The world of tech is always evolving and expanding to accommodate new innovations. In the last decade, one of the most impressive has undoubtedly been cryptocurrency. While the asset class was initially dismissed by some critics, it has, nevertheless, become a prominent fixture in the worlds of finance, sports, leisure, and many more.
Simply looking at the returns that major cryptocurrencies continue to bring in has made them very attractive to investors as a whole. But what about traditional tech founders? The good news is that there are several routes for techies to get involved in the crypto industry, some of which are as follows:
Direct token investment
The cryptocurrency industry has no shortage of tokens you can invest in. In fact, at any given point, there are tens of thousands of tokens floating about, and many of them have high growth potential. No matter if you favor meme coins or utility tokens, there’s a myriad of cryptocurrencies you can buy off exchanges, peer-to-peer platforms, and much more to invest in.
A look at the 13 next crypto coins to explode shows that nearly every type of network is included, whether it’s Proof-of-Stake or Proof-of-Work. Investing in cryptocurrency is similar to buying stock. Essentially, you buy your token at a certain price with the expectation that it will increase in value, and you can literally sell for a profit. Several factors affect how it will perform in the market, but with the research, you should find some good options.
Presales
While some prefer to buy tokens that are already in the market, others would rather become early investors. A presale refers to a private or public sale of a crypto token before it is formally listed on exchanges and open to the general public. Presale tokens are sold at a lower price than they will be listed on exchanges, and the funds raised from the sales are used to support the ecosystem. This is a major advantage of investing at the presale level, as buying the tokens cheaper from the beginning means that your profit margin will be even larger if it succeeds in the market.
For tech investors looking to get into crypto, presales are often a good option, as there is heavy emphasis on the use cases and why they will be valuable once they hit the market. Of course, you’ll still need to do your research to avoid falling for scam presales or simply underperforming ones.
Project creation
While you might be interested in investing in other people’s tokens, it might also benefit you to create your own. As we’ve said, there are tens of thousands of tokens in the market, and all of these were created by entrepreneurs who believed in a specific vision. If this sounds like you, you could always put out your own crypto token into the market. Some level of work will be involved in this, including designing the tokenomics, developing the blockchain itself, if needed, issuing the token, marketing it, and much more.
While there are numerous tools that make this process easier, such as platforms that automatically mint tokens, you also need to identify a practical use case and push for it to succeed in the market. If you are able to do this, however, it can be very financially rewarding. Some of the wealthiest individuals in the crypto industry are those who have successfully launched cryptocurrencies, and this is worth considering.
Staking
Staking offers a more hands-off approach to earning money from cryptocurrency, as it involves minimal risk and effort. This applies only to tokens like Ethereum and Solana, which are based on a Proof-of-Stake consensus, and refers to the process of locking away your tokens within the network for a specified period. The tokens will then be used to validate transactions across the network, and in return, you receive a percentage of interest.
Typically, staking will give you between 1% and 3% interest, and while it is not the dramatic profits you might get with speculative trading, there’s virtually zero risk for doing this. For those new to cryptocurrency or those more risk-averse, staking offers an option.
Crypto mining
Crypto mining is similar in a way to staking. That is the process through which new tokens are brought into existence. This applies to Proof-of-Work tokens like Bitcoin and refers to the use of specialised computer equipment to conduct complex mathematical puzzles. This is how transactions across a blockchain are confirmed, and it is essential in keeping the ecosystem alive.
Mining cryptocurrency is a very energy-intensive process, and depending on the token you are mining, it can be quite expensive. But if you are able to pull it off while still staying on budget, you can end up with a healthy stash of tokens that can net you a profit.
Lending
The demand for cryptocurrency means that more people are looking to borrow tokens for various purposes, and this can act as a semi-passive source of income. If you already have any cryptocurrency lying about, you can list it on various lending platforms for others to borrow. In exchange for borrowing the tokens, the users will have to pay a percentage in collateral, and smart contracts enforce all this. This means that if they default, the collateral will be automatically collected, and this reduces the risk associated. Several lending platforms have emerged to meet this need, and tech enthusiasts looking to get into crypto should consider them.
Related services creation
Directly engaging with cryptocurrency is not the only way you can make money from it. The boom of the crypto industry means that there’s more demand for adjacent services, such as mining, crypto exchanges, tax accounting, storage, and much more. As a tech investor, you might choose to invest in one of these services, and rather than investing in crypto yourself, you can serve existing crypto investors. This could involve building an exchange or investing in one, establishing a firm for crypto-related custody solutions, and more.
Conclusion
The crypto industry is chock-full of opportunities for techies, looking to expand their portfolios. Whether you want to buy into existing crypto projects, create your own, start up adjacent businesses, and much more, there’s space for you in the industry. Consider all of these options and decide which one best suits your investment style; from there, you can take it from there.
The authors and publishers of this article are not responsible for any financial losses you may incur as a result of using or acting upon the information contained herein.
For more information on the risks of cryptocurrency investments, please visit the FCA’s official guidance.
