Cryptocurrency: The future, an exciting but high-risk new asset class – or a potential scam? After stellar growth through 2020 and 2021, it’s clear that crypto is both legitimate and here to stay. It has established itself as a new technology and investment option, but the market has occasionally punished those who were over-optimistic. If you’re one of the many people who are interested in dipping their toes in the waters of crypto but are wary about the risks, don’t worry: here are nine ways you can build your portfolio without spending hard-earned cash from your day job.
- Freelance for crypto
If you have skills that are in-demand, from software development to marketing or graphic design, you can put them to good work and earn crypto in the process. LaborX is a platform that connects freelancers directly with customers, organising work securely using smart contracts and digital agreements, and paying in a range of different cryptos.
While there are lots of traditional freelancer websites out there, LaborX is the leading blockchain-based platform of its kind. By doing away with middlemen – removing a series of inefficiencies and single points of failure – LaborX is able to charge significantly lower fees, meaning you receive more of your pay. Users can create fixed-price gigs if there’s a specific service they want to offer, or browse for jobs that employers have posted. Payment, in one of several currencies on different blockchains, is automatically made to your built-in or external wallet when you complete the job.
- Get crypto cashback
How would it feel if you received a little kickback in crypto every time you spent money? In other words, just by going about your daily business, you get to ‘stack sats’ (the crypto term for slowly building your crypto savings with small, regular buys).
You can do just that with debit cards issued by crypto providers like Crypto.com, who give crypto cashback of anything from 1-8% on all purchases. It’s well worth shopping around to find one that offers the best combination of percentage rewards, type of crypto, and other perks, given your circumstances.
Then there are the blockchain services that allow you to earn crypto rewards as you use them. Take LaborX again. Every time you complete a job, a proportion of the fee is converted back into TIME (the native currency of the platform) and distributed between freelancer, employer, and other members of the ecosystem as a kind of bonus.
Blockchain gaming is taking the world by storm. The integration of crypto-economic models into games has enabled the creation of a completely new sector: Play-to-earn (P2E). Instead of requiring users to purchase games or buy upgrades in a ‘Freemium’ model, users can actually earn crypto by playing their favourite blockchain-enabled games.
Blockchain games are powered by non-fungible tokens, or NFTs – special unique tokens used to represent characters and in-game items. These NFTs, as well as the currencies players earn by participating in the game, can be traded on built-in and external marketplaces for other cryptos – enabling you to build a portfolio simply by playing games like Axie Infinity (the world’s most popular P2E title). If you need a little help getting started, or want to borrow some NFTs to increase your in-game earnings, you can even consider a scholarship or joining a guild like CGU. If Axie isn’t your thing, check out some of the other P2E games on offer!
Mining is the original way to acquire crypto, earning it for helping to secure the network and process transactions. Back when Bitcoin launched, mining was the only way to get your hands on BTC, and you could do it on a simple desktop computer. Unfortunately, those days are long gone, and if you want to mine bitcoin now, you’ll need some expensive specialist hardware and a lot of electricity. It is possible to mine other cryptos using a GPU (gamers may consider repurposing their rigs when they’re not playing) but it’s still a competitive world. Still, if you know what you’re doing and have access to the right hardware, it can be worthwhile.
While proof-of-work networks like Bitcoin require dedicated hardware to mine them, others take a different approach. In a proof-of-stake network, users ‘stake’ their coins to secure the blockchain, and collect transaction fees (and sometimes additional rewards) for doing so. Solana, for example, typically allows users to grow their holdings by 7-8% per year by staking.
This approach has been extended into DeFi, and many projects now allow users to stake or lock their tokens in a smart contract, in return for a proportion of platform revenues or new tokens. For example, TIME tokens can be staked in the TimeWarp contract to earn a share of income from the Chrono.Tech ecosystem.
Liquidity mining is a slightly different take on regular staking. DeFi platforms are built around the idea of shared liquidity. A decentralised exchange like Uniswap, for example, pools funds from many liquidity providers, and allows users to trade against these, instead of using the order books of a centralised exchange. Liquidity providers are incentivised to contribute tokens to these pools with payments made up of transaction fees and, often, new platform tokens.
This has given rise to ‘yield farming’, where liquidity providers move their capital around to earn the best possible returns, actively hunting out the highest-paying opportunities.
Trading crypto can be risky, but if you know what you’re doing then you can make a healthy return on your holdings. You’ll need a solid understanding of technical analysis and, as importantly, excellent risk management.
Generally speaking, the shorter the time frame you use for trading, the greater the risk. Day traders seek to open and close their positions within a few hours, while swing traders look to capture market movements that last a few weeks. Position traders aim to capitalise on the big moves the market makes, profiting from as much of the overall macro trend as possible. (As it happens, it’s historically also those who take the long view in crypto – the HODLers – who have won outsized returns.) Finally, it’s worth bearing in mind that altcoins are typically more volatile than bitcoin, therefore providing greater returns when you get it right, at the price of losing worse when it doesn’t.
- Check for airdrops and forks
Sometimes, the universe seems to give you a gift. In the crypto world, that can happen with surprising regularity – and generosity. From time to time, you’ll find that value has been ‘dropped’ into your wallet for doing nothing at all.
Airdrops are a common way for DeFi projects to engage their communities and distribute governance tokens. Over the past year, exchanges like Uniswap, 1inch and the Ethereum Name Service (ENS) have airdropped tokens worth thousands of dollars to everyone who has used their services in the past. Check earni.fi to see whether you have any airdrops to claim.
Similarly, if you have funds in an address when a blockchain is ‘forked’ (notable examples being Ethereum Classic splitting from Ethereum, and Bitcoin Cash splitting from Bitcoin), you’ll receive an equivalent amount of funds in the new token on the forked blockchain.
- Search for bounties
Lastly, there are lots of projects that will give you tokens for helping build and promote their software. That might mean helping to develop the protocol itself, but equally, it might simply mean liking and retweeting a post, or inviting new people to a Telegram channel or Discord. There are often competitions to reward those who work hardest to spread the word, whether that entails bringing in the most users or creating the funniest memes. Solutions like BountyHunters allow project teams to automate common tasks and distribute crypto to the community members who support them.