7 Ways you can make a passive crypto income in the decentralized market
One of the first growing financial markets is the blockchain and cryptocurrency market. Since the launch of bitcoin, twelve years ago, the cryptocurrency market has seen significant changes that set it apart from your traditional markets. With each new day, the community in this market keeps finding new ways to keep everyone engaged. One strategy that has massively gained popularity is earning money through passive income.
The concept of passive income has dominated both the traditional and crypto markets. Passive income allows people to participate in the market by applying minimal skills. This allows those with little knowledge of the market or item in question to engage in the space.
While blockchain and cryptocurrencies are relatively new, people have found different ways to engage in the market for a profit. If you are looking for ways to earn money in this market, here are some ideas you might consider:
This among the most popular passive income methods in the cryptocurrency community. So what is cloud mining?
Cloud mining refers to the renting of mining hardware from specialized mining firms to mine cryptocurrencies. This type of mining allows users to earn an income from mining crypto without having to buy expensive mining equipment. To lend their equipment, firms usually ask for a maintenance fee from the miners. Cloud mining operators will have different rates.
Before cloud mining was introduced, miners used powerful Graphics Processing Units (GPUs) and eventually moved to Application-Specific Integrated Circuits (ASICs) –
Notably, despite its popularity, cloud mining poses many risks. For instance, the payback process can take a year or more. During this time, the value of a coin could have dropped massively to a point it is no longer profitable. In such cases, the operator usually cancels the cloud-mining contract.
Another critical risk to note is the increased number of illegal activities, more so scams. Many new companies come in with lucrative offers that end up conducting an n exist scheme leaving investors in turmoil.
Staking refers to holding cryptocurrencies in a secure wallet. During the holding period, the holder can perform various tasks, including validation of transactions to a staking pool to receive staking rewards. You can earn an interest of about 5 percent per annum. This process makes use of Proof of stake (PoS) as its consensus algorithm.
Unlike mining, which requires a lot of resources, staking requires technical knowledge on the blockchain, especially the cryptocurrency projects you want to work on. This method of passive earning is common among long-term holders who make use of this process to build their investment portfolios
Peer to peer lending
Lending is another excellent way of earning passive income, especially if you have cryptocurrency just sitting on your wallet. This is slowly catching up in decentralized finance (DeFi). This method is standard with long-term holders but can also be used by short-term holders. There are different ways one could lend their crypto in return for a little interest. One could give their crypto to established lending companies or giving their crypto direct to the individual or business.
To lend a lending firm, a crypto holder locks up their funds with a peer-to-peer lending platform. This is done for a given period, after which the holder gets interested in their money. Notably, many companies have a fixed interest rate for the lending process. However, others allow holders to set the rates based on the current market rates. Some companies might offer daily payments while others, delivering small payments throughout the loan period.
In the case of individuals, the older looks for individuals or businesses seeking cryptocurrencies to fund their projects. The holder evaluated the proposals and then selected the candidate they feel comfortable and reliable.
Despite being among the easiest passive income methods, this strategy poses significant risks to the crypto holder (business person). While lending directly to the individuals, the crypto holder stances to lose their money in case the borrower fails to pay.
While this might be a move by the project developers to get more users, affiliate programs can be quite lucrative if you know your way around social media, or you happen to be a great salesperson. Affiliate programs work by giving you, the referee, a small commission on every user you bring to the project.
In case you have a large following on any social media platform, you get paid by companies to promote their projects to your followers or friends.
Some of the best crypto debit card programs are Coinbase, BlockCard, and MCO Crypto Card
Forks, buyback and airdrops
While forks and airdrops are usually occasional events, you can take advantage of when they happen to earn some money.
Airdrops are quite simple. All one needs is to have a digital wallet to receive the fund. In simple terms, Airdrops are occasional token give always. However, be careful during these events as many have ended up losing their funds to scammers who asked for dupes crypto holder into sending them their private keys for an airdrop.
You might want to investigate a site like Airdrops.io
Buybacks refer to the process of buying cryptocurrencies meant to be destroyed or ‘burnt’ afterward. You can sell your coins and earn money in turn
A hard fork is the process by which chain breaks into two chains following disagreement by miners. The fork allows the token holder to have a coin of both chains. This means you get additional money, a double gain on your initial investments.
Holding dividend paying tokens
Another easy way to earn money is to invest in dividend-paying currencies. Exchanges mainly issue the Dividend-paying tokens. These include KuCoin, BridgeCoin, Bibox, and many more. To earn from this passive method, you will be required to hold the token or stake them. The more tokens you own, the higher your earnings.
Running lightning nodes
Blockchain has two layers namely, the first and second layers. The second layer forms the Lightning Network. This layer is an off-chain micropayment network that can be used for fast transactions.
The owner of a lighting node can quickly process many transactions. This is because the nodes provide liquidity and increase the capacity of the Lightning Network by locking up cryptocurrencies into payment channels. As the owner, you will be able to collect the fees made by running the channels..