You don’t become a techno wiz to understand how blockchain works, although you will require a good patient dose.

First, let’s discuss what blockchain means. Picture a physical ledger used by accountants where financial transactions are itemized.

That’s pretty much how blockchain works; only it’s a digital spreadsheet with archived trades open for validation. And unlike physical ledgers that are only accessible to the accountant in charge and the financial client, blockchain is accessible to everyone and real-time.

Yes, there’s money to be made from blockchain technology, and its financial opportunities go beyond Bitcoin as an investment. Here’s a list of ways you can make money in the blockchain.

1. Bitcoin

Zeroing in on Bitcoin as an investment is arguably the most popular cryptocurrency investment route. That’s understandable, given how Bitcoin trailblazed the emergence of cryptocurrency. Consider Bitcoin as a digital currency that cuts the middlemanfinancial transactions no longer need to pass through payment processors or banks.

Bitcoins have a built-in limit that’s not more than 21 million coins. This is where its money-making potential comes in. Like gold, it’s considered rare and exhaustible; thus, pricey. And when demand rises, your stockpiled Bitcoins become even more valuable. Contrary to popular belief, Bitcoins and cryptocurrencies do not work outside the bounds of the law. These are perfectly legal currencies.

2. Cryptocurrency

While Bitcoin as an investment is the preferred cryptocurrency by many, it is by no means your only choice. There are other digital currencies you can use to invest in blockchain. Notable names include Ethereum (ETH), Ripple (XRP), Litecoin (LTC), Tether (USDT), Bitcoin Cash (BCH), Libra (LIBRA), Monero (XMR), EOS (EOS), Bitcoin SV (BSV), and Binance Coin (BNB).

Remember that the prices of these digital currencies tend to fluctuate a lot. Get into this type of investment only if you are prepared for outcomes, both good and bad.

3. Purchase stocks from blockchain firms

If you are not risk-averse, you can invest in lesser-known blockchain companies, such as SALT Lending, Voatz, and Circle. You purchase stocks, and these companies’ growth will consequently cause the appreciation of your supplies over time.

Alternatively, if you want to be on the safer side, you can invest in more established blockchain companies.

Either way, there’s risk involved in this type of blockchain investment, so be ready for both wins and losses.

However, there’s a way to mitigate those risks. For instance, you can work with a broker you can trust and who’ll expertly guide you through the process. Well-reviewed online brokers include E*Trade, TD Ameritrade, Fidelity, TradeStation, Charles Schwab, and Interactive Brokers.

4. Crowdfunding

From a relatively obscure financial tactic, crowdfunding has now become mainstream. It is now a widely-accepted means to raise seed capital for a startup business. Many startups have been ditching traditional crowdfunding in favour of blockchain technology.

Here, new projects are presented to potential investors, and this is where you come in. You can purchase cryptocurrency tokens from these startups in exchange for shares. In the event, the startup grows into a successful business, and you reap substantial financial rewards.

Best Practices

You will not only invest money in blockchain; you also need to invest time and devote enough hours to research and understand the technology. Otherwise, you will get into it blind, leading to failure.

No, there’s no winging it. Remember that investing via blockchain technology need not be a gamble. You can be strategic about it, with your eyes on the prize.

Allow yourself only calculated risks—the operative word here is calculated. Do not be swayed by hype, nor should you listen to unnecessary forum noise. Consult with the right people. Also, understand what you’re willing to lose and be honest with yourself. You cannot invest and be racked with guilt and remorse later due to substantial financial losses.

Lastly, diversify your portfolio. That is if you have sufficient funds to spare. Do not put all of your eggs in one basket. Invest in cryptocurrency while participating in blockchain crowdfunding. This way, you are exhausting all the financial possibilities available to you.

Wrapping up

If you want to be an expert on how blockchain works, it won’t suffice to learn and stop when you feel like you’ve gained the knowledge you need.

Keep yourself updated because, as with any technology, blockchain continues to grow and evolve. Another moniker for blockchain, distributed ledger technology (DLT), has been gaining traction. You do not want to miss out on these trends.