This can be further amplified by dollar cost averaging (DCA) your crypto investment over time.

While investing in cryptocurrency can be done over time and produce incredible results, this next form of income requires more initial capital outlay.

Bitcoin (BTC) mining farm

Crypto Mining (PoW)

When Bitcoin entered the scene in 2009, crypto mining became the gold rush of the 21st century.

Since then, more and more brave adventurers seeking to strike it rich in the form of cryptocurrency rewards are powering up their rigs and hammering away at the blockchain to uncover hidden treasures.

PoW is a consensus protocol for a blockchain. Bitcoin, the largest, and most well known PoW blockchain, used to be minable on a computer. But now it is most efficiently mined with powerful equipment called ASICs (Application Specific Integrated Circuit) miners.

However, there are some PoW cryptocurrencies that can still be mined with a computer. Examples include the privacy coin Monero (XMR) and Vertcoin (VTC).

Mining crypto is something I have been doing since 2018… and honestly, unless you have enough hashing power, you will take a loss until the price of BTC (or whatever crypto you’re mining) significantly increases in price.

Venturing into this section of the crypto space requires a substantial initial monetary outlay for equipment, as well as continued electricity cost.

However, if you have the resources, you can discover coins, previously hidden away in the digital world of blockchain, and bring those riches in as additional income.

And as a bonus, you are taking part in the security of the blockchain.

Stay updated on the latest info about crypto mining with this playlist on my YouTube channel.

But if you don’t feel like grabbing your hardhat and pickaxe to start digging for crypto gold, then maybe dealing with some lightning will help you strike more money.

Run a Lightning Node

A Lightning Node is a scaling solution primarily for the Bitcoin network. The Bitcoin blockchain, while very secure and extremely consistent, is slow by today’s transaction standards.

For those who run a node, it’s a way to help contribute to the decentralization of Bitcoin, as well as providing a means of making transactions almost instantaneous… oh, and one other bonus, if you run one you can earn extra income in the process.

With a Lightning Node, users can open channels with others on the lightning network to transact digital currency faster and cheaper than ever before.

By having your own node, you can earn transaction fees from allowing other people to send these transactions through your node. 

Having a developer, or the technical expertise yourself, will be required to keep up with all the latest Lightning tech. But when you do, you’ll be sitting on a veritable goldmine of digital wealth.

However if you are looking for an income stream that requires less upfront cash and less energy to run, then I have just the thing for you.

Crypto Staking (PoS)

Crypto staking is like mining without all the hefty equipment and giant electricity bill.

Like PoW mining, PoS is also a consensus protocol used to verify a blockchain. As such, there are different types of staking, each having a slightly different means of validation.

In most cases, to stake, all you need is a small amount of cryptocurrency and a wallet that supports it. For some staking, a computer or related equipment is necessary, while for other staking, you just need your wallet and a DeFi platform.

For many of these staking wallets, beside earning a reward HODLing your coins, your staking also helps to secure the network.

One of my favorite Ethereum staking smart contracts has been around since long before ETH transitioned to PoS.

I use and recommend Gandhiji.

This hourglass smart contract has earned me dividends since its inception. An hourglass smart contract provides dividends whether the contract goes up or down, so stakers are incentivized to move their ETH in and out freely.

You can see all of my videos about the ETH Gandhiji Smart Contract and the INDDEX exchange in this playlist on our YouTube channel.

No matter how you choose to stake your cryptocurrency, it is an easy, low risk way to generate passive income.

For those who find staking their crypto a bit too boring, they have some farming options that may be a bit more challenging.

Yield Farming

I remember the first time I heard the term yield farming in the crypto space, all I could picture was one of those farming video games.

Ultimately, yield farming has absolutely nothing to do with video games or farming.

Yield farming is more like staking on steroids!

The most common way for yield farmers are able to make incredible rewards is by adding crypto to liquidity pools on DeFi platforms and exchanges. The price for earning these rewards is that you will be required to lock-up your crypto for a specified period of time.

These DeFi protocols utilize something called Automated Market Makers (AMM) to create liquidity. When you put your crypto into a liquidity pair, you become an AMM.

Automated Market Maker (AMM)

In a nutshell, an Automated Market Maker (AMM) is a type of decentralized finance system that uses algorithms to generate trading pairs and maintain liquidity.

AMMs use predetermined formulas to set the price of various crypto assets, allowing users to easily trade between different tokens without having to manually set prices or find buyers and sellers.

This allows for faster, more liquid trading and removes the need for middle men.

By providing liquidity to a pool on a DeFi platform, you give users the ability to easily buy and sell. For this, you are then rewarded with a share of the fees associated with the trades.

So, if you have crypto just sitting in a wallet, you may want to consider this option… or, you could also lend out your crypto and make some interest for your troubles.

Crypto Lending

If you’re feeling a bit more ambitious, and have a higher tolerance for risk, you might consider lending out your cryptocurrency. Like it sounds, you would be loaning out your crypto to a borrower.

With crypto lending platforms, like Compound or Aave, you can put your coins to work for you and start earning interest in no time. The process is fairly straightforward; all it takes is a few clicks, and some idle coins.

You’ll lend out your coins to other users, or institutions. In exchange, you’ll receive a steady stream of interest for the length of the loan.

While many of these platforms require the borrower to over-collateralize the loan they are taking, the risk still remains that the borrower could default on the loan. We’ve seen this happen with the collapse of platforms like FTX and Celsius.

Though making your crypto assets available for a loan can be lucrative, there is a more active option that can also provide income.

Crypto Trading

Crypto trading is often viewed as an attractive option for those looking to make a quick buck. Unfortunately, many people who decide to try their hand at trading usually lose more than they make.

While the rewards on winning trades can be quite lucrative, trading, especially in crypto, requires a certain level of know-how. From closely watching market updates to using technical analysis tools, there’s no shortage of strategies and knowledge necessary for aspiring traders.

This is an area that I have tried, and quite frankly, failed at miserably!

Despite my losses, and the bruises to my ego and wallet, I felt confident that trading could ultimately produce some positive income. So, I investigated the use of trading bots.

Bot Trading

Let me start out by saying, I was intrigued by the idea of using bots to trade cryptocurrency.

After some research, and connecting with someone, a crypto millionaire in fact, who was willing to share his bot trading strategies with me, I discovered that this could be an effective way to minimize risk and increase potential profits.

Once I started learning this man’s mindset and strategy, it wasn’t long before I realized that with a bot-based trading system, my trades would be based on market data and trends rather than guesswork or emotion. Plus, it meant that I could relax with the knowledge that my trades were being handled in an automated and efficient way.

Trading bots have helped me to increase the profitability of my investments and make sure I’m making sensible, informed decisions. Not to mention that they have produced profits in both bull and bear markets.

Allow me to be completely honest, while I have a very good grasp of blockchain and crypto, I am by no means a developer. So for a long time, I shied away from the option of using trading bots.

However, once I learned and understood the ease with which bots can be set up, it only added to their appeal. 

Furthermore, the training that I received was perfect for a beginner or an experienced trader. 

By following his guidelines, I got the trading bots up and running in no time.

The bottom line is that I have recommended his training to everyone that has expressed an interest in learning how to use trading bots… and will continue to do so!

Unfortunately, he does not often open this training to the public.

And honestly, this training is so exclusive and proprietary in nature that I can’t even tell you anymore due to a non-disclosure agreement (NDA).

So, if you even remotely think you may want to be part of the next training session, when, and if, it opens up again, be sure to sign up for our newsletter to get notified.

These next couple of income sources are things that are certainly not completely passive.

They do require time and effort, but they are also things that you may already be doing. So, by incorporating some small changes into the way you’re already doing things, you can earn crypto easily.

While I have done these items I’ve already listed above, I have to admit that this next one is something that has completely morphed since my time as a kid. So, for this next income source, I enlisted the help of my grandchildren.

Play-to-Earn (P2E)

I’m old enough that playing video games when I was growing up meant heading to the arcade and playing Ms. PacMan and Galaga… those were two of my favorites by the way…

Thanks to cryptocurrency and blockchain technology, the idea of multiple player online gaming is being brought to Web3. So, if you relish playing video games, this might be an enjoyable way to earn some extra crypto.

Using Play-to-Earn (P2E) games and blockchains like The Sandbox (SAND) and Decentraland (MANA) is a great way to get the entire family involved in cryptocurrency.

With P2E gaming platforms, you now have the opportunity to make real-world money while playing games. While most earnings that come from this venue are nominal, there are already entire gaming groups that play for large bounties.

While using this income earning method definitely allows for honing gaming skills, it also allows for a fun and safe way for the entire family to learn about and interact with cryptocurrency.

So, If you or someone in your family is a gamer, then this can be a win-win.

I’m certainly thankful for the opportunity that Play-to-Earn games provide, however there are other daily options that can provide additional income options.

Monetize Daily Activities

One thing is for certain, the easier it is to earn crypto, the more likely someone is to complete the task.

With this thought in mind, why not earn cryptocurrency for things you already do on a daily basis.

Let’s take a look at some options…

Crypto Credit Cards

We use credit cards to make purchases every single day.

Some credit cards already in our wallets probably provide you various incentives when you use them. These incentives are usually things like cash back or travel miles.

But what if there were a way to use your credit card and get Bitcoin (BTC) back as a reward?

Make no mistake, there are already several. However, I use and prefer the Gemini Credit Card.

This credit card allows you to earn between 1-3% BTC back on each purchase you make. 

Gemini credit card

Amazing right… you can earn Bitcoin for each purchase you were already going to make.

This means that while you’re paying for everyday items like groceries or gas, you can also be collecting rewards in the form of cryptocurrency. Not only are these cards convenient and secure, but they provide a great way to start accumulating crypto.

If you want to use the Gemini Credit Card to earn BTC, once you have an account with Gemini, you can complete the simple online application. If you qualify, you’ll receive notification immediately.

While having a credit card that earns you BTC is great, being able to earn BTC when you shop at your favorite store is also a plus.

Shop With Lolli

Shopping online using an app to find you the best deal or earn you cash back is nothing new. But shopping online with an app to earn you Bitcoin back is.

I use and recommend shopping with Lolli.

Using Lolli, you can earn BTC back for every qualified purchase you make from any of their more than 10,000+ stores. 

The amount of BTC you can earn varies by store, but once it’s earned, the BTC is credited to your account at the price of BTC at the time of the transaction.

Frankly, that’s amazing… the BTC you’ve earned is allowed to appreciate with the price action of Bitcoin.

I use and enjoy Lolli so much that I have dedicated an entire playlist to it on my YouTube channel.

PRO TIP: To maximize your BTC rewards, use Lolli and your crypto rewards credit card to shop online and earn BTC from each!

Crypto Income Considerations

As with most things in life, there is always something else to consider and understand before making a decision. This is also true when it comes to these options for making an additional cryptocurrency income.

Let’s review a few of those considerations and understandings…

What Income Method Fits Best?

We’ve all heard the term, one size fits all.

While convenient in certain circumstances, it is not at all true, especially when it comes to deciding the best way to make an additional income.

When deciding what option is best for you, be sure to take into account your personal preferences as well as your knowledge base.

If you don’t enjoy what you’re doing, or at least enjoy learning about what you’re doing, eventually you will give up.

If you do, then what was the point?

If you are unsure about the best way to utilize crypto to provide you an additional income, I suggest that you start out small. Dip your toes, as it were, into one of these options and see if it’s for you.

Once you decide which methods may be suited for you, it will be time to focus your energies.

Master One Method

You’ve probably heard the phrase, jack of all trades, master of none.

While this idolatry has its place, when it comes to creating an additional income with cryptocurrency, it is not true.

Once you’ve narrowed your choices of income streams down, it is best to pick one, and learn everything you can about it, and master it before moving on to another.

By starting out small, learning and working your way up, and building a solid foundation as you go, you can build a long lived income stream. This will allow you to learn from each success and failure, so that you may use that knowledge to improve your crypto income earnings in the future.

And make no mistake, there will be failures along the way. Patience and persistence are key traits when it comes to making an additional cryptocurrency income.

So, don’t be discouraged if it takes a while for you to find the right fit, or the money making method that’s best for you.

As you begin your journey of mastery, you will undoubtedly discover the secret of passive income.

Passive Income is Not Completely Passive

Earn passive income… Sounds great, right?

Now you can sit back and watch the money roll in!

Well, not quite!

You see, here’s the paradox… earning a passive income doesn’t mean that you can make money without doing anything at all.

You still need to put in some effort. 

The amount of effort, and the consistency of that effort vary depending which income generating method you choose. 

But one thing is certain, effort is required!

For most of the passive income options I’ve presented above, most of the effort, and investment (if any), is required upfront… to “get the ball rolling,” as it were.

But regardless when, and how much effort is necessary, go into the process understanding that “you can’t get something for nothing”… you will need to put in time or money… or both.

Crypto Income Conclusions

Having cryptocurrency make money for you is definitely possible. This income can be used to supplement your existing income or eventually replace it.

While some of these income producing options are more passive than others, time, effort, and money may be required initially and throughout your income generating efforts.

Choosing the best income option for your needs is essential before you begin. Be sure to re-evaluate as you continue and adjust as needed to produce the results you desire.


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