How and how much you can earn on blockchain

Blockchain – what is it?

Blockchain technology is a confusing word for many people. Let’s try to explain in simple words what it is and what it is “eaten with”. The Blockchain block system permanently stores all information about the cryptocurrency that was developed on its platform.

For a better understanding, let's look at blockchain using Bitcoin as an example.

Each user of this network is identified by a unique code. It is impossible to make any changes to it, since it has a decentralized nature. In other words, transactions are recorded on millions of computers at once, and not within one device.

As soon as new transaction information enters the network, it is formed into a blockchain. Changing or removing it from there is unrealistic, unless, of course, you are the owner of a super quantum computer worth billions of dollars. And a colossal amount of resources, as well as knowledge, will be needed to make changes to the blockchain network. That's why she's so reliable.

How the blockchain system is used and works

Before considering methods of making money on blockchain technology, you should first clarify the mechanics of its work. In other words, delve into his work processes. We invite you to consider this technology using the example of the BTC cryptocurrency.

Let's figure out what its blockchain consists of:

In each subsequent block, the hash is stored . A data array or hash is a modified bit string that is formed based on various input information parameters. For a better understanding, let’s take the number “2” and this text. As a result of their compilation, a hash will be formed approximately as follows: Gjdm4563GmL2555522JHGFFljmbfh. If another condition is added, the hash value will immediately change.
The process of forming hashes in new blocks.
Some important information . Separate from information about the sender/buyer, which is immediately hidden using an encryptor, there are transaction recipients, the hash of the block, and the transactions that determined this block.

A cryptocurrency built on blockchain is not afraid of hacking and hash rewriting. Since this technology is designed in such a way that after any intervention, the information in the blocks will be changed. Moreover, changes will occur throughout the entire blockchain.

Fraudsters are also well aware of the fact that identifying millions of PCs around the world and then hacking them will require cosmic power and money. After all, about 51% of all users calculate blockchains. You won't be able to hack everyone.

It is time to explore the advantages and disadvantages of the blockchain system.

Let's look at the positive and negative aspects of the blockchain system.

Blockhain: advantages and disadvantages of the system

So, first let's name the significant advantages :

Versatility. The introduction of blockchain technology is allowed in any environment in which a person conducts his business;
Openness . In the blockchain, all transactions have an open status. If you need to provide someone with confirmation of your transactions, you can show them in your transaction history;
Decentralization . All network participants have equal working conditions. Third parties do not take part in this process;
Reliability . The blockchain block system is therefore so popular that it is not possible to hack it.

It's time to consider the disadvantages :

Ample data storage capacity . According to the latest information, a minimum of 100 GB of storage is allocated for each Bitcoin blockchain participant;
Non-return of a previously performed action . After the first operation, the data is immediately written to the hash. In other words, it will not be possible to reverse the process in any way.

Advantages and disadvantages

There are both advantages and disadvantages to blockchain. Let's look at the advantages first:

Decentralization . Information about specific blocks of chains is scattered across various servers around the world. This ensures that if such data reaches strangers, they will not be able to do anything with it.
Acceleration of settlements for transactions . Banks need time to carry out basic transactions. Usually this is a period of several days. Moreover, banks have working hours and weekends. Blockchain allows transactions to be carried out around the clock, 365 days a year.
Transparency. Blockchains are almost always open source. Other people or developers can change it at their discretion. However, this makes it very difficult to change previously recorded information undetected. The latter circumstance makes blockchain a reliable technology.
Anonymity. Governments all over the world are trying to control the blockchain, but so far it is not working well. Therefore, the technology immediately appealed to most users.

Now let's move on to the cons:

Difficulty of integration. There are still difficulties in integrating payment systems into the blockchain.
High price. Blockchain is a volatile technology and is therefore quite expensive. For example, mining farms alone consume 16 TV/h per year.

Which industries use the blockchain system?

Let us recall that once upon a time the first cryptocurrency BTC was created on a blockchain platform specifically for making transfers in digital currencies. Later, the Ethereum project was created on its platform.

Through ETH, it was possible to expand the scope of application of blockchain technology by an order of magnitude. After all, “smart” smart contracts have appeared that work automatically. However, variables must first be specified in a special algorithm.

An example of a smart contract created on the blockchain

Let’s say that a company that delivers goods to different parts of our country is going to or is already working through smart contracts .

Let's explain at a glance how smart contracts created on the blockchain platform make doing business easier.

Let the carrier organization have the letter designation “ A ”. It intends to send cargo from city “ C ” to region “ D ” to a certain client “ B ” who ordered this delivery. But the client requests that delivery be completed within 3 days, no later. If everything is done as the customer requests, a certain fee will be paid.

To find a driver to perform a given task, the motor carrier (“ A ”) creates a “smart” contract. Payment for this work is frozen in his account. The driver (“ E ”), with his vehicle at this time, sees a newly created contract in which all the conditions for its implementation are visible. In other words, by opening this smart contract, the truck driver sees the mileage, where and where the cargo needs to be delivered, the price and delivery time, and other details.

Provided that everything suits him and he agrees to fulfill this contract, the driver (“ E ”) signs electronically that he agrees to deliver goods from city “ C ” to region “ D ”. The contract is assigned to him as the performer.

After it is completed, part of the money from the account of the trucking company “A” is transferred to the account of the driver “ E ”, and part remains in the form of earnings.

All transactions are recorded in the block system of blockchain technology.

Areas of application of blockchain technology

To understand the significance of the blockchain system, it is worth listing the main areas where it is already used:

Online services that allow you to confirm your identity . There are several good sites on the Internet. Among them are OneName, HYRP and BlockVerify. Using them you can easily confirm your identity. You just need to fill out a special digital form.
Voting . As an example, we would like to mention the University of Virginia. There, blockchain technology began to be used to falsify test results.
Copyright check . If you are a creative person, then be sure to use the Ascribe service. It contains a special registry. All the client’s original works are recorded there. As soon as they get into this toolkit, they begin the encryption process using a special identifier.
Real estate . Each completed transaction will be recorded and encrypted into a unique code.
Charity . Smart contracts on the GiveTrack platform show open statistics on donations.
Music. Once again about copyright identification, only in the music field. The Bittunes project will recognize the composition and its author and allow it to be resold to a second party.
Management and jurisprudence . Limitless possibilities open up here. To verify this, just check out the Borderless project. It allows you to combine the provision of services in economics and law. If you apply it to officials and authorities, there will be no bribery and corruption.

How does blockchain work?

A blockchain is a database that is a continuous sequence of blocks that make up a chain. Literally translated from English, the term is called a block chain. The number of blockchain platforms is actively growing. They developed most actively in 2014, but even now large sums, even millions of dollars, are being invested in such projects. Now crypto projects are trusted, which means it’s easier to make money on them.

Blockchain works according to a relatively complex scheme, but to simplify it, we have divided the process into five stages and will look at each of them in more detail, taking as a basis the transfer of funds from one person to another:

First, the transaction must hit the network. To do this, one user creates a transfer and sends it to another user, using the blockchain for this, since the commissions in the system are significantly lower than bank ones, and the transfer time is reduced to a minimum.
The next stage is the formation of a new block and inclusion of the completed transaction in it. For a transaction to go further, it must be confirmed using special algorithms. A new block is recent transactions collected in one place. A block is a new link that is added to the chain, and a timestamp is placed on it.
At the third stage, the block is sent out so that all participants in the system can check it. When a block reaches a user, their blockchain is updated and the database already includes the new block. This automatically happens on all computers that are connected to the blockchain.
After this, the block enters the chain, receiving a unique signature in order to be placed in the line of other blocks. Now everyone can see that the block has been added, but the information contained in it will be visible only to users who have access to it.
And now the last stage is the receipt of the transaction by the person for whom it is intended. To open a transfer, it must have its own key. It is unique, because the contents of the cell are available only to its owner.

Making money on blockchain involves using this scheme to your advantage. Moreover, we do not forget that money transfers are only a small part of the capabilities of this technology, although you can make money from it.

The most common ways to make money on Blockchain

The field of blockchain technology allows not only to create smart contracts for various businesses, but also provides the opportunity to make good money. We will talk about business directions in the field of cryptocurrencies in this material. In particular, ways to make money from ICOs, faucets, cryptocurrency exchanges, mining and bounties will be considered.

Mining

You can receive certain altcoins into your crypto wallets through mining. To do this you will need to have one or more video cards or more professional ASIC equipment

mining farms from our partner, IM - HotASIC.ru

Mining is the process of obtaining cryptocurrency through the calculation of complex mathematical problems.

If the computer equipment is turned on, the miner produces cryptocurrency. The main thing is that there are no interruptions in electricity and internet. When compared with other methods of obtaining crypto, mining is considered the simplest, but not the most affordable, since serious earnings will require large investments.

You can engage in mining on any one protocol PoW or PoS .

PoS protocol . Agree that it takes too long to pronounce Proof - of - Stake (proof of shares). Therefore, most miners call this protocol nothing more than PoS. This type of protocol should be considered by those who already have the main cryptocurrency (cue ball, ether, litecoin, etc.) in their cryptocurrency wallets. Mining using this protocol can be compared to placing a bank deposit and making a profit. The greater the deposit amount, the greater the earnings. PoS protocol, first purchase it using your cold wallets. There is a benefit from such mining and is about 5-20% per year;
PoW protocol . Also short for Proof - of - Work . Here, the miner’s earnings depend not on the amount of cryptocurrency in the wallet, but on computer power. Owners of crypto farms earn the most. The more powerful the computing performance, the more cryptocurrency is mined. Note that only those who are willing to invest at least several thousand USD earn money in this way. e.;
cloud mining is a type of PoW mining . This mining method can be used by those who are not ready to invest in expensive hardware worth several thousand US dollars. Simply put, this is mining for a retail crypto miner. Note that the profitability of cloud mining does not exceed 20% per year. However, there are 2 huge advantages ( low investment , and the absence of any equipment at all ).

ICO

For those who still don’t know what ICO , we advise you to quickly study this term. ICO stands for “ Initial Coin Offering ” (initial placement of crypto coins).

ICOs are organized primarily by those who need to raise a certain amount of money to further promote their crypto project. As collateral, investors receive tokens at minimum prices. When the investment amount reaches the required ceiling, token holders (investors) will be able to spend them by purchasing one or another service provided by this project, or exchange crypto coins for fiat money on the exchange at a more favorable rate.

At the same time, one should take into account the fact that the crypto coins purchased during the “ Initial Coin Offering ” do not give the right to make management decisions on the management of the project. They also cannot act as its shareholders, as is the case with holders of the lion's share of shares.

The only and most significant advantage of participating in an ICO is purchasing tokens at the lowest prices.

There are also certain risks associated with the loss of the entire investment amount. After all, it is unknown whether the project will be in demand in the crypto community, whether the project will turn out to be fraudulent, etc. Suffice it to recall the statistics on already conducted ICOs. Almost 80% of all projects after the initial placement of tokens lost their investors. Simply put, they took the money and that was it!

At the same time, we do not want to say that participating in an ICO is a futile activity. On the contrary, you need to learn to identify truly promising projects using the following checklist:

a clear road map whose deadlines are not missed;
the project is working and being tested in every possible way on the demo version even before the ICO;
the owners provide a clear explanation of why they are conducting the initial placement of cryptocoins and why the tokens themselves are needed;
there is an active dialogue with investors through social networks and instant messengers;
provision of project tokens without payment, that is, for some services from investors;
a sane explanation of how and where the investments will be spent;
in normal projects, staff receive no more than 30% of all crypto tokens. Also, this company should not spend them in the first year of operation after launching a crypto project.

How can an investor make money from an ICO? There are two ways:

save on fees for receiving services from the company in which the funds are invested;
Sell/exchange crypto tokens for fiat funds through a cryptocurrency exchange. Let’s remember how Ethereum tokens in 2014, as part of the ICO, cost $0.4, but a year later their value soared to $20.

Thus, if you have a really good idea that the world will approve, you can announce an ICO and raise funds to bring it to life.

Let's remember some successful projects that, as a result of the initial placement of cryptocoins, managed to collect millions of investments. The first project in our memory was called Storj. 6 days after the announcement of the ICO, he managed to collect as much as 30 million US dollars. For tokens, each investor can buy disk space, through which it will be possible to significantly increase the channel capacity.

Also worth noting is a project called Bancor. After launching the ICO, it raised $150 million in the first 180 minutes.

Trading

On the one hand, earning crypto by trading on a cryptocurrency exchange is not difficult. But if you delve into the essence of technical analysis, as well as the fundamental factors that have a great influence on crypto rates, then this is even a very complex way to make money.

If you take into account the fact that there is high volatility in the crypto market, as well as the unpredictability of the exchange rate of fiat money (USD, EUR), you can buy crypto money with great profit. We are talking about the cryptocurrency pump (the rapid growth of crypto). The difference in price will be the trader’s earnings.

If there are a huge number of altcoins on crypto exchanges. The above method can be used quite often. But there is a main difficulty - not every trader knows when the price will go up and when it will go down. It is run by the people themselves, not by state apparatuses.

However, it is still possible to increase the percentage of successful transactions. To do this, you just need to not deviate from these tips:

Trade exclusively on upgraded crypto exchanges . If a cryptocurrency exchange has been in business for less than a year, it's best not to open an account there, even if they offer the best trading conditions you've ever seen. The safety of your money should be paramount. You can find high-quality crypto exchanges by going to the Internet resource https://bitmakler.com/birzha.
Trade in small parts of your deposit . If you invest half or 100% of all funds in a transaction, then with a high probability the investor can lose the entire deposit on the very first day. Always look at the level of capitalization of the crypto market. If it grows, it means that with a high degree of probability cryptocurrencies will grow, and vice versa, if its figure decreases, then it will fall. The resource https://coinmarketcap.com/ displays the value of cryptocapitalization well.
Analyze the price chart in different ways . In addition to technical analysis, look at analytics from other traders, use indicators, etc. In general, do everything to predict the cryptocurrency price rate as much as possible.
Follow the news background . You can find them in Telegram channels, YouTube, and specialized sites. Information from them will help the trader take into account the risks when betting in one direction or another.
Don't worry, even when the asset goes against the forecast . To minimize the number of unprofitable orders, open only those orders that “look” towards the global trend.
Take some profit . Greedy traders, in the race for profit, set it at 100 points or more. Try to take no more than 20-30 p.
Do not think that by investing a lot you will be able to earn huge amounts of money . On a crypto exchange, it is important to correctly analyze a financial asset and make a timely decision after a particular situation.

If you strictly adhere to these 7 recommendations, even a novice trader will be able to avoid losing his deposit for a long time.

Two methods of earning money on blockchain without investment

Everyone wants to receive cryptocurrency in their crypto wallets without investing. Blockchain provides this opportunity. We are talking about bounties and faucets. You can’t make much money using these methods, although some comrades managed to earn more than 1 million rubles a month.

So, you can earn money through:

Faucets . There are quite a lot of different faucets on the network. Moreover, you can find it for almost any crypt. If you work alone without attracting referrals, you will be able to earn 1-2 US dollars in a month. If you attract people to work for them, the earnings will be significantly higher.
Bounty . This is a promotional event organized as part of the ICO. Anyone who is interested can take part in them. But keep in mind that you will need to advertise such projects in a positive way, namely write posts on forums, channels/communities on social networks, translate text into different languages, test software, etc. Fees here are paid in tokens, which are then sold on crypto exchanges.

Making money on the blockchain - what's the point?

The essence is approximately the same as a deposit in a bank. The point of making money on a blockchain wallet is to purchase a certain amount of altcoins. Then the coins are held in the personal account for some time. The timing and amount for each type of altcoin varies. Sometimes it's 100 coins, sometimes 10,000 and so on. During the time that a certain amount of cryptocurrency is in your wallet, you receive interest (since the wallet is involved in processing transactions). When will the profit be made? It all depends on the exchange rate and the amount of currency purchased for you. Sometimes you can get a good profit within a week, but in some cases you need to wait a month or more.

In other words, making money on a blockchain wallet involves investing in altcoins. But you should approach investing your money thoroughly. It is not recommended to invest all your savings in one cryptocurrency, especially if it is not in the TOP 10.

Is it reasonable to invest in Blockchain technology?

People are divided into those who believe in the future of cryptocurrency, but there are also those who consider this to be just another global scam. But it’s difficult to prove to a skeptic that once you’ve invested in a cryptocurrency, after a month or two, you can sell it on the stock exchange and receive funds in the amount of 100% or more per annum.

To reduce the number of skeptics, we suggest that you familiarize yourself with a number of the main advantages of blockchain technology:

Involved in various fields of activity . In parallel with the scalability of the use of blockchain, the rate of cryptocurrencies that take part in this is growing. And those who have tokens in their wallets will be able to earn money.
Implementation of the blockchain system in business . Every day, medium and large businesses are trying to implement blockchain technology in order to increase its efficiency and optimization.
Crypto capitalization shows growth every year . This indicates a growing interest in blockchain technology throughout the world.

There are risks everywhere. And cryptocurrency markets are no exception to the rule. Just look at the charts of some altcoins, which both grew and fell at lightning speed. In addition, a hacker attack can be carried out on a crypto exchange at any time. There are also risks with bounties, as well as ICOs. But this does not mean that you cannot make money there. As they say: “if they are afraid of the wolf, don’t go into the forest.”