Mining cryptocurrency is just like gold mining. The difference is that printing traditional money makes the state rich (but not for a long time), while crypto mining is available for anyone.
Mining is divided into two main types:
The first type of mining (PoW) requires computing power such as high-performance chips in video cards or ASICs (special mining equipment), as well as the corresponding technical skill of the user.
The second type of mining (PoS) is similar to the usual deposit in the bank. Briefly, a certain amount of cryptocurrency is required from the user, it is frozen and brings him constant income. More cryptocurrency - more income, it's simple! Passive earnings, like on a bank deposit. You receive interest from the deposit.
PoW mining has many drawbacks. You need technical skills, you need a lot of money, you need access to a powerful source of electricity, and you also need to constantly update your equipment.
ICO is a subspecies of investing in crypto startups. It was extremely popular in 2017, but a series of high-profile failures severely undermined investor confidence in it. You buy project tokens at a very low price at the very start. There is a high chance of making good money if the project succeeds. There are chances to lose money if the project team does not cope with their task or save money and hire a bad marketer.
In ICO, there are many scam projects, initially designed to deceive. Not knowing the sphere is not worth entering. In addition, projects can often establish certain rules for entering the ICO. It is not always possible for an ordinary user to comply with these rules.
An investment portfolio is the sum of all cryptocurrencies on an account. For literate traders or investors, this is not a random set of cryptocurrencies. It meets the user's chosen investment or trading strategy.
A subtype of PoS mining is a calm and smooth way to gain income by storing cryptocurrency on a wallet. It is mostly suitable for users who do not like to risk and prefer to agree on a small but stable income.
Trading is a great way to make money if you are confident in your nerves. The game on the cryptocurrency rate volatility has its own features that differ from the usual stock market or Forex. The crypto market is characterized by very sharp and large-scale fluctuations in asset prices. This is normal for the crypto market, and only traders with a cool head and strong nerves will make good gains here.
It is worth starting trading with funds that you definitely do not mind losing, and only after receiving a stable positive result one can increase his deposit. And it would also be a good practice to learn some theory and study strategies. Learn more in our next lessons.
Trading requires constant training from the trader and the study of a whole layer of knowledge about the psychology of the market, its analysis, and financial management.