The Ultimate Guide to Earning in Crypto [updated 2024]

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By Tokenize Xchange
March 07, 2024

1. Key takeaways

Here are some of the ways you can earn money in the cryptocurrency world in 2024

Mining: Solving cryptographic hashes for the right to validate transactions on the blockchain is called mining, which generates cryptocurrencies. Earning is based on mining speed and cryptocurrency value.

Staking: Staking assets in blockchains to show commitment gives the right to validate transactions on the blockchain, which generates cryptocurrencies. Earning is based on staked amounts, annual percentage rates (APR), and cryptocurrency value.

Lending: Lending cryptocurrencies to financial institutions yields interest, with earnings varying by interest rates and cryptocurrency value.

Liquidity Farming: Providing liquidity to Decentralized Applications (DApps) earns a percentage of trading fees, influenced by trading volume.

Earning: Airdrops, giveaways, and faucets offer avenues for earning cryptocurrencies.

Investing: Holding and/or trading cryptocurrencies are ways to potentially earn returns.

Content Creating: Monetize your expertise through tutorials, ads, donations, and affiliate programs.

2. Mining

a. What is mining?

Mining is one of the way to earn money in crypto space

The blockchain consists of linked blocks, each is a ledger of transactions verified and recorded by the whole community. The first person to verify new transactions and add a new block to the chain is rewarded with a transaction fee and newly generated cryptocurrencies.

But how to be that first person? In Proof of Work (PoW) tokens like Bitcoin, you solve cryptographic hashes. The first one to complete this task gets to be the transaction validator and earn the reward. This is called mining, and the validator is called a miner. The system’s integrity is ensured because no malicious actor can out-mine the whole system.

So, how much can you earn as a cryptocurrency miner? This depends on how fast you can mine, which cryptocurrencies you are mining, and their price. Currently, top-end personal computers have hashrate (the rate of solving cryptocurrency hashes) of about 10 gigahashes per second (GH/s). In comparison, the lower-end of specialized mining computers, aka ASIC miners, has 5000 GH/s or or 5TH/s hashrate.

Assuming your mining rig has 5TH/s hashrate, let’s look at some of the most well-known PoW tokens:

Cryptocurrencies Approx. raw monthly yield Approx. USD
BTC 0.000243 $16.04
BCH 0.040316 $16.20
LTC 587.462100 $49,416.40
KAS 8,792.755573 $1,302.65
KDA 11.862535 $20.02

* Cryptocurrencies fluctuate and dramatically impact your earning potential

* With a very high supply, small-cap tokens may depreciate very fast

* The cost of hardware, electricity, and other costs are excluded

b. Pooled mining

As more and more people take part in mining cryptos, the share of solo miners is getting smaller. One of the biggest problems is that the income is irregularly earned, but the mining cost is fixed.

Imagine, in theory, your rig can mine 1 BTC a year. With a string of bad luck, you may not get any BTC for 3 years. Yet you still paying for electricity and other fixed costs. Enter pooled mining. By teaming up with 100 people with similar rigs, your team earns 100 BTC a year, so you earn 0.01 BTC twice a week. It’s the same potential payout, but easier to keep up with the costs.

Each mining pool has many different payment schemes, differing by which token is mined, which payment scheme is used, or whether the pool charges fees. Your potential payment is generally proportional to your hashrate and time working in the pool. Assuming you pool mining BTC:

Pool Payment Scheme Average fees
Foundry USA FPPS 0%
Antpool

FPPS

PPLNS

4%

0%

ViaBTC

FPPS

PPLNS

Solo

4%

2%

1%

F2Pool

FPPS

PPLNS

4%

2%

Binance Pool FPPS 4%

3. Staking

a. What is staking

Staking is one of the way to earn money in crypto space

The PoW consensus model, despite its many benefits, is slow, energy-intensive, and necessitates high transaction fees. Proof of Stake (PoS) consensus is invented to avoid those problems.

In PoS, people deposit their money in a blockchain to become its validators. Then, a validator is chosen randomly to verify transactions and append a new block to the chain. The validator is rewarded with transaction fees and newly generated cryptocurrencies for their service. The selection process is weighted toward the bigger and older stakes, as they are more invested in the blockchain. If any of the validators cheat, they would compromise their investment in the blockchain and their staked assets would be penalized. Thus, the blockchain’s integrity is ensured by aligning everyone’s economic interests with the blockchain.

Assuming you invest 1000 USD, your potential earnings of these popular PoS cryptocurrencies would be:

Cryptocurrencies  Approx. APR Approx. Monthly Earn
Ethereum (ETH) 2.47% – 6.17% $2.06 – $5.14
Binance coin (BNB) 1.78% – 2.16% $1.48 – $1.8
Solana (SOL) 6.22% – 7.31% $5.18 – $6.09
Cardano (ADA) 1.28% – 7.12% $1.07 – $5.93
Avalanche (AVAX) 5.78% – 8.2% $4.82 – $6.83

Like any other investment, staking also has many downsides. Firstly, staking requires a level of technical competency. Validating improperly may get you penalized and lose some or all of the staked crypto. Technical problems with the protocol may disrupt the blockchain operation, even the hacking and theft of cryptocurrencies. Furthermore, stakers may be lured into one of many fraudulent projects. Even if you stake in a legitimate project and receive regular payouts, you may still lose because of significant price drops.

b. Pooled staking

Most PoS cryptocurrencies often require a substantial minimum staking amount to participate. Are you locked out of the fun if you don’t have the funds? Pooled staking offers a solution by allowing multiple participants to pool their cryptocurrencies to meet the requirement.

Your potential earning in Pooled Staking relies on many factors. The Annual Percentage Rate (APR) is higher for less popular tokens. Many staking pools’ yields start low and only ramp up as your staking size and time in the pool increase. In contrast, the fees scale down as your stake and time in the pool increase.

Assuming you stake 1000 USD worth of ETH, the potential earning for some of the popular staking pools is

Pool Approx. APR Pool commission Approx. Monthly Earn
Lido 3.4% 10% $2.55
Stakewise 3.46% 10% $2.59
Coinbase 2.67% 25% $1.67
Binance 3.17% 35% $1.72
Ankr 3.5% 10% $2.63

4. Lending

a. Crypto saving account

Saving is one of the way to earn money in crypto space

The most familiar way to earn money. You lend cryptocurrencies to a crypto financial institution for a small return, who in turn lend to other parties for a higher return. That, or they may put the money in their liquidity pools to facilitate trading on their platform, in which case, the money comes from trading fees.

The lending interest differs by exchange and fluctuates in time. The APR is higher for the exchange’s native tokens or less popular tokens, and higher if payments are made in native tokens.

Assuming you lend out 1000 USD in BTC, paid in BTC, the monthly payment of several CEX is

CEX Approx. APR Approx. Monthly Earn
Binance 0.3% $0.25
Nexo 5% $4.17
Hodlnaut 4% $3.33
crypto.com 5% $4.17
youhodler 7% $5.83

Lending crypto carries inherent risks, despite being relatively lower risk compared to other crypto investments. These include counterparty risk when borrowers default on loans. Additionally, there is bank run risk, where borrowers face immediate withdrawal requests more than their liquid cash. So it’s important to research and choose reputable institutions for your lending.

b. Liquidity farming

Liquidity farm is one of the way to earn money in crypto space

Liquidity farming is lending cryptocurrencies to Dapps to facilitate trading. This increases liquidity for the Dapps, thus, increasing the speed and ease of trading for the participants. In return, the liquidity farmers earn a percentage of the trading fee.

Some of the most popular Dex for liquid farming:

  • Uniswap
  • SushiSwap
  • PancakeSwap
  • QuickSwap

On each liquidity pool, you need to deposit at least 1 pair of tokens and choose a fee tier, usually from 0.01% to 1% per trade. This fee is shared between the exchange and all liquidity providers. In general, more popular pairs, like BTC – ETH, have higher trade volume, higher liquidity, more competition between the liquidity providers, and therefore lower fees.

Your reward is calculated:

(Total trade volume x Trading fee x Liquidity provider shard)/ All liquidity providers at the same fee tier.

So, to optimize for reward, you need to choose trading pairs and fees that have the highest trade volume, yet also the lowest provider.

Other than many risks inherent to most crypto investments, liquidity farming has impermanent loss risk. Which is when the ratio of a pool and as an extension, your share changes, leading to loss compared to simply holding.

5. Yield farming

Yield farming, although often used interchangeably with liquidity farming, actually covers every action that can generate yield using crypto capital, be it staking, lending, or liquidity farming. To start yield farming, consider either mining or buying some cryptocurrencies with fiat money through a fiat-crypto gateway. As with any other investment, higher returns correlate with higher risk, so remember to farm with caution.

Here’s the difference between yield farming methods:

Staking Lending Liquidity farming
Deposit Blockchain’s deposit Centralized Crypto Institution wallet Decentralized Crypto Institution wallet
Yield mechanism Reward for contributing to a blockchain Lending interest Trading fee
Yield rate Up to 10% Up to 20% Depending on the trade volume, trading fee, and your share in the liquidity pool
Risk Technical problems (vulnerabilities, exploits, bugs, etc.)

Price Volatility

Slashing risk Borrowers defaulting

Bankrun

Impermanent loss

6. Earning

a. Crypto Airdrop or Crypto Giveaway

airdrop is one of the way to earn money in crypto space

Crypto Giveaways and Crypto Airdrops are interchangeable terms that refer to projects or companies sharing their native tokens with users. These are often done for promotional purposes: increase awareness, engage with the community, and incentivize participation for said platforms.
Every day, many opportunities arise, follow us and other content creators for chances of airdrops and giveaways!

b. Crypto faucet

A type of giveaway, but instead of one time, the cryptos are distributed slowly over time, when the users do simple tasks. It could be visiting a website/ app, watching ads, completing captchas, signing up, etc. Usually, the faucets give small amounts of lesser-valued cryptos. Furthermore, beware that many faucets are funnels to gambling sites!

i. Learn & Earn

Some exchanges, like Binance and Coinmarketcap, have a learn & earn program. By logging in, learning, and taking quizzes, you may earn a small amount of cryptos.

ii. Play-to-earn

Play-to-earn (P2E) games could also be considered a type of faucet. By playing games, you earn in-game items and collectibles, which also have value outside of the game ecosystem. The games use blockchain technology and NFTs to prove ownership, create scarcity, and facilitate trading. It is the combination of both having fun and making money, which explains why it’s one of the fastest-growing fields of cryptos.

7. Investing

a. Hodling

The tried-and-true investment method and cryptocurrency is no exception. Holding cryptocurrencies has the potential for long-term growth. Best of all, hodling means you can also yield farming, so you get to double-dip on the sweet sweet gainz.

However, crypto is inherently risky: the market is uncertain, under-regulated, and volatile.

b. Dividend-earning tokens

Some tokens build a dividend distribution mechanism into their smart contract. The token holders will get some of the profit every fixed interval, such as monthly or quarterly.

Holding these tokens may give you both potential value appreciation and recurrent cash flow.

Name Estimated Annual Dividend Approx. Monthly Earn
LooksRare (LOOKS) 9% $7.50
VeChain 2% $1.67
NEO 3% $2.50
PIVX 13% $10.83
KuCoin Shares 2% $1.67

c. Trading

Many traders believe that the market is inefficient and full of opportunities. Many build innovative bots and sophisticated algorithms to trade. Many have won big, but many were left to hold the bag. If you want to try, don’t forget to do proper risk management.

8. Content creating

If you are knowledgeable about cryptocurrencies and eager to share, you also can earn money as a content creator. It’s hard work and lots of luck to attract followers. Still, the keys are to consistently produce quality content, and engage with the audience. There are many strategies to monetize your content, your brand, and your following:

a. Selling tutorials and courses

online course is one of the way to earn money in crypto space

As a successful content creator, you are an established authority in crypto. Your experience and opinions could be highly valuable to your audience, so offer them your trading strategies, analysis models, in-depth reviews, and reports.

b. Ads

On a platform, you can utilize platform native advertising to show personalized ads. However, even on your blogs and website, there are ad networks like Google Adsense to do this for you.

c. Donations

Donation is a good source of income, especially on platforms such as Twitch and YouTube. You should provide additional perks to donors, like community badges, personalized shoutouts, or early access and exclusive content.

d. Paid Content and Affiliate Marketing

Many projects, exchanges, or companies may need your help to promote their offering to new users. It’s a win-win-win for everyone involved: companies get exposed to new users, your followers get sweet deals, and you get paid.

Tokenize referral program: https://tokenize.exchange/referral-program

Tokenize affiliate program: https://tokenize.exchange/affiliate-programme

Disclaimer

Cryptocurrencies are subjected to high market risk and volatility despite high growth potential. Users are strongly advised to do their research and invest at their own risk.