The emergence of cryptocurrency has given birth to a digital economy where you can earn decent passive income via the internet. If you have a working computer and a stable internet, you can start right away! Keep reading to discover seven ways to earn passive income with cryptocurrency.
1) Cloud Mining
This is one of the most popular methods for earning through cryptocurrency. If you do not have enough money to own currency mining hardware, you can rent them from cloud mining operators on a daily maintenance fee basis.
Before you jump right into cloud mining, there are a few things to consider. You have to realize that the payback period post-mining may not start before a year, and it is very possible for the value of the coins to fluctuate significantly. If things go wrong, the value can even drop to the point where it is unprofitable, and the operator will cancel the contract.
There is also an alarming number of scams operated by these companies. Therefore, before you invest, conduct thorough research on cloud mining service providers to get a good price. If you feel that as a starter with enough capital and you do not want to take any risks, invest in tech royalties based on blockchain and cryptocurrency.
Unlike dividends, the annual returns in this tech royalty are usually in the 3 digit percentages, with only a reasonable amount to pay to invest. For more details, look at this article on earning royalties from NoBSIMReviews.
2) Proof-Of-Stake (PoS) Coins
Instead of securing the blockchain through computing power like Proof-Of-Work networks, PoS cryptocurrencies use the users that stake the coin to secure its network and process the transaction. In return, these users receive newly-minted cryptocurrency.
By staking popular coins like NEO or Komodo, holders can earn up to 5% interest annually. This is a safer investment for crypto-assets and increases the potential return of the investment portfolios. However, this is somewhat time-consuming and often requires a professional who is familiar with the type of cryptocurrency to invest in and how to stake its coins.
3) Set Up Masternodes
Along with other requirements, a group of people has to invest a hefty amount on staked coins to set up masternodes. Initially launched by DASH, setting up a DASH masternode almost requires locking up 1000 DASHs, worth almost $120,000 today. As a return, the operator receives 6.45% on investment.
If you are disheartened seeing the investment amount, there is still hope. Masternodes.online states that there are almost over 470 types of masternode coins that exist and are way cheaper than DASH with a very impressive return on investment.
4) Invest in Crypto Accounts That Generate Interest
You can deposit your Bitcoins or Ethers in these accounts to earn a decent annual yield. Some of these companies like Blockfi that provide such services yield the returns by lending these deposits to corporate or institutional borrowers that provide collaterals worth more than the potential losses. In the form of interest payments, you are earning passive income.
5) Be A Crypto Lender
Lending platforms like Bitbond or ETHLend allow lenders to help small businesses or proprietors who need funding. Once you choose who you want to lend to, all you have to do is deposit your coins into the account and invest them on the loan. Your investment starts once the payment is fully done.
You are repaid throughout the loan period little by little. In Bitbond, for example, you can start with as little as $5 and earn approximately a 13% expected return. But with loans, there is always a risk of the borrower’s default. Before choosing to invest, diversify your portfolio instead of concentrating on one lender and go through all the loan proposals thoroughly.
6) Lend Margin Traders
If peer to peer crypto lending is not your thing, you can lend to margin traders through popular digital asset exchanges like BitMex or Poloniex.
By lending to margin traders, you can earn daily interest at the minimum rate of 0.0224%. Although this seems like a very small amount, the total monthly accumulation is quite lucrative for crypto lenders. However, this is still a form of a loan, and thus there is a substantial risk, albeit a different one.
Cryptoassets on exchanges are the prime targets for hackers, of which Bitfinex was a victim. Therefore, you will have to look for ways to secure your crypto assets from hackers.
7) Holding Exchange-Issued Tokens
This is the easiest way to earn passive income through cryptocurrencies. When you are buying and holding dividend-paying tokens from selective digital asset exchanges, you are availing yourself to a share of the exchanges’ profits. All you need is an external wallet to hold these tokens in. The more you hold, the more profit you will be able to earn from it.
8) Good Old Affiliate Programs
As part of their strategy to acquire more users, some crypto businesses may offer you rewards for introducing new users to their platform. Affiliate links or other referral options can be used to introduce new users to the crypto business as well as to track how many of your invites have been converted to customers for the crypto business.
To do this, you can utilize your social media following or other networks and make some money every time one of your referral or affiliate links work. That being said, it’s important that you research the credibility of the crypto business and its affiliate program so that you don’t promote any low-quality or bad investments to your friends.
Before you choose to invest in any of the cryptocurrency-based options, keep in mind that all of them bear a significant risk that will have to be carried at your expense. Be it mining, staking, or even lending, they all have significant risks in one or more ways.
If you are a newbie, first, you will have to figure out how to keep your holdings and private keys safe and secure before you get adventurous and invest in digital asset exchanges. Start little by little, and once you are comfortable, you will be earning passive income in no time.