6 Ways to earn passive income with cryptocurrency
Tags: Cryptocurrency, Crypto, Bitcoin, Investing

6 Ways to earn passive income with cryptocurrency

“If you don’t find a way to make money while you sleep, you will work until you die.” — — — Warren Buffett

There are ways in traditional capital markets to earn passive incomes. For a new asset market like cryptocurrency, the path of earning profit is still not notable by the public. It is more than doing day-trade in the market or investing in ICO. Mastering the art of earning passive income with cryptocurrency is a complex lesson. Here are six ways to do it

JUST HODL!

“HODL” is the most famous term to use in the crypto world and it is the most easiest way to invest in crypto. If you are a bad trader and you have no time to manage your crypto portfolio. “HODL” will be a good fit for you. Bitcoin and other altcoins are well known as their volatility nature. They can be 10x or even 1000x in return. The preference of earning such a huge reward is patience and not everyone can HOLD ON for DEAR LIFE.

Crypto Mining

Mining is the core mechanism to maintain the system in cryptocurrency. The proof of work system plays as a major role for many mechanisms of cryptocurrency. As a miner, you are reward with certain amount of cryptocurrency as contribution of mining. Each time a cryptocurrency transaction is made, a cryptocurrency miner is responsible for ensuring the authenticity of information and updating the blockchain network. The mining process itself involves competing with other miners to solve complicated mathematical problems with cryptographic hash functions that are associated with a block containing the transaction data. The reward of mining is fluctuate with the price of the cryptocurrency and the difficulty in mining.

Staking

Proof of stake is a special way in cryptocurrency. Instead of mining, staking is a way that new blocks in the blockchain is created by holding the cryptocurrency in a staking wallet. The case is just like rewarding the biggest stakeholders in the listing company, storing more cryptocurrency in the stake wallet will reward more. Some coins require a 24/7 connection and power-source, while others require holding coins in a staking wallet. For example, NEO has a low barrier to entry, you can literally hold NEO in a specify wallet and earn gas. Meanwhile, proof-of-stake provides liquidity for the investor. The cryptocurrency you buy to stake can be sold at any time.

Masternodes

Masternode runs in a similar way to proof of stake. You store the cryptocurrency in your wallet and you run your own server to support the network. You will be reward by that type of cryptocurrency for running the masternode. However, the downside of running masternodes are often very expensive to get started. For example, a Dash masternode will require 1000 DASH as an entry price. At today’s prices, that’s close to 200k USD. It is obviously not an affordable price for everyone.

Airdrop

Airdrop is the crypto giveaway. Projects or ICO will give away a small amount of free tokens to the early holders. The purpose is to is to spread the word about their project. Typically, new projects will provide free tokens upon community involvement or signing-up and providing some basic personal information. The other channel for airdrop is done by the exchange. The ICO will take a partnership with the exchange and the giveaway will distribute to the exchange users. Usually the giveaway of free token is always small in value but if you hold for an extend period of time, the giveaway token may worth a significant amount of money.

Referral program

The referral program is another form of Airdrops. Many popular exchanges such as Bitinfi, offer referral programs that pay you to draw new customers or rewarding existing users in their exchanges. Users are given a referral code and they can invite their friends to join the exchange. Every trade they made will give a referral commission to the existing users.

The above methods are only a slack in the crypto world. As the technology of blockchain and cryptocurrency are still evolving, new ideas come up every day. There are many ways for passive income waiting for explore!