4 Ways to Earn Passive Income with Cryptocurrencies
The terms “passive income” and “cryptocurrencies” are likely hardly ever mentioned in the same sentence. With a highly volatile market and rapidly fluctuating valuations, the prospect of building a passive source of income with cryptocurrencies seems insane. Impossible even.
However, you would do well to remember that just a decade ago, the idea of earning and spending digital currencies would have sounded equally crazy. The fact of the matter is that it’s actually quite possible for anyone to earn passive income from their crypto investments. This is not exactly a fool-proof guide, but it should set you on the right path.
Before we get started, always remember to make use of a reputable e-wallet, like Tezro.com, that provides security and supports a variety of cryptos. So, let’s take a look at how you can make your crypto assets work for you.
The most obvious way to earn income passively from cryptos is by mining it. In the early days, crypto enthusiasts were able to rely on the power of their computer’s CPU (central processing units) to verify transactions i.e. mine.
Mining is the oldest and most straightforward way to earn both passive income with cryptocurrency. However, as mining operations became increasingly complex, more and more powerful hardware was called for. Eventually culminating into the massive mining farms that have begun sprouting all over. Unless you have access to plentiful, cheap electricity, mining is no longer possible for small-time entrepreneurs.
Alternatively, instead of mining Bitcoins, you can also consider switching to less known coins with a lower hash rate. This requires less computing power and can be easily done. However, it is not without its share of risks as these coins may lose their value overnight or be hindered by a sudden change in regulations.
If you do choose to start mining, you’ll want to invest in some solid hardware and maybe read up on the technical intricacies of mining.
One of the more common ways to earn a passive income from cryptocurrencies is staking. To the uninitiated, staking is the act of holding funds in a cryptocurrency wallet for a period of time. Through this, a protocol randomly selects coins to validate a block chain transaction for a reward.Hence, you’ll be able to gradually increase your cryptocurrency holdings by simply depositing your funds in a wallet.
It should also be noted however that some exchanges may artificially inflate the projected returns on staking — something which results in your receiving far less coins than initially expected.
3. Lending your cryptocurrencies
Yes, you’ve heard that right. It is quite possible for you to lend out your cryptocurrencies in exchange for interest payments.
With so many peer-to-peer lending platforms on the market, you can pick and choose the platform that works for you. By parking your cryptos with them, you’ll be able to earn a steady stream of income. Do take care when lending out your cryptos and thoroughly research the lending platform before you commit.
4. Airdrops or Hard forks
Airdrops are defined as the distribution of new virtual assets to the public. These assets are distributed to individuals who hold the related crypto token or have ownership of a specific wallet address at the time of the airdrop.
Literally no effort is required on your part and the distributed crypto will be deposited into your e-wallet. Always remember that the sharing of private keys during an airdrop is a sure sign of a scam.
Sometimes cryptocurrencies split for reasons of their own i.e. Bitcoin and BitcoinCash — which resolves as a hard fork. When a hard fork occurs, you’ll merely be required to hold the forked coins in your wallet during the date of the hard fork. From here, you’ll be awarded with additional cryptos.
Earning passive incomes with cryptocurrencies is quite a simple affair. Always remember to perform your own research and take steps to stay safe.
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