Just got hooked into Crypto currency trading/mining (ok, I’ve been mining for a while). So far the learning curve is pretty steep – but managable.

My experience so far is fun, fresh and new (like most new gadgets). And working out how to game the system or gain in a predictable manner is the fun part.

I will continue to put out reviews and where to trade as time goes as well.

Base targets

Starting with the point of it (making money of course!). Why Crypto? And what else to compare it to (like gambling)?

• Much less chance of a total wipe (like shares), than gambling
• Taxed by Government (down here). It is treated like shares.. though the actual details still require more clarifications.
• Gambling is ‘tax free’, though I use Lay-betting which does seem to earn some money. Chance of full month busts, or wins of over $1k in a streak.
• Putting into mortgage (~2%). This is the base benchmark figure. If I’m not earning > 2%, it’s better off being put towards the mortgage. Seriously, any investment that doesn’t earn 2% isn’t really worth it.

So now that I got a benchmark. Then how much to invest, and what strategies? What wallets? Where exchanges? All the buzzwords start to kick in.

Strategies

This part is still being worked on, but I have basically 3 piles (maybe 4/5 soon) for Crypto-winning:

1. Crypto Mining

This is the most basic form of income. “Something for (almost) nothing”. What you trade is electricity/power for some form of reward. The economics is easy:

Strategy: $COIN > $electricity+$hardwarecost = Profit

Hardware costs can be minimized by reusing/part time mining (as opposed to full time mining). Similarly electricity cost can be minimized by only running during free-energy times (or in my case, Solar Power being generated). The only complication on $electricity for me is, if I sold it to the grid I’d get 11c/kWh. I must make more than 11c in crypto to make it worth it. This shouldn’t be hard.

So far, this is a viable equation for me.

2. Crypto Trading (Long)

Strategy: Buy low, Sell high

Long (term) trades are seen as investment, like shares for a while for a return. Most established coins won’t jump up/down that much or are on a steady but slow ascend. Like $BTC (Bitcoin) is rising over time, but rarely would you see a 20% spike in a day or two. As long as it rises above 2%/3%, this is a good ‘investment’. Barring crashes, this is the safe trade.

3. Crypto Trading (Short)

Strategy:
– Buy low, Sell high
– Micro wins/transactions (Bot-able)
– Trading between unusual pairs to gain more $COINS not just relying on the price of the $COIN

Short term trading is where you can take some risks. A lot of random “Alt Coins” (non-mainstream) have a boom/bust type relationship, and can result in really explosive, 400% returns at times, in a matter of a month or two. Of course this is the gamble part of Crypto trading. Also, Alt Coins trading can open up a lot of market pairs of strange bedfellows, trading from BTC -> COIN -> ETH -> BTC back for more money possibly.

4. Staking

Staking is where you offer up your crypto as collateral for an ‘interest/bond’-type scenario. They can be broken up into 2 types : the “Proof of Stake” miners/coins (crypto 2.0?), and actual “coin-staking”.

Proof Of Stake miners/coins are a relatively new thing, where one doesn’t “mine” for coins, but get coins for participation (usually) in a vote, or in just running the coin’s “daemon”. Examples of that include $PIVX (Pivx), $REDD (Reddcoin), $QTUM (Quantum). A full set of coins can often be seen at “stakebox.com”, or just Google.

Requirements:

• The “gotcha” is, you need at least some coins to start with (trade into it). Most won’t tell you that you can’t start from 0 $COIN
• The bigger you put in, the more likely you earn.

Coin Staking is where you have to actively say “I’m investing X $COIN” in staking. It just magicallty bakes itself. An example of that are things like $COMP (Compound), $XTZ (Tezos), $ADA (Cardano), etc. These are often run through an exchange which do the staking for you.

Requirements:

• At mercy of Exchanges.
• Beware of “admin fee” of staking (eg. Exodus)
• Buy/Trade into the $COIN before staking (some have minimum stake amounts)

5. Futures Market (coming soon)

Futures Market is where you’re punting against a projection of what’s happening. This can be akin to Lay betting (betting on coins to fall, not just rise). Imagine you ‘borrowed’ 1 $BTC (let’s say AU$70000). You sold it today.. then the price dropped to AU$60000. You then rebuy that 1BTC and return the 1 $BTC you borrowed.. you just made AU$10000! Obviously the opposite is true, if the price went up, you’d have to buy more AU$ to repay that 1 BTC. Given the right terms, I think this can be a good source of wins if the market is floating very high. This is an area I haven’t gotten into (yet)

Conclusion (so far)

Don’t go into Crypto-trading, until you are ready to lose some spare cash, and have a lot of headaches, and look into bots (for faster trading, since it’s 24/7 most of the time).

However the rewards can be fun, and it certainly could be a hobby worth pursuing, but I won’t quit a dayjob for it. It can be exciting to see your $100 turn into $1000, which sure beats going out and playing Tennis or Fishing that doesn’t earn money in your down times.

Own Current position:

Self Mined: ~$109 (RVN, ETH, XMR)
Invested : $1000 ($921.93 at the moment)
Staking: Testing with QTUM (1 QTUM), PIVX, and RDD – using mined $COIN to transfer to staking coin.

Exchanges: CoinSpot (AU), Binance

Wallet: Exodus, Binance, CoinSpot, Personal (off exchanges)