It’s easy to write off cryptocurrency investing as a rich person’s hobby or an activity with a ridiculously high barrier to entry. However, the mechanics to invest in crypto are…
It’s easy to write off cryptocurrency investing as a rich person’s hobby or an activity with a ridiculously high barrier to entry. However, the mechanics to invest in crypto are complex and challenging for newcomers to understand. Moreover, with thousands of cryptocurrencies being actively traded on the market, there’s a significant learning curve to overcome. On top of that, many people trade cryptocurrency with high frequencies as a form of day trading, and they have millions of dollars of capital to play with to accomplish it. So how much money do you truly need to invest in crypto, and what’s the best way to get there? Building a Crypto Mining Rig
There are many different ways to get involved in crypto investing. For example, you could get into crypto mining . Bitcoin and other similar cryptocurrencies require an extended network of active participants to function correctly; these participants maintain and develop the blockchain ledger on which the entire cryptocurrency is based. Participants must volunteer significant computing power to make this work, and they’re rewarded with small amounts of cryptocurrency as compensation for their efforts.
Getting involved in crypto mining means you’ll be able to generate coins on your own with no need to purchase them from someone else. To do this, you’re going to need a powerful rig, and even then, there’s no guarantee or going to make money from this endeavor. Most cryptocurrency mining computers rely on very powerful GPUs, costing hundreds to thousands of dollars.
You’ll also need to spend money on the electricity that powers your computer. Depending on which coin you want to buy and the competition you have, as well as several other variables, you could end up spending more money to operate your rig than you make with the actual mining. If you pursue this route, you’ll likely need to invest a minimum of thousands of dollars to get an entry-level rig. Purchasing Currency
Crypto mining isn’t the only way to get involved in cryptocurrency investing. Most people buy and sell coins through a marketplace. With the right market, you’ll have dozens or even hundreds of cryptocurrencies to choose from, and you can buy in tiny increments , sometimes securing a transaction for less than $100.
Most cryptocurrency brokers do charge a bit of money for this service, so you’ll end up paying a little bit more than the total purchase price of your transaction, but this is a negligible cost.
Suppose you’re interested in trading coins frequently and taking advantage of the small spikes and valleys that occur throughout the day. In that case, you’ll need a significant amount of capital, and you’ll need to be prepared to make substantial transactions.
Some influencers in this space trade millions of dollars worth of cryptocurrency at a time to this end. But, this isn’t truly necessary if all you’re interested in is investing in cryptocurrency. You can probably get started with less than $100. Is It That Simple?
Can you start investing in cryptocurrency with what amounts to some spare change left over from your paycheck? The short answer is yes, at least technically, but there are some problems and complications that you’ll need to consider. The Rig Problem
If you have a sufficiently powerful computer , you can set up a rig to mine cryptocurrency on your behalf; instead of investing in crypto, you can generate the resources yourself. There are just a few problems with this idea. GPUs and other necessary computer components tend to be very expensive for starters, compromising your potential profitability. Crypto mining is also highly competitive and energy-intensive. This means you may end up spending more on electricity than you make generating cryptocurrency. Unless you know what you’re doing, you’re probably better off buying and selling crypto on the market. The Free Capital Problem
To start, you’ll need to think about the free capital problem. You can purchase $20 of Bitcoin right now, but if you don’t have $20 to spare, that’s not going to do you much good.
Small scale transactions like the one above shouldn’t be a problem for anybody. But, if you’re living paycheck to paycheck or if money is inordinately tight, you might struggle to save up enough to build momentum.
There are several ways to handle this. For example, you could pick up a second job or a side gig to […]
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