How do people make money in the cryptocurrency industry?

Scamming people, running a pyramid or ponzi, selling shovels.

edit: I'm only semi-joking, the official Bitcoin forums quite literally has pyramid and ponzi and straight up fraud schemes that people happily sign up to and refer each other to. There is no attempt to hide them or look legitimate. You'll find ridiculous-to-outsiders threads asking "hey anyone know a good ponzi i can sign up for will use your referral"

The marketplace subforum is nearly totally populated with stolen/hacked accounts, subscriptions using fraudulent/stolen credit cards, it's pretty much a fraud forum.

Illicit tactics aside which other comments seem to cover, for HN'ers, I suspect there's a very real opportunity to make money by providing security auditing services to crypto startups and projects.

Other ideas:

- Crypto lending/staking (risky)

- Build blockchain based games (e.g. https://roobet.com/)

- HODL (seriously, a lot of the money made is from buying and waiting)

- Community-building (YT Channel, newsletter, blog, meetups, etc.)

- Arbitrage (success stories are not googleable)

- Flash-loan strategies (this verges on illicit, ymmv)

- Build a fund. If you have a wealthy network that's not techy, there's probably interest.

- Crypto-art (NFTs etc, budding community)

- Mining. This is profitable if you have access to free/cheap power

- Build technology that actually leverages blockchain -- streaming micropayment-based business models, truth estimation via prediction markets, distributed computing (Filecoin/RNDR/Codius/GNT), idea X where crowdsourcing is key to success. I agree that most of this stuff can be built with a centralized model, but that doesn't mean there isn't money to be made going the crypto route. In some cases the crypto aspect might be the interesting thing that builds your top of funnel and makes users actually use it. After all, real crypto enthusiasts are wanting for valid use cases.

I few years back I made an ETH collectibles game, like Crypto Kitties, but simpler. It was just to learn how eth/solidity worked, but to my surprise people actually started buying and selling the items. It made me around $20k in a few weeks (took a small % of transactions). Eventually, I realized it was basically just a bunch of crypto wales playing hot potato and at times using bots to bid things up. No one really thought these items would have any long term value. Not much different than most alt coins I guess. It died out on its own and I was happy do be done with it since running an online casino wasn't what I wanted to do with my life.

I'm pretty sure that the main way to consistently make money in the crypto industry is to sell snake-oil to people who ask questions like that.

Get an interesting idea funded by someone who's chasing fads, then convert the funding to developer salaries while building something technically interesting even if practically useless.

Either selling shovels (https://micky.com.au/bitmain-earned-300-million-in-profit-fo...) or making a market for people to trade in (https://www.coindesk.com/binance-to-earn-profits-between-800...)

While I can't speak for those running a full-on sales-and-services business, simple HODL speculation has worked out well for me. I aim to trade rarely and discuss trading even less, so I have simply picked out new issues that have a remotely credible whitepaper, placed a bet, and waited. The ones that pan out become the seed for the next round a few years later. My biggest worry is simply in losing the wallets or fatfingering a trade.

The industry as a whole doesn't have to be showing profits or cashflow so long as capital keeps coming in -- and it does, because it's sufficiently disruptive to finance that everyone looks for an angle, and because it's very easy to create new tokens, the money is being made, in some sense, simply by putting out the hat and asking: "is this idea good?"

- order book based exchanges like bitstamp, kraken, coinbase pro - brokers like coinbase, there are loads of local brokers in various countries - otc desks, for bigger transactions, wealthy and lazy clients, privacy oriented clients - p2p exchanges like paxful, localbitcoins - mining - payment processing (bitpay, coinify) - AML/KYC services like chainalysis, elliptic - selling luxury/expensive stuff for btc for those who got rich too quickly - lawyer, accounting, tax related services - selling precious metals for crypto - prostitutes (?) - gambling - privacy oriented services (vps, vpn, domains etc)

Grey area - blackmail SEO services - mixers - purse.io style services

Illegal - ponzi schemes - ransomware - online drug markets - hacking, phishing, fraud markets - scams - hacked server credential markets (have heard about this, not sure though it exists)

One way that I made money was lending cryptocurrency through DeFi platforms.

Basically:

- Buy DAI (which is ~1DAI to 1USD) through any platform (e.g.Coinbase)

- Transfer to your local wallet (e.g. Metamask).

- Then lend it on one of these exchanges [0].

One exchange that's not on the list https://app.fulcrum.trade/lend has a higher interest rate (probably because they're trying to get users as they were hacked earlier this year).

Last 2 months I held DAI in Fulcrum and I made about 2.5% on my money. Also holding ETH for the last 6 months, which has paid off by sheer luck.

[0] https://defipulse.com/income

I make trades based on analyzing data that historically has not been available in financial markets.

I designed custom compression algorithms to manage the huge amount of data.

I came up with a new charting technique for the data that I have yet to see elsewhere.

Then I apply some "technical analysis" principles that traders use to analyze price data, but I add a few ideas of my own devising to make the analysis appropriate for the kind of data I'm using. Edwards and Magee are a huge influence on my work.

I'm working on algorithms now to automate the analysis.

Theft by refusing to process legitimate KYC seems to be the most popular way these days:

https://news.ycombinator.com/item?id=25345719

Mostly by equivalent of selling showels to gold diggers.

It does not necessarily means any fraud but almost always means NOT being engaged into pure price movement speculations.

Just look at the comments and realize you will not find that kind of advice here. It's like asking Microsoft in the last century how to make money with free software.

Look at what you already know and see how these skills are needed. If not sufficient, learn compatible skills to expand your skillset in a way to serve the market needs.

Defi is where the effort is. If you are a developer, knowing how to build then deploy smart contract on ETH is the 101.

Training - complete, objective information is sorely missing in this space.