What are cryptocurrencies or how to earn 6000% profit

Decentralized digital currencies are just beginning their victorious march through the global financial market.

The topic of cryptocurrencies today is generating more and more interest.

Not so long ago, these virtual currencies were in demand only among individual enthusiasts and IT specialists, but by now their total audience already amounts to millions of people around the world.

And, apparently, decentralized digital currencies are just beginning their victorious march through the global financial market.

Interesting fact

There was a incident in the beginning of 2010, when user of one of western cryptocurrency forums ordered to himself two pizzas with delivery for 10.000 BTC, and another participant of community did it too. At that time 10 thousands BTC were equal to $50, but in 2013 the exchange rate was $1100, thus, a guy who bought bitcoins for just two pizzas was able to sell them for $11 million, and today – for more than $25 million.

What are cryptocurrencies and how do they work

A cryptocurrency is a digital currency that uses cryptography and mathematical algorithms to create a secure, anonymous, transparent and potentially stable monetary system.

Криптовалюта

They cannot be stolen or traced, they are not issued by banks, but by the users themselves, who use special programs and calculations to create new cryptocurrencies, that is real money (mining – cryptocurrency mining), which is why this system is unique and so in demand.

Cryptocurrencies rely solely on mathematics, not the words or actions of government or financial institutions, and cannot be changed by an interested group of individuals. They are not tied to physical commodities (like gold, for example) and cannot be controlled by governments or official financial institutions.

Although cryptocurrencies are currently considered a novelty, they have actually been attempted over the past two decades. But only with the birth of Bitcoin did it finally become clear that the idea is really promising, and the topic began to attract the attention of a large number of enthusiasts around the globe.

The most popular cryptocurrencies and how to earn on them

Below under the spoilers you will find information about the best and most profitable cryptocurrencies on the exchange and information about how much you could earn from them!

Bitcoin

Что такое Биткоин

Bitcoin (BTC) is the first and oldest cryptocurrency, appeared in the beginning of 2009, when a person (or group of people) with a nickname Satoshi Nakamoto published on the internet the protocols and instructions for making anonymous, decentralized and self-regulating digital currency, based on new principles, unprecedented at the time. At first, the financial world met Bitcoin rather coolly, as few people believed in the great prospects of this instrument, but there were such people anyway.

Interesting fact

In 2009, when few people knew about bitcoins, Norwegian student Christopher Koch, who was writing his thesis about cryptography, bought 5.000 BTC for 150 NOK, which was almost $27 at the moment. After the paper was handed in, he quickly forgot about his purchase until the lightning burst of bitcoin in 2013. Koch then recalled his earlier purchase and found that 150 kronor turned into 5 million (or $886,000 at the exchange rate at the time), for which he was able to buy an apartment in one of the richest areas of the Norwegian capital.

Bitcoin is the locomotive of the cryptocurrency market, pulling all other altcoins with it as it grows.

Заработок на криптовалютах

Some may say that the time of big earnings on bitcoin is in the past, because now its price is already high enough, but this is not true, because big rises are often followed by equally sharp declines. But the growth still prevails and its rate is simply staggering.

Note that: Something like that is hardly possible even at the most volatile pairs like USD/RUB, USD/ZAR, USD/MXN, and it is almost unreal to imagine that in the current situation of the world crisis Microsoft or Facebook shares will suddenly grow by 300% in 3-4 months.

The exchange rate of currency pairs usually does not change by more than 3-5% per day, while bitcoin can rise or fall by tens of percent. This way, trading even without margin you can earn huge money, for example if you buy 1 BTC at $770 in the middle of January 2017 and sell it at $3000 in the beginning of June, you can earn 389% of profit without leverage. If you bought it on the exchange with a leverage of at least 1:25, just imagine.

In the future, according to most analysts, the bitcoin price can grow even more and there is no reason to doubt it, because the cryptocurrency market has not yet reached its peak of development, and only starts to master the world of big finance and the markets of many developing countries. For example, in mid-2015, when the rate was about $200-300, experts predicted its doubling during the year (and it happened: in mid-2016 the value of bitcoin exceeded $700). At the end of 2016, various analysts predicted the growth of quotations from $750 to $1000-2500 during 2017, and this forecast has already been exceeded.

Tim Draper, the creator of the successful venture fund Draper Fisher Jurvetson, predicts the growth above $10,000 for bitcoin in the nearest future. Analysts of the largest banks predict the price of $ 100 thousand if bitcoin will gain popularity among common people.

Ethereum

Ethereum

Ethereum Classic owes its emergence to hacking, because until July 20, 2016 there was just one cryptocurrency – Ethereum. However, after vulnerabilities were discovered in the blockchain of the Ethereum-based project The DAO, which allowed hackers to steal millions of digital Ethereum coins, the community led by Vitalik Butorin decided to make a hard fork, which was not supported by all Ethereum network members.

Thus, the cryptocurrency Ethereum Classic (ticker ETC) appeared, which is a variant of Ether with the classical program code and blockchain structure, as in 2013, when it appeared. The official version of Ether, supported by the majority of the community and Vitalik Buterin, has the name Ethereum and the ticker symbol ETH. There is no need to confuse them, because the difference in price between them right now is enormous.

Until March 2017, the price of Ethereum Classic was in the range not exceeding $2 per token, but on the wave of growth of demand for both ether and cryptocurrencies in general it began to increase very rapidly and in June 2017 already exceeded $22, that is, it grew more than 10 times in 3 months.

For comparison, just imagine, is it possible that Apple shares would suddenly rise in price from $142 to $1,420 in 3 months?

Now think about what the return would be if you bought 100 ETC tokens in early December 2016 at $0.75 and then sold them at $22.5 in early June 2017.
Note that: After investing $75, after just six months you could sell your 100 ETCs for $2250 already, making a fantastic 3000% profit!

Etherium Classic, even compared to Bitcoin, is a rather young cryptocurrency, barely starting to reveal its true potential. It’s quite possible that in near future the ETC’s price will reach several hundreds or even thousands of dollars, so, for now everyone who wants to get rich quick and easy still have a real chance to jump in the departing train.

Ripple

Ripple

Ripple (ticker XRP) is another popular representative of altcoins, who appeared in 2012. As of mid-2017, Ripple ($10.01 billion) ranks third behind BTC ($42.61 billion) and ETH ($34.46 billion) in terms of capitalization. Ripple’s value ($0.25 as of mid-2017) is significantly behind both the leading cryptocurrencies and many cryptocurrencies with much smaller capitalization (Lite, Dash, ETC, Zcash, Monero), which is actually not bad, because it leaves a wide field of opportunities for the growth of quotations in the future.

Till March 22, 2017 the value of one XRP token was about $0.007, but in the period from March 23 to April 3 of the same year the price of this asset on the Poloniex exchange increased more than by 1047% – up to $0.0733! Is it possible to do this with trades in traditional instruments? Definitely not. Perhaps, only cryptocurrencies nowadays can provide such superprofits in such a short period of time.

But how does it look in numbers in real trading?

Let’s say you bought yourself 100k Ripple tokens for $700 in February-March 2017, selling them in mid-May at $0.42, you would have already gained $42k or a fantastic 6000% in just a couple of months! This is more than a profitable deal, but by June, the price fell back to $0.2-0.3, and it’s unknown where the quotes will go in the next few years – but judging by the overall growth of the cryptocurrency market, highly upward, because Ripple is a highly sought-after and at the same time highly undervalued distributed digital currency. The maximum number of tokens, though large (100 billion), is known in advance, and as it gets closer to being produced, the cost could increase dramatically.

Litecoin

Litecoin

Litecoin (LTC), which appeared in late 2011 and for a long time performed the role of “digital silver,” as of the middle of 2017, is only sixth in terms of capitalization ($2.1 billion) among all cryptocurrencies, not included in the top three or five. However, this by no means diminishes its value and profitability.

Trading most of the time in the $2.5 to $5 per token range, Litecoin has long been in the shadow of other currencies, nevertheless not falling out of the top 10 in terms of capitalization. And now, at the end of March 2017, its finest hour has come – for the first time since 2013, the price reached 10 again, and at the beginning of May, it already exceeded $38.

The main reason was, of course, the launch of Segregated Witness (SegWit) in Litecoin network, just waiting for which LTC already rose in price from $4 to $11. 100% support of the innovation gave the growth up to $38 at the beginning of May 2017. Of course, the overall growth of the entire cryptocurrency market in this period also played its role.

But how much could a trader earn if he traded LightCoin at that time?

Note that: If you take the average LTC price for February-March 2017 to be around $4, then by buying 250LTC for just $1,000 during this period and selling them at $38-40 apiece in May-June, you could make $9500-10000 from this transaction, which is an impressive 950-1000% profit.

Despite the fact that Litecoin is already quite an old currency and it is actively being pressed by younger competitors, it is too early to write it off, and it is very likely that it can grow to hundreds of dollars in the next year or two, following Bitcoin and Ether.

Dash

Dash

Another popular anonymous distributed cryptocurrency, which appeared in the beginning of 2014 and recently changed its name several times. Initially called XCoin, then Darkcoin, and since March 25, 2015, known as Dash, it, like Lightcoin, for a long time was first in the shadow of Bitcoin, and then Ether, slowly gaining weight. The price of this currency fluctuated in the range not exceeding $10 per token, and gradually increased.

It’s a good time to estimate the approximate income from possible transactions over the past six months. So, if a trader opened a buy trade somewhere in the middle of January before the rally, when it was realistic to buy the Dash at $11.50-12.50, and took $100 dash at $1200 and then sold it in early June at $195, he would get $19500, Which is 1625% of the amount of the original investment, and this is despite the fact that the figures taken are not the most extreme, because it was quite possible to catch a sharper difference in the rate, buying Dash in January at $10.60 or even earlier in November 2016 – at $8.5 and selling at $196.

Note that: The income in such a case would have been 2305% or $19600-850=18750 net profit, not counting the invested funds.

Making money on cryptocurrencies – the main waysMining

Майнинг

Direct mining is the first and most obvious way to make money on cryptocurrencies. The essence is in complex computing processes, where computer power plays a key role.

However, the days when miners could run the process on their home PC and watch their wallets fill up with virtual kopecks, unfortunately, are long gone.
Today you can’t get rich that way, because the complexity of mining cryptocurrencies is growing. For example, previously simple PC processors were good at this task; later they were replaced by high-performance GPUs with CUDA and OpenCL support, and now special computing equipment is used for this purpose.
It is produced both in Europe and in Asian countries, and its cost, depending on the capacity, ranges from several hundred to tens of thousands of dollars. As for the process itself, everything is simple – the device is set up to mine coins (to do this, you need to register at one of the pool sites), and after the money is ready, it can be exchanged for real currency or you can pay for purchases.

What cryptocurrency would you like to buy?Cloud mining

Used as an alternative to traditional mining. In this case, a person buys the computing power of a remote computing center and uses it to generate digital money. The benefit is that there is no need to puzzle over the purchase, setup and maintenance of equipment and pay for electricity. However, the payoff will also be less, since the online service will of course charge its share.

Trading on currency exchanges

Trading on the rise and fall of the exchange rate is the easiest and most profitable way to make money from cryptocurrencies for beginners. Like the classic version, the main strategy here is to buy the currency at a low price, wait for the price to rise, and then sell it and make a profit. Given the record rate of growth, it is not difficult to make money on the exchange.

The future – does it make sense to invest in cryptocurrencies?

Будущее криптовалют

According to many experts, in 5-10 years the rate of popular digital currencies will be tens of thousands of dollars per coin. And such prospects are quite realistic. For example, Barry Silbert (head of Bitcoin Investment Trust) said that Wall Street is already preparing the base for direct trade in bitcoins and other popular cryptocurrencies are in line. In addition, many banks are already heavily involved with these currencies:

  • Canada’s largest bank, Royal Bank of Canada;
  • National Bank of Abu Dhabi, the largest bank in the UAE;
  • British bank Santander;
  • Germany’s ReiseBank;
  • Italian UniCredit;
  • and many others.

These are new opportunities for them to make profitable, safe and transparent transactions.

There is also an opinion that over time, states will cool down to cryptocurrencies and never officially recognize them.

However, whatever the case may be, over the last three years, the rates of popular cryptocurrencies from the Top 5 (even taking into account kickbacks) have increased significantly, and such financial market majors as American Express, Visa, Google and venture fund Andreessen Horowitz started investing in them. And that’s not counting the hundreds or thousands of lesser-known companies and individuals.

The founder of the hedge fund Global Advisors Daniel Masters believes that such activity shows that digital money technology is promising and the unspoken decision to give it the “green light” has already been made among the world’s IT elite. Therefore, the official recognition is only a matter of time, and those who want to make money on this topic better hurry up.

There was a incident in the beginning of 2010, when user of one of western cryptocurrency forums ordered to himself two pizzas with delivery for 10.000 BTC, and another participant of community did it too. At that time 10 thousands BTC were equal to $50, but in 2013 the exchange rate was $1100, thus, a guy who bought bitcoins for just two pizzas was able to sell them for $11 million, and today – for more than $25 million.

Source: https://smarternewsnow.com/2021/06/02/what-are-cryptocurrencies-or-how-to-earn-6000-profit/

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