As a celebration of colors, Holi surrounds us with a sense of hope and happiness. The festival of a million colors is all about diversity, and what has been more colorful technologically than the blockchain and cryptocurrency sector? Nothing comes to mind.
It all began with a concept on an obscure internet forum in 2009 and has since grown into a vast ecosystem noted for its myriad hues, which symbolize the possibilities it opens up. The industry is constantly changing, and new ideas are introduced to us on a daily basis.
In this article, we take a look at the many colors that the blockchain and crypto industry has in store that everyone should explore, beyond just the Reds and the Greens.
Staking & Lending
Cryptocurrency transactions are validated through staking. Stakers hold coins but do not use them since they are “stakeholders.” As an alternative, users store the coins in a digital wallet.
Following that, your coins are used to validate transactions on a Proof of Stake network. For doing so, you get rewarded. The network is effectively borrowing money from you when you use this service. Network security and transaction verification may be maintained thanks to this. Like bank interest, you get a reward similar to what you’d get from a credit card.
Proof of Stake picks transaction validators depending on the number of coins you’ve agreed to stake. Consequently, it uses significantly less energy and doesn’t necessitate the purchase of expensive equipment like in the case of crypto mining.
There are a number of ways in which you can make money by lending your coins to other investors. Crypto lending is made possible by numerous platforms.
When it comes to making money with cryptocurrencies, the initial pioneers did it through mining. Miners remain an important part of Proof of Work’s methodology. It is here that the value of a cryptocurrency is generated.
New coins are given to you as a reward for participating in the cryptocurrency mining process. To mine effectively, technical skills and initial investment in specialized machinery are required, both of which are easily acquirable following a bit of research on the Internet.
Additionally, master node operations are part of mining. However, this necessitates a high level of skill and a substantial expenditure of time and money at the outset.
Airdrops and Forks
Free tokens and airdrops are used to raise awareness. The goal of an airdrop by an exchange is to increase the number of people using a certain project. As a participant in an airdrop, you may be eligible for a free coin that you may use to purchase goods and services or invest in or trade.
When a protocol is upgraded and new coins are created, a fork in the chain is created as a result of the modification. If you have crypto on the old chain, you’ll usually get free tokens on the new one. This implies you get a free coin for being in the right place at the right time.
What if I told you that you could invest in digital currency and receive a return on your investment? To sum it up, a variety of digital coins will pay you for effectively purchasing and holding your digital assets. You don’t have to stake these coins to receive a dividend, which makes them ideal for keeping in a wallet.
COSS, CEFF, NEO are just a few examples of coins that pay dividends. Not every coin is a good fit for your portfolio, just like normal equities. You’ll need to investigate and select what seems to align with your financial objectives.
NFT investing and staking
Investing in NFTs may not be for everyone, but it may be a fun way to make money in the cryptocurrency market. Collecting and buying NFTs can become addictive. After you acquire your first, it’s likely that you’ll want to buy more. You can either keep them, display them, gift them, or sell them for a premium on your investment.
In the crypto realm, you can also make money by staking NFTs. Locking assets in DeFi systems allows NFT holders to obtain incentives. All without having to part with any of their NFT knickknacks.
NFT staking, like DeFi yield farming, uses a Proof of Stake (PoS) technique in order to reward players for their efforts. The annual percentage yield (APY) and the number of NFTs staked are factors that go into the rewards users receive for locking up NFTs.
Unlike most other industries, the blockchain and crypto sector has been expanding at a tremendous pace, and we are looking at worldwide adoption. This expansion has resulted in the creation of this colorful ecosystem that is vibrant in terms of innovation and diverse in terms of opportunities, quite like the festival of colors our nation is celebrating. So why not make life a bit more colorful this Holi with Crypto?Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.