How to earn interest on Crypto?

So, your interest in Cryptocurrency has turned into an interest in how to make interest on Crypto! Interesting!

Some of the Cryptocurrency-acquisition methods here don’t strictly fall under “interest”, but I’m sure you won’t mind that!

Since you’re an owner or owner-to-be of Cryptocurrency, we’ll assume you know what they are and skip straight to the good bit: using your tokens to make more tokens. If not, you can read up on what is cryptocurrency here.

Let’s take a look at some different ways you can earn more from Crypto.

Mining

Snow White isn’t the only one who can benefit from mining. But what is Crypto mining? And is it a good idea?

Mining is how some Cryptocurrencies (but not all) mint new coins onto their blockchain. It’s called mining because while you’re solving a complex mathematical problem in one, and hitting a rock with an axe in the other, in both cases you’re picking a spot, digging, and seeing if you can find a treasure.

The process of mining for a Cryptocurrency is connected to the process of validating transactions: one is a reward for the other. Central banks pay for very expensive servers and software to keep their systems running.

Crypto, such as Bitcoin, needs lots of computing power around the world to keep validating transactions: transaction fees and Bitcoin mining are the rewards that people get for lending their computing power and electricity to the Bitcoin ecosystem. In fact, there are a huge number of people competing to be the first to solve puzzles and claim the Bitcoin. That’s how you design a system that functions by using computers worldwide but doesn’t trust them.

But how do you make money out of it? Well, it’s become much too difficult for one person with one machine to find a Bitcoin. It’s newsworthy when it happens. And it’s expensive now to buy the equipment to run the calculations (which must be replaced after a while because the difficulty of finding a Bitcoin goes up).

The answer is to sign up for a cloud mining company such as Shamining that allows you to rent computing power from them and use it to mine. They might join pools of other miners for you, all looking for Bitcoins together, and sharing any they find. The more computing power (“hash power”) you have, the greater your share. Some cloud mining companies offer as much as 40% “profit”. Beware though: it’s completely unregulated and doesn’t pretend to be: they take your money, and provide some power. If they close tomorrow, well, c’est la vie.

However, unlike some of the other options, you never get back your initial investment so you’re vulnerable if the company closes or just quits. You also just have to hope that they discover enough Bitcoin for you that you can make a profit selling it: and you don’t know the future price of Bitcoin, nor how difficult it is to mine. Financial “income calculators” on the mining sites are often inaccurate over time, wildly overstating profitability.

Minimum investments tend to be in the $500-$1000 area, and withdrawals tend to be restricted until you earn a certain amount of Bitcoin, to avoid transmission fees eating the whole amount.

While any Cryptocurrency that uses “proof of work” to operate is mineable, there are far fewer than can be done from a cloud environment.

Of course, there’s nothing stopping you (for any coin) from setting up a device and downloading mining software. Just don’t expect miracles – there are no coins easy to mine that are worth anything.

But do expect overheating equipment since the miner has to be running 24/7.

Staking

There are really two kinds of staking. Blockchain staking is when you take your own coins out of circulation and the coin itself rewards you for it with extra tokens or other privileges. Why is this good for the coin? It reduces supply (and increases demand) and stops you from selling them!

Interest staking is when you lodge your coins with a financial provider and they use them to make money and give you an agreed payout. That is equivalent to interest, but it’s called “yield” in Crypto-land, so you get an APY (Annual Percentage Yield).

This approach is more flexible than blockchain staking because you can have a portfolio of different Cryptos that you’re earning on, to balance risk. Crypto tokens are legendarily volatile, and while values tend to increase in the long-term, the short- and medium-term movements can be alarming if you’re not used to them. Though don’t forget that it’s not a loss or a gain until you sell!

If you want to mitigate the risk of your coins changing in value against the dollar, you can also earn a yield on stablecoins in this scenario. Stablecoins are Crypto tokens that are pegged to the value of a real-world asset, such as US Dollars. Earning interest on stablecoins is impossible by blockchain staking, but at ARQU, you can earn up to 7% APY on them (and 0% for Crypto). This is substantially more than traditional finance offers.

Airdrops

Just occasionally, a coin will give airdrops to its token-holders. An airdrop is when they simply give you free tokens. This sometimes happens when a token is launched, and can also be triggered by other technical or promotional activities. In general, these aren’t worth much and it’s difficult to track them down. Some of the airdrops occur on obscure tokens that newcomers should be wary of. But, it’s a thing that happens.

Lending

When they say decentralised finance allows you to become your own bank, they really weren’t kidding. For instance, you can lend your Crypto to someone else in a P2P system (“Person to Person”) and charge how much interest you want, competing with other lenders.

But is it good to be your own bank? One of the reasons banks (and providers such as AQRU) exist is to help protect consumers from that complexity and risk. P2P lending is undoubtedly profitable for some, but it’s fraught with risk.

Earn Interest with AQRU

Remember we mentioned interest lending? We covered the risks involved with the various forms of interest gathering, and if you invest with the right company, it’s the safest approach to making the most of your Crypto.

If you want to test that out for free and also earn a complimentary $10 of USDC stablecoin invested for you immediately, you can download the AQRU app, or sign up via our website.

Once the free stablecoins are invested, you’ll be able to see the total asset value going up, per second (and interest is calculated per day).

If you like what you see, then you can go through the verification process and make a deposit. We carry out KYC (“Know Your Customer”) and AML (“Anti-money laundering”) checks, which generally requires a photo ID, and a utility bill. Distrust any company that doesn’t ask you for this!

The minimum deposit is 100 Euros, but you can deposit as much as you like. There are no deposit fees.

If you want to invest in Crypto such as Bitcoin and Ethereum, then you can buy Crypto within the AQRU app using our supported payment provider MoonPay (transactions fees will apply, but the money gets transferred easily and directly into your AQRU wallet. You can send in Crypto from your own wallet or an exchange too).

The only fee is a withdrawal of $20 if you withdraw to Crypto, but withdrawal to regular “fiat” currency is free.

So what are you waiting for, don’t miss out! Sign up for free today and start earning interest on your Crypto.