Top 5 Ways to Earn Money With Cryptocurrency in 2021
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Do you want to make money with cryptocurrencies? Well, who doesn’t! Therefore, in this article, I will share some of the best ways to make money in the crypto sphere.

1. Buying & HODLing

Skills: Beginner

One sure way to make money in cryptoland is to buy long-term or TOP 10 cryptocurrencies that have a basic use case and hold them until they reach a fair market share.

For example, cryptocurrencies like:

  • Bitcoin
  • Ethereum
  • DOT
  • VET
  • Cardano

Are less volatile and probably a more "solid" investment in the years to come. A great place to start would be the cryptocurrency exchange like KuCoin, where you can buy crypto with credit card and HODL easily.

However, this is NOT investment advice, but an example of how to pick the right unicorns for you.

2. Lending

Skills: Beginners

By using DeFi lending platforms, crypto investors can earn a steady stream of passive income without active participation. They earn it through interest payments on the digital assets they have lent to others.

Take, an NFT marketplace, as an example.

Borrower can receive loans whilst providing their NFT as collateral. Hoard’s platform provides lenders with a tool to achieve high profits and a way to acquire desired NFTs (in case of foreclosure). The advantage of this is that the lender can use the functionalities of NFT (e.g., in-game/app). Also, a lender can earn additional money by renting out the NFT to third parties or collecting the profit that the NFT generates (e.g., rent if it represents ownership of a virtual weapon).

All in all, you can use your NFT as collateral to obtain loans in cryptocurrencies or put your extra stablecoins to good use to generate passive income.

How much passive income can lenders earn? On Horde, this will depend on several factors, including the value of the NFT, supply, demand and loan terms. Borrowers must pay the interest they agreed to when the loan was confirmed.

3. Yield Farming and Liquidity Mining

Skills: Intermediate

Isn’t it better to make money from your crypto holdings instead of leaving them unused in your wallet? Yield farming makes that possible. Yield farming involves people locking their cryptocurrencies and receiving rewards according to the number of coins they lock. What exactly is the impact of locking cryptocurrencies on the ecosystem?

DeFi solves liquidity problems through liquidity providers (LP) which pool their funds to create liquidity to support a DeFi protocol. These liquidity providers (LPs) are individuals who choose to lock their coins for a reward. In other words, they are yield farmers or liquidity miners.

One of the challenges of becoming a liquidity provider is the volatile loss, which is something to watch out for. However, there are platforms like Bancor that allow you to provide liquidity without worrying about volatile loss. It’s likely that in 2021 and the coming years, we will see more DEXs coming out with your own ways to handle the impermanent loss.

Binance Smart Chain and Ethereum protocols are two well-known protocols that support platforms for yield farming using Binance Smart Chain (BSC) tokens and ERC-20 tokens, respectively.

One of the best examples of ETH is ZKSwap. ZKSwap is a leading automated market maker and that leverage layer 2 transactions using ZK-Rollups. The decentralized exchange protocol has risen to the top of the DeFi layer-two DEX platforms with a current 24-hour trading volume of more than $70 million and TVL (Total Value Locked) of more than $800 Million leaving all layer two DEXes behind and most of the other established DEXes.

As with any project, yield farming is laden with risks — ranging from smart contract risks to liquidation and exit scams. DeFi users must be well aware of these risks to avoid preventable losses. But you are happy to take risks, yield farming may be something for you.

4. Staking Cryptocurrencies

Skills: Beginner

The difference between staking and yield farming is that in yield farming, two coins/tokens are usually deposited in a 50:50 ratio. The user receives Liquidity Pool (LP) tokens in return to be deployed in the liquidity pool. Still, in staking, a person can deploy a single coin/token into a staking pool in exchange for a reward.

People who stake have the chance to earn through incentives of the staked asset's protocol and price increases. Currently, you can stake many coins, and on, you can get an overview of how much return you will get. There are not many coins where you can use different methods to earn extra money. For example, Hoard Marketplace is a service that allows users to trade, buy, sell, lend or rent their NFTs such as in-game items, digital art, domain names and more without the risk of a volatile loss.

Staking is a great way to earn because you get the double benefit of the price appreciation for holding good crypto coins (if you have the right one) plus the added reward as dividends for staking them.

Staking is basically holding crypto coins non-stop, that is, 24/7, earning you new additional coins as rewards for staking and securing the blockchain network.

While staking can be a bit more "complex" if you do it directly from a dedicated wallet or a blockchain, the best cryptocurrency exchanges like Binance, Kraken, KuCoin and others now offer in-app staking for many assets.

5. Masternodes

Running masternodes of cryptocurrencies to earn smart passive income is also a way to earn in the cryptosphere. A masternode is simply a cryptocurrency wallet or computer wallet that keeps the full copy of the blockchain in real time, just like you have Bitcoin wallet, and is always running to perform certain tasks.

Various cryptocurrency networks pay masternode owners to perform such tasks. However, to run a masternode, you must have a minimum number of coins to get started. The minimum amount to get started with a masternode is different for all cryptocurrencies, but it is usually 1,000 to 25,000 coins.

Some proof-of-stake currencies that have masternode functionality are:

  • DASH
  • PIVX

There are many different opportunities to make money with Bitcoin & cryptocurrencies. It is not that difficult. However, be aware that some scammers out there want exactly one thing: Your money!

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