Why would I want to invest?
Firstly, if the value of the cryptocurrency goes up, your net-worth increases. Many people don’t directly invest lots of money into cryptocurrency because the volatility of the market, which could cause the value of the currency to decline. (You’d be losing money) This risk deters many people of investing into cryptocurrency and you can think of a cryptocurrency almost as a stock. So, here are some alternative ways to invest into the blockchain!
Mining a Cryptocurrency
Cryptocurrency mining is where you use a computer to perform mathematical calculations to keep the blockchain network secure. You are rewarded for mining in the currency you choose to keep secure. This is one huge benefit to a cryptocurrency. Instead of going outside and mining for gold, which would not have a lasting effect on society, you’re mining for the benefit of blockchain security!
Mining at home
You can rent out your PC’s hardware to mine cryptocurrency. (not literally taking it out and shipping it to someone) This method is somewhat risky as you could potentially slow down your PC overtime. But hey, if you have a good PC, you might be able to make a quick buck or two. This method is much more recommendable to someone who may have more than one PC, as they can mine on the older one and keep the new one for their personal needs! Mining at home is easy and free, except the electricity bill, which may increase. Another alternative to renting out your PC is buying dedicated hardware to mine. This can be much more expensive and wouldn’t be nearly as easy compared to using the hardware you already have. The trade off would be efficiency and potentially profit.
Software to use when mining at home:
Cloud Mining
Cloud Mining is a great alternative to mining a cryptocurrency yourself! Instead of renting out your computer’s processing power, you can pay money to rent out others’ processing power. This may cost more initially, though there is much less risk and much easier to manage than mining yourself.
Software/websites that support cloud mining:
- NiceHash
- Minergate
- Hashflare (I personally recommend, you make your money back after 140 days)
- Genesis-Mining
- Hashing24
Trading a Cryptocurrency
Instead of mining a single cryptocurrency, people will often trade their currencies. As I’ve mentioned before, these currencies are similar to stocks. Trading a cryptocurrency is much more eventful than mining one. It can be very exciting to see a currency that has just risen be traded for much more than you may have gotten yesterday. Instead of focusing on one single currency, traders focus on many currencies. Trading does require a significant amount more than basic cloud mining to be profitable, however, if you were to go and buy dedicated hardware for mining, spending that amount on trading could be worth the money rather than mining.
This post was written in collaboration with @haxmat - Thanks again for the expertise!