It’s a fairly new technology that needs time & patience to mature. Like many new-ish technologies, we won’t know all of the applications, implications or exactly how it’s going to impact both fiat currencies (government-issued money, not backed by gold) & the wider global economy. If you’re new to Crypto, click here!

As the market is extremely volatile & at the time of writing, the UK economy is suffering from a cost of living crisis, insane energy bill hikes, & around 10.9% inflation, it’s not the best time to make any predictions on when & how crypto will rebound. Instead, let’s talk about how the easiest and quickest ways you can invest.

There are three ways to get started that don’t involve intimate market knowledge; staking, mining, & liquidity farming. Put simply, staking is like paying into a savings account. When you stake you allow the platform to trade with your money, & they reward you with interest. You can use a flexible agreement, but these aren’t as profitable. With locked staking, you stake your tokens at a fixed rate for a specific amount of time. When the market is stable, this is a great way to make a little extra coin, as the annual percentage yields (APY) can be as high as 20-30%. I know right – crazy! You can stake crypto on platforms like Binance & Coinbase.

Mining is another way to invest. Usually done by large networks of computers solving lots of complicated math problems in exchange for crypto tokens, mining is accessible to everyone! You can join a mining network & lend your computer or phone power. I’ve been mining a currency called Pi since 2020. Since then, they’ve built an ecosystem that started with a Test Net, (the prototype blockchain) & resulted in the Main Net (the main blockchain) which hosts the digital ledger of transfers and transactions. They also built a Pi Browser & a bespoke digital wallet to support, hold, stake & transfer the currency. Pi still has a way to go before it’s worth transferring it out & converting it to £s, but it’s been very interesting to see how this project has grown & how the platform has developed. I’ll keep you updated!

Now onto liquidity farming. Much like staking, when you lend your token to the platform’s liquidity pool, you can be rewarded in interest. Liquidity farming can be a great way to earn a little extra cash without having to do any trading. But you’ll need to do some research on the performance of each token in the market & bare in mind that you aren’t safe from the volatility! When you lend your tokens to a platform or exchange, it’s used for withdrawals, investments & trading by other investors.

One thing to watch out for is the projects that don’t seem to offer any value beyond the token, & I can’t stress this enough! Like the NFT rug pulls, some of the Alternative coins you will hear about are indeed cleverly disguised Ponzi schemes – meaning the only investors to make money are the first to invest & sell. Essentially, the late investors pay the original investors, who often look to sell & get out at the first profitable opportunity. Why am I telling you about rug pulls? Well, I’m pretty sure it’s happened to me! I heard about a decentralised reserve currency protocol called Time Wonderland, & its’ alt-coin TIME. I put in a little bit of cash hoping to stake it & receive the rewards… The platform promised to transform the TIME into a new token called wMEMO which promised to be worth more.

But I noticed that after a while the value of tokens started to sharply decrease. Being bullish & enthusiastic about locked staking, I decided to leave it in there. I had a look recently, & it’s all gone… either that or it’s been moved, but I’d have to do some blockchain investing to find that out – & for now, that’s beyond me. I later heard whispers in the crypto community about Time Wonderland being a rug-pull?! We’ll come back to this later.

So a word of advice, especially in the crypto space, if something sounds too good to be true – it definitely is! This technology is still largely unregulated so if you lose your money, you won’t get it back!

This blog is the second in a series of themed Cryptocurrency posts, stay tuned to hear more about NFTs, missing tokens, CBDCs (Central Bank Digital Currencies), Play2Earn games & more.