1. Mining (risks - low)
This type of earning is the most widely heard. Basically, mining is the processing of transfers of cryptocurrency between users. For this, the miner is paid a fee. The method is very attractive, because the work is done by the equipment (computers or special equipment), and the money is received by the owner. It creates the illusion of easy earnings - you bought a box, plug it in, and it begins to make money for you.
In reality, everything is more complicated. About three years ago, an ordinary computer was enough to make money. Since then, the complexity of algorithms has grown. More powerful machinery is needed to do the calculations, and therefore the rewards. Now you either need to combine several video cards into one or buy special equipment, sharpened for mining a specific cryptocurrency, which is called ISIC ("Icic"), and use it.
The main disadvantages are:
- Initial investment from several hundred thousand rubles;
- first the equipment must pay off, and then the profit will go;
- a constant increase in the complexity of the algorithms, and as a consequence - a constant decline in income;
- mandatory conditions for smooth operation of equipment - a place for placement, heat removal, Internet and electricity, air filtration (otherwise the mechanical parts fail quickly), a specialist who will promptly replace the burnt-out components.
- Payback is much higher than investments in bank deposits or real estate;
- minimum time costs for generating income (almost passive);
- obtaining a highly liquid commodity in the form of cryptocurrency. Now the average payback of mining equipment is around 10 - 12 months (the figure strongly depends on the rate and the cryptocurrency that is mined).
2.Trading (risks are high).
A trader is a player on the exchange, who earns on the fluctuations of cryptocurrency rates.
The volatility (i.e. the change in the rate of the cryptocurrency per unit of time) is very high. It can rise by tens of percent in a few days and then fall in the same way.
The scheme for earning is simple: buy at the beginning of growth, and sell at the end of growth. If everything is correct, then in a day or two you can make 10-20% to your capital. Then wait for the fall and buy again. And so on in a circle. It is real to double or triple your capital in a month. There are cryptocurrencies, which can jump by 100 - 200 percent or more in a few days.
The profitability of trading is very attractive, but I forbid my students to do trading. Until they understand the peculiarities of the crypto market and the risks associated with it.
It is important to understand that trading is a job, a profession. Before you get into it, first of all, you need to be trained. Second, you need to form skills - that is, actions brought to automatism by repetition. And this, as a rule, takes months.
The main investment in learning trading will not be in courses, but in the formation of skills. At this stage, most of those who want to become a crypto-trader are eliminated. A neophyte trader flush after courses with the excitement of large earnings makes a couple or two thousand dollars (sometimes even dozens), and immediately cools down to this way of earning. He wants quick money, but here he has to sit and draw figures of the analysis for a long time to get his hand in it.
My students practice for at least a month or two before I allow them to trade on their own. The exchange itself does not produce money, it redistributes it. From inexperienced to experienced, from hotheads to cold stamina.
The main advantage of trading - high profitability. The main disadvantage - high risks. This is a work for professionals with strong nerves (it is a work, but not a way to invest their money).
3.Arbitrage (medium risks).
There are a lot of crypto exchanges, and the difference between exchange rates on them can be quite significant. It is especially noticeable when sharp changes of rates begin. At such moments, you can buy on one exchange, then transfer to another and sell there.
The main advantage of this method is that good profit can be obtained in a short period. But this requires a sufficient amount for investment and a well-thought-out scheme for the transfer of funds from the exchange to the exchange.
The plus of this method - a simple algorithm and average risk, the minus - exchanges are constantly changing the interest rates and input-output schemes. Lately transfers between exchanges could take hours, and sometimes days. Which sharply increases the probability of losses.
4. CryptoPIF (medium risk)
The crypto economy has already seen the emergence of Mutual Funds analogues. Management companies collect combined portfolios of cryptocurrencies for you and bring them to a certain index. All you have to do is buy that index. Depending on its rise or fall, if you sell it in the future, you will or will not receive income.
Pros - low entry threshold (thousands of rubles), and no need to think what to invest in, disadvantages - cryptocurrencies in the index, as a rule, rigidly formed.
5. Trust management (risks - medium)
Already by the name it is clear that the money will have to be entrusted into management. To whom? A cryptocurrency broker or a crypto-fund. They will decide what to buy and what to sell, when and how. Their earnings are a portion of the profits made from managing your money. The percentages are negotiated individually by each fund. The most common scheme is 50/50.
Pros - you don't need to think about what to invest in, disadvantages - as a rule, a high entry threshold (millions of rubles).
- Both cryptoPIFs and crypto funds have big risks asso seciated with the lack of a legal framework and a short period of time to build up the reputation of managers