How to Make Money After Buying Crypto
Cryptocurrencies have taken the world by storm, and more people are investing in digital assets than ever before. However, after buying crypto, many investors are unsure of how to maximise their profits and keep their assets secure. We will learn why popular crypto exchanges like Binance and Kraken may not be the safe or lucrative places to earn interest on your crypto. We'll explore the unique offering of Tezos liquid staking and learn how to use a spare phone as a hardware wallet using the AirGap Vault app.
Why Crypto Exchanges Like Binance and Kraken Are Not the Safest Places to Earn Interest on Your Crypto
While crypto exchanges like Binance and Kraken are popular choices for trading and investing in cryptocurrencies, they may not be the best places to earn interest on your digital assets. Here are a few reasons why:
- Centralisation: These exchanges are centralised platforms, meaning that they are susceptible to hacks, security breaches, and other issues that can put your funds at risk. By keeping your crypto on an exchange, you are essentially trusting a third party to manage your assets securely. This can be risky, as numerous high-profile hacks have demonstrated.
- Custodial Risks: When you store your crypto on an exchange, you don't actually own the private keys to your assets. Instead, the exchange holds the keys on your behalf. This means that if the exchange were to go offline or suffer a security breach you could potentially lose access to your funds.
- Limited Earning Opportunities: While some exchanges offer interest-bearing accounts, the rates can be relatively low compared to native staking. Furthermore, the interest earned on these accounts may be subject to additional fees or restrictions imposed by the exchange.
Tezos Liquid Staking: A Unique Offering
Tezos is a blockchain platform that features a unique liquid staking system, which allows users to earn rewards on their holdings without compromising on liquidity or security. Here's how it works:
- Delegation: Instead of locking up your assets in a staking contract, Tezos allows you to delegate your tokens to a validator, or a "baker," who will stake them on your behalf. By doing this, you retain full control of your assets and can move or trade them at any time.
- Rewards: The validator (baker) will earn rewards for participating in the network's consensus process, and a portion of these rewards will be shared with you as the delegator. This is a passive income stream that allows you to earn interest on your Tezos holdings while still maintaining liquidity.
- Security: Since you are not entrusting your assets to a centralised exchange or platform, the risks associated with custodial services are completely reduced. The delegation process happens once you’ve chosen a baker (like Money Every 3 Days). You maintain control over your private keys and funds at all times.
Using a Spare Phone as a Hardware Wallet with AirGap Vault
A hardware wallet is a secure way to store your cryptocurrencies offline, protecting them from potential hacks and security breaches. While dedicated hardware wallets like Trezor or Ledger are popular choices, you can also turn a spare phone into a hardware wallet using the AirGap Vault app. Here's how:
- Install AirGap Vault: Download and install the AirGap Vault app on your spare phone. This app will act as your offline hardware wallet, securely storing your private keys away from internet access.
- Create a Wallet: Launch the AirGap Vault app and follow the prompts to create a new wallet. Be sure to write down your recovery phrase and store it safely, as this will be your only way to restore your wallet if the device is lost or damaged.
- Install AirGap Wallet: On your primary phone, download and install the AirGap Wallet app. This app will act as the interface for managing your crypto assets and interacting with blockchain networks.
- Pair the Devices: Open the AirGap Wallet app on your primary phone and follow the prompts to pair it with your AirGap Vault app on the spare phone. This will establish a secure, offline channel for signing transactions without exposing your private keys to the internet.
- Transfer and Manage Crypto: You can now transfer your cryptocurrencies to your AirGap Vault wallet addresses and manage your crypto assets using the AirGap Wallet app on your primary phone. When you need to sign a transaction, the AirGap Wallet app will generate a QR code that can be scanned by the AirGap Vault app on your spare phone, keeping your private keys safely offline.
By following these steps, you can transform a spare phone into a secure hardware wallet, protecting your crypto assets and giving you greater control over your investments.
In conclusion, while popular crypto exchanges like Binance and Kraken may seem like convenient options for trading and earning interest, they come with inherent risks and limitations. Exploring alternatives like Tezos liquid staking and using a spare phone as a hardware wallet can help you maximize your profits and keep your assets secure. By taking the time to research and implement these strategies, you can make the most of your cryptocurrency investments and protect your hard-earned assets.
Previous post: Hardware wallets vs Software wallets