By Jacob Maslow — Branded Content
Cryptocurrency is a digital currency designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units and verify the transfer of assets. Cryptocurrencies use decentralized control, meaning there is no central authority to issue new currency and verify transactions. Instead, cryptocurrencies utilize a “blockchain”, a public distributed ledger that records all transactions. It’s important to note that cryptocurrencies are not the only application of blockchain technology. Blockchain can be used for several different purposes other than exchanging digital coins.
Passive Income With Cryptocurrency
Investing in cryptocurrency isn’t just about acquiring new assets, it’s also about earning passive income. By definition, “passive income” is money that automatically arrives in the investor’s bank account while requiring little to no involvement once it’s there.
Lending
One of the best ways to earn passive income with crypto is to lend. It is fairly easy to find a P2P (peer-to-peer) lending service that allows users to lock their cash to get an interest payment later. Sometimes, the interest rate is variable, and sometimes, it is fixed, it all depends on the platform you use and the current market rates.
Platforms that offer margin trading usually have this option available. However, those in for the long-term should think about this type of investment since it requires minimal effort and can grow the user’s portfolio.
The problem with this strategy is that it requires a decent amount of capital to work. If an investor wants $500, they must look for loans or offers that sum up to that number. If the platform’s interest rate is 12% and the time frame is one year, you will get back $624 at the end of the term.
A safer option would be to lend out small amounts, let’s say $50. This way, there won’t be as much room for loss as lending higher amounts like $1,000 or more (although those offers exist as well).
Short-term trading
This is another way to generate income with cryptocurrencies. It requires some experience but allows you to trade without having the actual assets in your possession. However, this type of trading relies on margin and is very risky since you can lose all your money if one wrong step is taken. Therefore, it is usually reserved for those with enough experience and even clients with a minimum capital requirement.
The safest option would be to use CFDs (contracts for differences). With this kind of instrument, users speculate on the price difference between two crypto assets and don’t need to own them or handle any risks involved in their storage or transfer. Of course, short-term trading requires some learning; there are plenty of YouTube videos in the matter.
Cloud Mining
As you probably already know, the mining process requires computational power that solves mathematical algorithms for a reward. As a result, the mining technique is perhaps the most popular way of producing passive income in the industry, even though it doesn’t reward every time.
A growing trend is to invest in mining via cloud mining services. You simply pay your way in and rent a percent of the hash rate of the provider. You get a proportional amount back as a reward when your contract is over. You can find out more here: Truely.com. Mining is such a hot topic now that even the government gets involved. Washington recently introduced a bill to legalize it as an economic activity.
Affiliate Program
You can easily find crypto companies that will compensate you for enhancing the network in any type of way. This is where referrals, affiliate links, and discounts play a considerable role. The goal is to find people who are willing to join, invite them through your link, and get a certain amount of currency as a reward.
If you develop a decent method for inviting people, you can make a fortune through referrals. This is, of course, easier for those with a big following on social media. However, everyone can join the affiliate program, and you should take your chances.
Masternodes
To put it simply, a master node is a decentralized server that has different capabilities than other nodes. When we say decentralized, we refer to a server in a decentralized network. Bear in mind that you need a lot of technical knowledge and a significant upfront expenditure to set up a master node.
In addition, these projects are known for being very unpredictable. This is why it is essential to do your research before deciding on this solution. Finally, the stake becomes illiquid for specific master nodes due to the very high holding requirement.
Airdrops and Forks
All you need for an airdrop is an active wallet at the moment when it happens. Occasionally, exchanges produce airdrop for users, and you might be one of the lucky ones. However, it is important to mention that there’s no need to exchange private keys to receive an airdrop. If you notice this, you can be sure that it is a fraud.
A simple strategy could be utilizing a hard fork. Then, all you have to do is keep the split coins when the hard fork happens. You should then sell them after a while.
So with all that, we hope you found this list interesting and see how multiple options can bring you profit.
Photo Courtesy // Jacob Maslow
