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SAND Cryptocurrency: Where to Earn with Your Tax Return – DataDrivenInvestor

DataDrivenInvestor
Mar 13
Annual Percentage Yield (APY) is equivalent to compounding so that you will earn interest both on your principal investment and the interest it accrues.
A cryptocurrency, crypto, or altcoins is a digital currency that functions as a medium of exchange via a computer network and is not reliant on any central authority, such as a government or bank, to uphold or maintain it.
Cryptocurrencies require a method to verify transactions between parties to ensure their payment and accuracy. There are two verification methods; one is Proof-of-Work (PoW), more commonly known as mining.” Proof-of-Stake (PoS) is another popular method many cryptos use to achieve this verification. Therefore, you can only stake PoS coins and tokens.
Cryptocurrency mining is “The competitive process that verifies and adds new transactions to the blockchain for a cryptocurrency that uses the proof-of-work (PoW) method. The miner that wins the competition is rewarded with some amount of the currency and/or transaction fees.”PC Mag.
The first and most popular cryptocurrency, Bitcoin (BTC), is a PoW coin and requires mining. SAND is a PoS coin.
PoS, with the help of locked staking, is a consensus mechanism used to validate cryptocurrency transactions.
A consensus mechanism is a fault-tolerant mechanism used in a blockchain to reach an agreement on a single state of the network among distributed nodes. These are protocols that make sure all nodes are synchronized with each other and agree on transactions, which are legitimate and are added to the blockchain. — Direct Science.
Similar to locking your savings into a certificate of deposit” (CD) with a bank for a period of time in exchange for a higher rate of interest than a regular savings account.
Then, locked staking owners with a specific number of the staked cryptocurrency can stake their coins in this system. This will give them the right to check new blocks of transactions and add them to the blockchain.
However, if they commit a fraudulent act, such as validating a transaction that should not be validated or others, they could lose their staking “rewards” and even a portion or all of the coins they staked.
Specialized software “solves” complex mathematical puzzles or problems to validate the new blocks in the chain. Thanks to locked staking, if the people chosen to validate these new blocks get the puzzle wrong or attempt to change the block, a penalty is taken.
Depending on the program you chose, you get a fraction of the stake as a reward if you get the puzzle correct.
This method is an alternative to PoW, the first cryptocurrency consensus mechanism developed. Because PoS is much more energy-efficient, it has grown in popularity as attention has shifted to how cryptocurrency mining negatively affects the environment.
Individual coin ownership records are stored on a digital ledger, a computerized database that uses strong cryptography to secure transaction records, control coin creation, and verify coin ownership transfers.
These blocks of recorded data are known as a blockchain. A blockchain’s goal is to enable digital information to be recorded and distributed but not edited.
A blockchain, in this sense, serves as the foundation for “immutable ledgers,” or records of transactions that cannot be changed, deleted, or destroyed.
Immutable ledger in blockchain refers to any records that have the ability to remain unchanged. It cannot be altered and hence the data cannot be changed with ease, thereby making sure that the security is quite tight. Immutability means that it is very difficult to make changes without collusion.” — Decentralized Finance.
Blockchains are also referred to as distributed ledger technology (DLT).
Distributed Ledger Technology (DLT) is a protocol that enables the secure functioning of a decentralized digital database. Distributed networks eliminate the need for a central authority to keep a check against manipulation. DLT allows for storage of all information in a secure and accurate manner using cryptography.Investopedia.
There are many different types of crypto everybody can buy, such as but not limited to BTC, Ethereum (ETH), Gemini’s PolkaDot (DOT), Fantom (FTM), and Cardano (ADA). Likewise, BTC and ETH are known as cryptocurrency coins, while others are altcoins or tokens.
Despite their name, cryptocurrencies are not currencies as we previously thought of them; they are digital currencies. There is no physical coin or token even though there is usually a “model” coin the developers draw as a representation.
These are divided into various categories, such classifications are commodities, securities, or currencies, altcoins, tokens, and cryptocurrencies are generally viewed as a distinct asset class in practice.
These different cryptocurrencies can be traded through online exchanges, much like real-world money exchanges you might see at the airport, such as Binance, a global cryptocurrency exchange.
Starting to trade cryptocurrencies on Binance, or any crypto exchange, is as easy as making a social media account (although, the steps get more complex when you must verify your identity, much like the bank) with six simple steps starting with the following:
1. Get a virtual private network (VPN). I use Windscribe, but there are many others.
2. Connect to a server.
3. Create an account.
4. Activate 2-factor authentication (2fa).
5. Sign up for a secondary wallet or get a “cold wallet” (I use Ledger Nano X).
6. Start trading on Binance.
Anyone with a computer or desktop can start investing in cryptocurrency from home.
This is why I use a cold wallet.
“Cryptocurrency-linked crime surged to a record high last year in terms of value, with illegal addresses receiving $14 billion in digital currencies, up 79% from $7.8 billion in 2020.Reuters.
I go into more detail in my article, Which Is the Best “Cold” Wallet for Your Crypto.
medium.datadriveninvestor.com
Sandbox (SAND) is an online Metaverse asset that allows buying and selling of online land and real estate. The Sandbox is a blockchain game that allows players to create a virtual world with non-fungible tokens (NFTs) on the Ethereum blockchain.
Players can create their own avatars to access the Sandbox Metaverse’s various games, environments, and hubs. You can consider the game to be a blockchain-based DeFi version of Minecraft.
The Sandbox launched in 2011 as a mobile gaming platform to compete with Minecraft. It became a hit, with over 40 million downloads worldwide. Then in 2018, co-founders Arthur Madrid and Sebastien Borget decided to investigate the feasibility of creating a 3D Metaverse on the blockchain.
Their goal was to enable users to truly own their creations as NFTs and earn rewards while doing so.
The Sandbox is a living virtual world filled with user-created content. Using Vox Edit and Game Maker, players can build and create their own NFTs while simultaneously monetizing them on the Sandbox Marketplace with the SAND token, the designated coin for the Sandbox.
Investors could earn relatively interest rates by staking their SAND for specific periods.
At 8.5% APY, a $1,000 investment would generate $.71 after one day. The next day, your interest would be multiplied by $1,000.71, which is the principal plus interest. The interest is added every day of the staking period.
You can stake 20 SAND tokens for ten days for 24.5% APY, which is the best interest but the least convenient because you must remember to re-stake every ten days, and you can only stake 20 tokens. This is and excellent deal for the inexperienced investor or an investor on a budget.
So, you can see how lucrative this could be compared to a bank CD at 1.90% APY for a minimum deposit of $500 for six months.
What’s more, your money in the certificate of deposit will not rise in price, but lose value due to inflation. However, it won’t arbitrarily lose value either, which crypto is apt to do.
A more extended lock-up period of 90 days would yield an even higher 14.5%. However, a limit of 5,000 SAND can be staked for this period. Binance is one of the best places for investors to earn this passive income with their coins.
As of 13 MAR, SAND is $2.79 per token according to CoinMarketCap. Therefore, you could buy 358 SAND tokens with $1,000.
In this 21st century, new investment opportunities are available to the public due to tremendous advancements in technology. Cryptocurrencies represent a secure and instantaneous digital payment system and a distinct asset class where fortunes can be made.
By buying and holding SAND, an investor can join a fast-growing global marketplace and earn risk-free, passive income through staking their coin.
However, be sure to check the in-and-out fees and the tax liability to ensure your expenses are not higher than the amount of interest you could earn.
BTW, for those who believe the naysayers claiming that crypto is dead, remember that they said the same thing in 2018. Bitcoin shot up to $19,650 on 15 DEC ’17, but by 29 DEC ’18, it had dropped to $3,729.
Many who had bought it at 19k were sadly disappointed when it dropped almost immediately and kept dropping. Since then, it recovered all of that and more, one time reaching $68,990.90 in November ’21. The pattern is almost identical to 2017 and ’18 only with a higher high and low.
So, it’s up to you; you can believe it is dead if you want. I intend to continue to invest in what I believe are excellent coins.
DISCLAIMER: This article is for entertainment and informational purposes only. It should not be considered financial or legal advice. Not all information will be accurate. I am not a financial adviser, and you should consider anything I write as informational and friendly banter to show you what is possible if you invest your money in these vehicles. However, there are no guarantees. Consult a financial professional before making any significant financial decisions.
Note: This post contains affiliate links. Read my disclosure statement for additional information.
Stephen Dalton is a retired US Army First Sergeant with a degree in journalism from the University of Maryland and a Certified US English Chicago Manual of Style Editor. Also, a Top Writer in Nutrition, Travel, Fiction, Transportation, VR, NFL, Design, Creativity, and Short Story.
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Stephen Dalton is a retired US Army First Sergeant with a degree in journalism from the University of Maryland. Top Writer in VR, Short Story, and Creativity!
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