Where to start in crypto?
Let's go through the following points:
• How to study?
• Main activities in crypto
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Imagine that you have just discovered the cryptocurrency world. From the people around you, you have heard such things as trading, mining, Doge, shields.
For earnings in the crypt, everyone knows only mining and buy and sell. However, there are many ways to earn money in crypto. In this article we will try to talk about them.
How to study?
Before proceeding to the description, I would like to advise you to develop general knowledge about the subject. Only in this way will you be able to fully understand what you choose for yourself as the main path of development.
You have to read, think and compare a lot. Work with a large amount of information. There is no need to be afraid of this, in any profession you start by absorbing all the material that comes to hand. This will fill your head with bricks, from which full-fledged knowledge will then be built.
Since crypto is a highly volatile and dynamic environment, it is impossible to prepare any static learning material here. It gets old very quickly. You need to learn from articles, communication in thematic communities, as well as courses that (required) are constantly updated. You need to study constantly!
The environment is very interconnected and there are no clear boundaries in the types of activities. That is why you must be savvy in everything.
General knowledge can be obtained from the Binance Academy Blog. There are collected articles of varying complexity on all major activities. There is a convenient rubricator that will select articles according to your level of knowledge.
Main activities
4) Maintenance of blockchains.
Trading
Any speculation in an asset, regardless of time. It can be both short-term and medium-term, long-term transaction.
We can distinguish spot, futures and margin trading, let's take a closer look.
Spot trading - trading in a real asset. Want to buy 1 BTC at 30,000 to sell it at 50,000. There is a person who wants to sell 1 BTC for 30 thousand. A deal is being made. You get your 1 BTC, the person gets 30k. The price rises to 50 thousand, you sell to someone who wants to buy at 50 thousand. Basically, it's an exchange.
Futures trading - (not for beginners, there is a huge risk of losing your deposit!!! Our video lesson on risk management) - contracts trading. There is no physical purchase of the asset. This is an agreement to buy / sell under certain conditions. Opens up the opportunity to work in long/short and unload your deposit using leverage. The transaction is secured by your deposit.
Long (long) - trade for an increase.
Short (short) - trade for a fall.
Margin trading - (not for beginners, there is a huge risk of losing your deposit!!! Our video tutorial on risk management) is a hybrid between spot and futures trading. You can borrow from the exchange. Your assets are the collateral.
The foundations on which trading is built: price movement analysis, trading strategy, risk management and psychology.
There are a large number of concepts created to curb price movement, to find the best way to understand where the price will go.
1. Classic technical analysis. Application of a bunch of graphic and technical tools. Various lines, chart patterns and indicators are used to try to predict price movement using price history.
2.Wave analysis. Application of visual models based on mathematics and psychology, describing the price movement as waves.
3.Fundamental analysis. Application of data on the idea and financial condition of projects, news background, market trends, team, and so on.
4.Smart Money + Price Action. This concept works with cause and effect. The concepts described above only work with the consequence.
The presence of a cause in the equation allows you to make the work more accurate. You can learn more about the concept itself here.
Before starting to study any concept, you need to understand what a limit and market order, stop order, order book, candlestick formations, timeframes, trading journal are. Register on TradingView and while studying the concept, try to sketch trading ideas on the chart. This will allow you to prepare for practical work, as well as hone your theoretical base.
Trading strategy, risk management, psychology
If you can learn to analyze quickly enough, then the remaining points develop only with experience. All of them are connected with the emotions of a person, with his gut. Unfortunately, after reading some material, you will not change yourself. You can change yourself only through inner work. This is a dialogue with yourself, asking questions and finding answers to them.
Investment
In essence, investing in crypto is a classic investment from the real world. You act as an investor who wants to invest in a project that is promising in your opinion and make a profit due to further price increases when the project enters the market. On the other hand, there is a project that needs funds for development.
With the help of the cryptocurrency market, the interaction between the two parties is greatly simplified. The procedures for successful investment are greatly simplified, the preparation for the investment round is simplified for the project, and costs are reduced.
Investing in cryptocurrency - ICO (Initial Coin Offering) - the initial offer of coins.
The easiest way to participate in ICO is through centralized ICO platforms. This is something like an ecosystem that has its own permanent audience and reputation, which constantly allows you to collect the necessary funds for the project.
Example: Coinlist.
A more difficult option, both technically and in terms of project analysis, is participation in IDO. This is the same ICO, only held on decentralized sites (applications (Dapps) hosted on the blockchain).
Before participating in any ICO / IDO, an initial analysis of the project must be carried out. This must be done to reduce the likelihood of losing your funds.
Analysis of the idea, project economics, team, community, news background, trends and much more.
This type of activity is associated with crypto-activities, which we will discuss in the next section.
Crypto activities
This activity is aimed at making a profit thanks to the possibilities of the cryptocurrency market.
The advantage of this type of activity is that it does not require large investments and does not react to market cycles in such a way. Projects are always being developed. Of the simplest working tools, you will need Metamask, Twitter and Discord.
1. Ambassador programs. We help develop the project community. We carry out moderation, content work, translation and writing instructions for the technical and organizational part, and much more. For this help, the project rewards us with its assets, or access to the sale.
2. Airdrops. We carry out activities at the project sites. It can be likes, registrations, reposts and much more. Thus, the project increases its coverage. Projects are rewarded with tokens or stablecoins.
3. Retrodrops. We carry out transfers within the network of some application. Thanks to this, it increases the volume of transactions and becomes more attractive to the market. A project can award a drop to its native token.
4. Testnets. We test decentralized applications (Dapps) so that developers can test and improve their product. A project can reward a drop of its native token, NFT, with access to the sale after the project is launched on the main network.
5. NFT. You can participate in the mint (something like a sale. The opening of the NFT, it is held for new collections at your expense. It is held on the collection website on the day of the mint).
Carry out NFT speculation, or invest in them in order to make a profit on resale.
6. DeFi (Decentralized Finance). decentralized finance. An analogue of the banking system, only decentralized thanks to the blockchain. With proper placement of your funds using DeFi tools, you can make good money.
7. P2E (Play-to-Earn). You play games, create in-game activity and the project rewards you for it. Currently, there are a large number of branches of this model. For example, M2E (Move-to-Earn), L2E (Learn-to-Earn) and others.
We tried to highlight the segments to make it easier to understand, but in fact they are closely intertwined.
Even more earnings can be obtained by increasing your chances by technical means.
Blockchain Maintenance
Blockchain is a decentralized network. Decentralized, it means that it is located on different computers connected to each other using software.
We can start one of these computers and help the network work. This assistance consists in verifying transactions that are carried out on the blockchain network. There are two main verification algorithms: PoW (Proof-of-Work) and PoS (Proof-of-Stake).
PoW is a classic mining that everyone has already heard about (the Bitcoin and Ethereum networks work on this algorithm).
PoS - forging, works on a different principle.
You can read about how the blockchain works and what the PoW and PoS consensus algorithms are in our article.
There are several ways to earn money here. You can help a project that is just starting up. They check their code for errors and the operation of the blockchain itself under load. To do this, a test network is launched, the nodes (nodes) of which you can become. The project rewards for this with tokens, access to the sale, etc.
You can also help the work of the main network. Become a miner (PoW networks) or a validator (PoS networks). For checking blocks, the blockchain will automatically credit you with funds in the form of a native token.