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What is Fiscal Year?

by Fxigor

In general, we all know that one year has, overall, twelve months. Some companies release their reports after every three months. This is generally known as the quarterly reports and as the name suggests, having a performance report out once in three months means that the three-month trio is a quarter. Other companies release their reports twice a month, which is normally after every six months. These are known as biannual reports, which contribute to discussing the performance that had happened in the past six months with possible reflections for the future.

What is the fiscal year?

The fiscal year represents a 12-month or 52 weeks period that an organization uses to report its finances. However, the fiscal year does not always start at the beginning of the year. Usually, the fiscal year starts at the beginning of a quarter, such as January 1, April 1, July 1,  etc.

How long is a fiscal year? The fiscal year is 12-month or 52 weeks period long.

However, what happens when the company decides to release its reports once a year. When a company releases a report once a year suggesting how the performance was and future perspectives, this is known as the annual report, and the year for which the report was released is referred to as a fiscal year. The companies often release the report in December or the following January; however, there is no hard and fast rule related to it, and it can be changed as well. For example, a fiscal year may run from March of one year till March of next year.

When does the fiscal year start?

Usually, the fiscal year starts beginning of a quarter, such as January 1, April 1, July 1, etc. Each country or sector has a different fiscal year starting date. For example, the fiscal year for the US federal government begins on October 1 and ends on September 30. The fiscal year 2021 begins on October 1, 2020, and ends on September 30, 2021.

As established above, a fiscal year consists of a company’s performance from one month to the same month in the next year. Most companies adhere to the traditional calendar period of having a fiscal year from January till December. However, many companies do not follow the conventional calendar and run their fiscal year differently.

If a fiscal year starting from July 2019 and ends in June 2020, then the report would be for the fiscal year of 2020, and it would be denoted by FY20.

There is another terminology known as fiscal year-end, which means the fiscal year’s date would be ceasing. In America, the government has a fiscal year that runs from first October and ends on 30th September. Therefore, every government or company changes the fiscal year according to their profits and which months are more suited to them. On the contrary, Facebook has a fiscal year that adheres with the conventional character that runs from January till December. It is also much easier to remember and does not hold confusion; however, you should know about the different companies and their fiscal years when working for one.

What fiscal year is it now in the US?
It is the 2021 fiscal year or FY21 in the US because the fiscal year 2021 begins on October 1, 2020, and ends on September 30, 2021.

 

What is the meaning of FY?

FY is the abbreviation that is used for a fiscal year. In general, when you speak of a particular year and how the fiscal year report would be, you use some numbers in two digits after the abbreviation of FY. For example, if you speak of a fiscal year that starts in the year April 2020 and ends on 31 March 2021, you would be speaking about the fiscal year of 2021, which would be denoted by FY21.

When does the fiscal year end?

There is another term which is known as a fiscal year-end. As the term denotes, it is that date at which the fiscal year is coming to an end or is ceasing. It is usually the last date of the month, especially the last date of a quarter. For example, it can be March 31, June 30, September 30, or most commonly used, December 31. It varies and depends on the companies’ profits, their working, and vision, impacting the fiscal year.

Why are fiscal years not the same running as the conventional calendar?
It is effortless to align your fiscal year with the conventional calendar; however, there are many factors that the companies have to consider to see what the fiscal year would be. Some of these factors are listed below:

1. Their business: The business spendings and profits are different for each company, and in general, it is not very wise to align the calendar’s fiscal year. Sure it is much easier to do so; however, in general, it is not recommended. This is because the company has different strategies and different sales viewpoints as well. For example, a company like Apple or H & M has much higher profits when there is a holiday season. Therefore, when they compile a report, they are likely to put the higher numbers at the end of the report, leaving a lasting impact on the reader’s mind. Therefore business people are also more likely to invest in their stocks at the last minute as well. Thus, this is a strategy used in the business world and is adjusted according to the business seasonality as the term is used.

2. Savings: When writing a fiscal year report, you have to write an audit report. In this, you have to hire a specific accountant that may generally be busier at the end of the year in December. They are also likely to charge a higher fee at the end of the year because they know their demand. This is why some companies choose a fiscal year to run from mid of one year to mid another to be free and conduct their audit reports effectively.
3. Starting date: Many companies begin their activities in the middle of the year or from the second quarter. The starting dates of the company also effectively have an impact on what the fiscal year would be. The expenses should be reflected when the company has started working effectively. The revenues and profits would also be written in the report effectively; however, if a company does not have a starting date, then its report would leave no impact as there would not be any well-known facts to be written.

Can a fiscal year be changed as per the company’s demands?

Yes, a company can change the fiscal year as per their own need and as per their own schedule. A lot of factors affect what the fiscal year can be. These can be affected by forecasts, profits, and holiday seasons. Overall, a company needs to assess the quarter where the highest sales and profit made to make the ending year numbers the highest. This will have a lasting impact on the company’s fiscal year report as well. If a company makes the highest profit in August, it can change its fiscal year accordingly as there is no hard and fast rule applied to it.

Is a tax year different from a fiscal year?

A tax year is specifically known to have the returns and taxes accounted into a single document. The tax year can also run from January to December or from year one to the month of year two. It is up to the company to choose between a fiscal year or a tax year, but if you choose the tax year, you have to calculate all of the taxes and file them before the closing.

What is the government fiscal year?
The government fiscal year is annually reflected in the budget. It does not necessarily start from January and is different for different countries. For example, in the United States of America, the fiscal year starts from the first day of October.

What is the meaning of a quarter?

When the company decides to release its reports after every three months in a year, this is known as a quarterly report. This is generally known as the quarterly reports and as the name suggests, having a performance report out once in three months means that the three-month trio is a quarter.
In general, the year which has twelve months has four quarters. A certain abbreviation designates each quarter; for example, quarter one is written as Q1, quarter two is written as Q2, quarter three is written as Q3, and quarter four is written as Q4.

Quarters are also written in such a form that designates that it belongs to a certain year. For example, if you see Q1/21 written, you refer to quarter one of 2021. You can write different quarters with years to grasp the concept as well.

When we speak about the companies, there are generally two types of terms that are used widely. One is known as the fiscal year, and the other is the fiscal quarter. As discussed in the article, the fiscal year refers to a whole year. Although it can differ from the calendar in terms of not necessarily starting in January, most companies adhere to the conventional calendar practice and begin the fiscal year in January that runs till December 31. However, fiscal quarters refer to four quarters as discussed, and mostly they adhere to the calendar. In this term, you can see that the quarters are as follows:
1. January, February, March- Quarter One- Q1
2. April, May, June- Quarter Two-Q2
3. July, August, September- Quarter Three- Q3
4. October, November, December- Quarter Four- Q4
It is important to understand that a fiscal quarter is aligned or in line with the fiscal year.

Do quarters in every company go by the conventional calendar system?

The quarters of the different companies may mean different things. For example, it is never a hard and fast rule that quarter one would be the busiest and quarter two and three would be slow for every company. The first quarter doesn’t need to start from January till March. Many companies such as Walmart start their quarter one in February, and then the cycle continues as it is. This is because each company and their dynamic differ from one another, and there is no hard and fast rule applied to the quarters. They have to consider different factors as well, such as their sales and business growth. Many companies also do not consider the starting of the month as the beginning of a quarter. They may begin with a specific date, for example, the fifteenth of a month.

Filed Under: Finance education

Stock Market Terms to Know

by Fxigor

The stock market is a term that is known to everyone. However, many people are confused or do not have a clear idea of what different terms mean. They may have heard of it when people around them speak about the stock exchange or market values. However, you must understand the basics of the stock exchange market To grasp the concepts fully.
This article will tell you all about the terms used in the stock market and why it is important to learn them. Consider this article as a basic 101 course on the stock market and exchange.

What is the stock market?

The stock market represents an exchange place where participants buy and sell shares of publicly listed companies.

Why is it important to understand the stock market terminologies?
If you want to fully grasp the concept and understand what a stock market really is, you need to fully know the definitions and concepts of the terms used in the stock market. These terms do not generally mean that they are single-handedly targeting one thing; however, these terms can also mean different things. Many times, people use the terms to influence those who have joined the stock market, whereas many times, the people are using the terms to influence the stock game effectively. These can be used to predict the stocks and patterns in the coming years as well. So as an amateur, if you are new in the business world and want to invest in stocks, you must have a preliminary understanding of the terms. So the next time a person uses such terms around you, you may understand what they are speaking about.

Basic and Commonly Said Terms in the stock market
In this section, we will write the stock market terms, and their definition will be given as well. You can understand the terms and research more about them to have a clear picture.

1. Annual Report: As the name indicates, an annual report is a yearly report. This report is written and shared by the company once a year, and it entails information about the company’s performance in one year. It can also be used to predict new behaviors, and a good annual report is important to ensure that the people will invest in your stocks. People generally assess the financial stability of a company based on how well their annual report is.

2. Arbitrage: When you buy a stock from one market at one rate and then sell it at another market for a different rate, you calculate the difference. This difference between buying and selling rates is known as arbitrage. You can have arbitrage if one stock is available in two different markets at different rates. You can buy a Stock A at ten dollars from one market and sell the Stock A at eleven dollars in market two.

3. Averaging Price: As the principle of economics also states that when a thing is much more in supply, then the price will go down. This is applied in the stock market as well. When a person invests more and more in stock, the stock price is likely to fall. This means that the purchasing power is also decreased. The price can shoot up later as well; however, it can vary according to the circumstances.

4. Bear and Bull Markets: These terminologies are affectively used in terms of how the stock market is faring compared to other ones. For example, when a stock market is going in a loss, it is downward. This is known as a bull market. Whereas in contrast, if a stock market is going in profit and yielding much more in principle, this constitutes an upward trend. This upward trend in the speech of the stock market is denoted by a bear market, constituting that the stock market is bearing an upward trend. You can refer to them as simply profit and loss principles.

5. Beta: This beta in the stock market refers to the stock movement compared to the movement of the whole market. For example, if we say that a stock has a beta of 1.5, it means that when the market moves by one point, the stock will move by 1.5 points. This holds for the opposite direction, which means that either positions or movements of the stock and the market are proportional to one another, and they hold influence over the other as well.

6. Blue Chip Stocks: The big companies and corporations have stocks known as blue-chip stocks. They are well known for their on-time fiscal payments and efficient management of dividend payments as well. Therefore, these are well-reputed stocks available in the market. The terminology blue-chip came from the highest bidding chips that are generally used in casinos. Those chips in casinos were used for gambling.

7. Bourse: Bourse is just another term used for stock markets. In general, it was used for wealthy men who used to trade stocks in a house. The house was referred to as bourse. However, nowadays, it is used to denote a stock market that exists outside of America. Mostly it is used to denote the stock markets present in Paris.

8. Broker: A broker is a person who works for a commission. He is the one who generally buys the stock or sells it. He is generally investing in exchange for money.

9. Bidding: The bid is the highest price that the buyer or the one who is trading is looking to make to purchase a stock or to make an investment. There are two more terms related to bidding, which are spread and ask price. One of them is the “spread,” which means a difference between the two prices. The second term is known as “ask price,” which means that the investment is made at the same price given by the seller him/herself.

10. Closing: This is the easiest to understand as closing is when stock will shut down or close to stop any more trading. There are different times associated with the stock markets, and you need to understand which stock market closes at what time. The largest stock market in New York closes at four.

11. Day trading: When a person buys a stock and then sells it on the same day, it is known as day trading. You should make sure that the trading is done before the stocks on the day close. If it has closed, then the trading would be shifted to the next day and would not be considered day trading anymore.

12. Dividend: When a company shares its profits equitably amongst its employees, this shared profit is a dividend. This is generally what the company has made over a period of time, and it can be paid after three months (quarterly), after every six months (bi-annually), or once a year (annually). You must understand that not all companies distribute dividends among their employees. However, the companies that do are generally considered stable financially and capable of taking care of their employee’s needs.

13. Exchange: Exchange is that place where different investments happen. The well-reputed investments are in the New York stock exchange and NASDAQ.

14. Execution: The execution generally refers to when an order has been made about the buying and selling of the stock. For example, if you execute the decision and put it on paper to sell 100 stocks, it means that all hundred of them will be sold.

15. Haircut: When we speak of bidding and the asking price, which is the price given by the seller himself, this means that there is a fine difference between the bid and the asking price. This difference is known as a haircut in the stock market exchange terms.

16. High: When the stock reaches the maximum points or levels, you have reached the high. This can refer to the fact that the stock is now at a higher price than previously.

17. Index: An index is a standard that works as a reference when speaking of the markets and stock exchanges. If your stock is at a lower number and the index is generally higher, then it means that you will yield loss. Therefore understanding indexes is significant.

18. Initial public offer: As the name indicates, the initial public offer (IPO) is when you make the stock available to the market for the first time. It is generally the first sale that you apply. This also happens when a company has gone from private to public and openly exposes its stock to the market.

19. Leverage: When you take the help of your broker to get more stocks to yield more profit, it means that you are using the principle of leverage. It is a precarious business and is generally not recommended unless you know how it works.

20. Low: It is the opposite of what we discussed of high. It means that the purchasing price would be termed in a downward trend compared to going up and yielding loss.

21. Margin: When you borrow money from a broker to buy an investment, it means you are at a margin. It is also very risky and not recommended unless you have a good know-how of how it works.

22. Order: When you apply a bid to buy or sell an investment, it means order.

Conclusion:
There are many other terms used in the stock market; however, you need to research well in understanding how the stock market works.

Filed Under: Stocks

Amazon Restricted Stock Units

by Fxigor

Recently we created an interesting Amazon price prediction for 2021. However, we didn’t talk about Amazon restricted stocks units, RSU.

Amazon Restricted Stock Units

Amazon restricted stock unit or RSU share represents vested shares where the Amazon employee will get a stake in the company. Still, the stake will have no value until the completed vesting process. Since the vested units are income for the employee, some shares may be used for paying income tax. The other shares will be transferred to the employee, who can sell them if he wishes.

 

Do Amazon employees get stock?

Yes, employees in Amazon that work above 30 hours per week can get Amazon restricted stock unit (RSU) shares in the following way:

Year 1: Amazon base pay + sign-on
Year 2: Amazon base pay + sign-on
Year 3: Amazon base Pay + RSU
Year 4: Amazon base Pay + RSU

Some employers offer compensation to their employees in restricted stock units (RSU), which form company shares. For the eligible employee, a distribution and vesting plan is defined, which specified the performance milestones that the employees should achieve or the duration for which the employee will remain with the company. Though the employee will get a stake in the company, the stake will have no value until the completed vesting process. The RSUs have the market value after they are vested.

Amazon Restricted Stock Units Features

Companies are using different ways to compensate their employees, and RSUs give the employee a stake in the business. There are restrictions on RSUs during the specified vesting period, which may vary since the shares cannot be sold during this period. After the vesting period is over, they are just like other shares of the company. While the warrants or stock options may expire without any value, the value RSUs will vary, depending on the share price. For tax calculations, the income for the year in which RSUs are vested should include the value of all vested RSUs

Restricted Stock Units History

In the mid-2000s, major accounting scandals were featuring large companies like Worldcom and Enron. After these scandals, companies started preferring RSUs for compensating their employees, especially senior executives, instead of stock options. The Financial Accounting Standards Board (FASB) in 2004 has made it mandatory for companies to treat the stock options offered as an accounting expense to make it similar to equity. Due to tax evasion, malpractice, scandals, fewer companies chose stock options for retaining and attracting talent after 2004. Instead, RSUs, which were earlier offered to senior management employees, were also offered to other employee levels. From 2003 to 2005, the number of stock options granted by each of the Fortune 1000 firms declined by approximately 40%, while the number of RSUs issued increased by 41%.

Amazon employee stock benefits

RSUs are popular since they give the employee the incentive to remain with the company for a longer time, helping improve its performance so that the share value increases. Employees who hold shares until the RSU allocation is complete will also receive capital gains if share price increases, though some shares may be withheld for paying income tax and taxes on the capital gain. Employees prefer RSUs since the administration costs are lower since no shares have to be tracked, recorded. The company can differ in issuing shares till the vesting schedule is completed, so the dilution of shares is delayed.

Amazon gives a fixed yearly bonus at the beginning of the work year, which is not performance-related. You get the bonus when you start, then at every anniversary.

Restricted Stock Units Limitations

  • Because, at the end of 2nd year, when the sign-on disappears, the base pay would not be the same as CTC in the first year
  • Amazon employees don’t get a hike on sign-on bonus if you go to a new company.
  • RSUs are heavily market risk dependent.

RSUs do not pay dividends since actual shares are not allocated. In some cases, the employer can choose to pay the equivalent of a dividend into an escrow account. This amount can be used for paying taxes or reinvested to purchase more shares. The Internal Revenue Code has section 1244, which controls the taxation of restricted shares. The RSU is included in gross income for calculating taxes from the date when the vesting date when the shares become transferable. Employees cannot pay taxes before the vesting date since they are not considered tangible property by the IRS. The RSUs do not have voting rights till the vesting date. If the employee leaves the company before the vesting date, the remaining shares are forfeited to the issuing company.

Other information

RSUs are used extensively to help companies retain their employees since they can make a good profit if the company’s share prices increase due to its success. In stock options, the price specified is often higher than the market price, so the employee will benefit only if the company share price rises quickly. He can also choose not to purchase shares. In comparison, for RSUs, the employee will receive a fixed amount of shares after remaining with the company for a specified time period. This is clearly defined, so he is always going to benefit. Till they are converted to common shares, PSUs do not have voting rights and do not pay dividends in most cases.

Filed Under: Stocks

Tesla vs. Amazon Stock

by Fxigor

Tesla and Amazon stocks have excellent performance in the last several years. Please see Tesla vs. Amazon comparison Table below:

Tesla vs. Amazon Stock
In comparison Table above, we can see 4 essential differences between Tesla and Amazon equities such as:

  1. Amazon did last stock split more than 20 years ago, while Tesla did stock split in 2020 ( 5-for-1 stock split)
  2. Tesla’s outstanding stocks have increased quite significantly in the last 6 years. There were  960 million shares in Q4 2020.
  3. Tesla has earnings per share less than a dollar while Amazon more than $40.
  4. Tesla has a substantial P/E ratio, much more than Amazon. A high P/E ratio could mean that Tesla stock is over-valued. The main reason why the Tesla P/E ratio is high is that investors expect high growth rates in the future because Tesla is a world leader in electric car production.

Filed Under: Stocks

How to Make Money With Cryptocurrency?

by Fxigor

Cryptocurrency History

Today, we are well-versed with the terms cryptocurrency and bitcoin, but there was a time when most central and federal banks nullified the idea of having virtual currency completely. Despite all the initial challenges, the crypto industry had seen significant growth since 2008, when Satoshi Nakamoto published the original Bitcoin whitepaper. The last decade has been great for cryptocurrency. 

Everyone’s interest in cryptocurrency peaked in 2017, and the most searched Google phrases were ‘how to buy BTC,’ ‘how to invest in cryptocurrency,’ ‘how to earn money from cryptocurrency, and so on.  

Crypto offers a highly volatile market with continuous price fluctuations. However, the market has increased from $10bn in 2013 to $237 in 2019. In addition to that, there has been a 60% annual growth in Bitcoin unique transactions and accounts.

The crypto space has been offering steady gains since 2009 to its early investors and adopters. People like Chanpeng Zhao or Winklevoss twins have sued this opportunity and invested their crypto earnings into building successful businesses. Changpeng Zhao created Binance, which is the largest exchange for crypto in the world. The Winklevoss twins, on the other hand, founded the Gemini exchange.

There are many more crypto success stories. For example, Valery Vavilov started a bitcoin miner, Bifury, with the early interest that he received in the blockchain. His company now sells and produces Bitcoin mining hardware and generates a revenue of over $400m. Anthony Di Lorio is amongst the early financers of Ethereum blockchain development projects. He has also invested in crypto projects like Zcash, Vechain, and Qtum.

How to make money with cryptocurrency?

To make money from cryptocurrency, you can try the following ideas:

  1. Invest in long-term cryptocurrencies (buy bitcoin, or buy ethereum, etc.)
  2. Trade cryptocurrencies for profit using CFD (forex brokers)
  3. Make money using lending and staking services
  4. Use crypto social media to earn money as a content creator
  5. Earn money as a crypto miner
  6. Get airdrops and forks (Airdrops are free coins that are sent to your wallet.)

Investing in cryptocurrency can still make investors skeptical, mostly because it is still not regulated in several currencies. However, if we look at the statistics, crypto is one of the fastest-growing financial markets. Yes, you might have skipped the boat for making early gains; this market still has plenty to offer as it is still in its initial stage. For example, the internet was developed in 1969, but the World Wide Web was not introduced till 1990. If we consider these comparisons, crypto is just over a decade old. There is still so much potential for development.

A venture capital form recently asserted that the crypto space grows in cycles. The cycle begins with the price rise of crypto assets, generating traditional media and social buzz. The media’s attention and excitement act as a pull, and more people join the race. They contribute in terms of ideas, new projects, new codes. This ultimately makes way for the next cycle.

As of 2021, we have witnessed three cycles of cryptocurrency – 2011, 2013, and 2017. Even though each cycle saw a price fall, the growth in social media activity, the number of start-ups, and developer activity has been steady. The next cycle will likely peak when there is advancement in technology.

As institutional investors are becoming more willing to invest in cryptocurrency, we predict that long-term investment in the crypto space will be beneficial. If we compare trades made in the crypto space with those made in the Forex market, it is just one percent of that. Even though the market has a capitalization of over $200bn, its global equity market fraction is still just $71tr (2019), and the global debt market is a little over $100tr (2018). Global real estate should also be considered here.

Six Strategies You Should Consider to Make Money With the Help of Cryptocurrency

There are a plethora of strategies that you can adopt if you want to make gains using cryptocurrency. One must keep in mind that the crypto space is the most volatile compared to other financial assets and commodities. Therefore, you must keep an eye on the news and trends continuously. Here are 6 strategies that you can use to make profits in this world:

Invest in Crypto

When we talk about investing, we refer to long-term investments by holding an asset for a long time. Generally, the buy and hold strategy is the most suited for crypto. In terms of the short term, crypto can be very volatile but shows tremendous potential in long-term investments. The investment firm, Fundstart has done extensive research showing that higher gains with Bitcoin can be expected when trading it 10 best trading days within a year. Missing these days, in fact, can decrease your gains by 44%.

This proves that cryptocurrency investment should be long-term. Also, it would help if you considered crypto in the portfolio context. It would help if you looked at your risk tolerance and investment goals before initiating anything.

Trade crypto for profit

Many believe that trading and investing are synonymous when, in fact, these two are different. The main difference here is the time horizon. Investing is done for a longer period of time, while trading is all about making the best of short-term market fluctuations. If you plan to trade crypto, you need to level up because it requires certain experience and skills. 


Open Avatrade account to trade cryptocurrencies

One doesn’t require an in-depth knowledge of how the blockchain and related projects work, but you have to be a master of reading charts and understanding technical indicators. If you wish to trade, you must focus more on price action and relate it to its historical context. This will allow you to predict the future movement of crypto prices.

Online cryptocurrency trading can be done by directly buying and selling crypto coins or using its derivatives like CFDs. CFDs allow you to focus on the underlying asset’s price direction, which is comparatively easier than chasing crypto coins directly.

You can either take a short or a long position based on whether you expect the asset’s prices to fall or rise. CFDs are favored by many because they allow you to profit irrespective of whether the market is bullish or bearish.

Another benefit of trading CFDs is that it allows you to trade on margin, thus, offering greater liquidity and smoother execution. One thing that you need to keep in mind is that CFDs are leveraged products. This means that both profits and losses will be magnified.

Lending and Staking

These two ways are quite similar, and investors can make money with the help of altcoins. Staking refers to the act of locking coins inside your crypto wallet and subsequently receiving rewards that are used to validate your transactions of the PoS (Proof of Stake) network. You are not required to mine coins, but the PoS algorithm is responsible for choosing transaction validators. The basis for this selection is the number of coins that can be committed to the stake. PoS is energy-efficient and does not need expensive hardware. Cold staking is another option that allows investors to stake while keeping coins in an offline wallet. You can stake NEO, Stellar (XLM), and Tether.

Staking and lending happen simultaneously. While you are staking, other investors are lending crypto to the network. This is done to verify transactions and to maintain security. You can also make money by lending your crypto to other investors who will pay you interest for your asset. You will find several platforms where crypto lending can be found.

Crypto Social Media

The last two years have taught us how to make a profit using social media platforms. If you have skills and knowledge, you can make a profit with it in the virtual world. Dan Larimer, in 2016, launched the first blockchain-based channel, Steemit, on the social media platform. Users get rewarded with their domestic currency for creating content on it. The platform went into some trouble in 2017 and has witnessed a steady decline in users since then.

Steemit might not have been the best example; it surely turned out to be the pioneer and made others realize the potential of using social media for making money. Now there are other similar platforms as well, like Scorum, that are continuously growing.

Crypto Mining 

One of the oldest ways of making money is through mining. It is an important component of the PoW consensus or the Proof of Work. Through block rewards, miners are rewarded new coins for undertaking these functions. Unlike the early days when mining was possible through a desktop, you now need specialized hardware for it. 

Talking about supporting a network, you can make money by running master codes as well. Master codes are nothing but wallets where a copy of your entire network is hosted.

Both ways require technical expertise along with upfront and ongoing investment to support the system. Mining is not something that a layperson can perform.

Airdrops and Forks

You must have heard of the benefits of being at the right place at the right time; airdrops and forks are the equivalents of this saying in the crypto world. Sometimes, an exchange distributes free tokens, known as Airdrops, to generate awareness about their project. On the other hand, forks are changes or upgrades that take place in a protocol while creating new coins. Holders of the original blockchain coin get free tokens whenever the blockchain forks.

Filed Under: Cryptocurrency

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