Crypto Passive Income – The 10 Best Ways To Earn
Due to the rise of digital currencies, people are now able to make money online through various means. There is a wide range of new ways to make money online. This guide will teach you the 10 best ways to earn crypto passive income.
1. The Staking of PoS Coins
A proof-of-stake cryptocurrency is a blockchain-based alternative that enables users to secure their coins by having them placed in their wallets. Through the process, users are rewarded with new coins.
Since 2012, staking Proof-of-Stake coins have become a popular method for crypto-asset holders. Its continuous growth has made it a preferred method of earning interest in crypto-assets.
You can earn up to 5 percent interest on your coins’ holdings. For example, if you own NEO coins and RDD coins, you’ll have around 5 percent interest on your assets.
Aside from being able to earn crypto passive income, it also requires a certain level of technical expertise to successfully stake cryptocurrencies. This is not for everyone
2. Masternode Running on a Private Network
You can also install these masternodes on other cryptocurrencies that support the same consensus algorithm.
A masternode is a type of network node that performs specific tasks. It typically requires an initial investment of coins to set up.
DASH is a digital currency that enables people to send private messages without requiring a central authority or a bank account. To set up a masternode, users need to have 1,000 DASH.
Despite the cost of owning a DASH masternode, there are several other options out there for individuals who are just starting.
Masternodes with 10,000 PIVX can be operated with only $15,000 worth of PIVX of which a holder can expect an annual return of 10%.
3. Cryptocurrency Interest-Bearing Accounts
There is a new method out there that can generate crypto passive income using cryptocurrency. It is called interest-bearing accounts.
For digital asset holders, BlockFi’s interest account is an excellent way to earn a steady income. BlockFi offers an annual yield of 6.2 percent. To qualify, customers need to deposit 1 BTC or 25 ETH.
Celsius is a decentralized financial platform that enables users to earn interest payments on their coins deposited on its platform. Its weekly payouts are as high as 13.30%.
A cryptocurrency interest account is a great way to earn regular income. It can be used to fund other expenses.
4. Lending Bitcoins Between Peers
Crypto lending is a way to generate crypto passive income while still having the opportunity to earn a higher rate of interest.
You can also lend cryptocurrency to individuals and companies wanting to raise capital through peer-to-peer platforms.
Another example is BTCPop, which enables individuals to get involved in the digital assets market by providing them with a loan. Unlike traditional lenders, it uses a reputation system to verify the identities of its customers.
You must understand that cryptocurrency loans carry risk and that you should diversify your portfolio to avoid getting into trouble.
If you are comfortable with the concept of peer-to-peer lending, cryptos can be a great way to earn passive income.
5. Lending of Funds to Margin Traders
If you’re a cryptocurrency investor and are worried about the high risk of taking on a peer-to-peer loan, you can easily borrow cryptocurrency from leading digital asset exchanges.
On Bitfinex, you can lend fiat and cryptocurrency to traders who are borrowing to fund their leveraged transactions. With this feature, you will receive a daily interest rate that is proportional to the amount borrowed.
Since cryptocurrency is an excellent form of passive income, it is also an excellent way to earn money on exchanges. However, it should be noted that there is a risk associated with storing crypto assets on exchanges, as they are prone to hacking.
6. Mining on the Cloud
There are many ways to generate crypto passive income, but perhaps the most common method is cloud mining. This is where you earn passive income by taking advantage of the computing power of your cloud.
Cloud mining is a type of decentralized computing service that enables individuals to earn regular income from cryptocurrency mining. It works by renting digital currency mining hardware at a special price.
Despite the hype, cloud mining is not the best option for investors. It can take a long time to recoup its initial investment, and the volatility of the digital assets can make it hard to sustain profitable mining.
Cloud mining is a risky investment. It can be very difficult to mine cryptocurrency due to the volatility of the prices and the difficulty in mining.
Due to the nature of the cloud mining industry, it has been prone to various scams in the past. This is why it is very important for investors to thoroughly research before investing in a cloud mining platform.
7. Setting up a Lightning Network node
Aside from holding cryptocurrencies, you can also earn passive income by operating a lightning network node.
The Lightning Network is an off-chain payment system that enables faster and cheaper transactions. Its unique characteristics make it an ideal choice for businesses wanting to transact without the need for a blockchain.
Due to the rise of digital currencies, many people are asking about their capabilities. Can it handle the immense amount of transactions that happen daily?
Additionally, users can earn passive income by running a Lightning node. By creating payment channels, they can process transactions efficiently over the Lightning Network.
Some people might have a hard time running a Lightning Network Node due to their technical skills. Aside from that, the rewards are only as good as the adoption of the network.
8. Lending by DeFi
Aside from using crypto, another new method is to borrow money from a bank and use it for making passive income. This method is usually referred to as DeFi lending.
The DeFi ecosystem is an autonomous financial platform that operates without central administration. Its decentralized nature enables it to provide financial services without requiring any intervention from a third party.
According to Defi Pulse, the total value locked in DeFi protocols is currently $45.01 billion.
DeFi lending is an open-source platform that enables users to list their coins for a loan. It is a great alternative to traditional loan platforms. Due to its transparency and open nature, it has become very popular.
On the Compound platform, holders of tokens can vote on various technical and protocol updates. This is also beneficial for token holders as it allows them to participate in decisions regarding the platform’s future.
Despite the hype, DeFi lending is still considered a risky venture. During the recent boom of 2020, many protocol hacks have been carried out on less-established platforms.
9. Yield Farming Methodology
Aside from traditional loan products, the DeFi market also offers other ways to earn income. One of these is through the yield farming method.
Yield farming is a type of digital asset exchange where you earn additional income by holding digital tokens in a trading or lending pool.
PancakeSwap is a blockchain-powered yield farm that accepts cryptocurrency as its payment method. To participate in the farm, you need to deposit two tokens into a pool and earn a token called CAKE.
A yield farming enterprise is very risky and cannot be suitable for everyone. This is why investors must have a good tolerance for risk.
10. Investing in Dividend-Paying Tokens
Some digital asset exchange platforms are even issuing their own tokens to provide users with discounted fees and a share of the profits from their platform.
Some coins allow holders to share in the profits of the exchange. For instance, KuCoin holders receive a 50 percent dividend, while the holders of Bibox tokens will get a 45 percent profit.
Dividends are typically paid out to holders of these tokens. They can earn them by holding them on an exchange or using an external wallet.
One of the easiest and most beneficial ways to make money is by holding digital tokens that pay dividends. These are usually issued by exchange and are not linked to any particular institution.
The Cryptocurrency Industry is not offering free lunches. It is important to note that none of the opportunities mentioned above will provide you with a 100% risk-free income.
It is also important to realize that various aspects of crypto mining, investing, and loaning can have varying degrees of risk. This is why it is important to thoroughly understand these facets before committing to any of them. Crypto passive income continues to grow in popularity, but you must know what you are doing.
Once you become comfortable with the various concepts of mining and/or staking, you can start earning real money as soon as possible.