What every investor wants is an investment yielding income from multiple sources with minor involvement, or a one-time initial involvement. The makeup of the crypto sphere is beyond the (active) business of day-to-day trading of coins. Here, we take a look at various passive earning opportunities in crypto that bring you income even when sleeping!
Running a masternode
Masternodes were made popular by Dash. Masternodes are servers running 24/7, a complete copy of the blockchain with a specific amount of coins as collateral. Running a masternode of a particular network requires you to hold a large number of cryptocurrencies of the network, which makes it expensive to start. In return, you receive a portion of the block’s profits. Another associated cost of running a masternode is purchasing the requisite equipment. Masternodes perform several duties for the blockchain network such as instant send, record-keeping, participation in the consensus process (voting and other decision making), and so on. The difficult side of masternodes is the high requirement for technical knowledge, fees for hosting a server are high, the risks of being hacked, electricity bills, etc. On the bright side, it has a higher rate of return than proof of stake mining. Be careful, as not all coins are worth buying and running a masternode on.
Proof of stake mining involves buying cryptocurrencies on a block in a wallet and holding onto them for a period of time, making sure they are online. Instead of mining via a server through hardware, cryptocurrencies using blockchain are stored in a staking wallet. In this model, the higher the amount of money you stake, the higher your chances of gaining higher returns. The positive side of this source of crypto passive income is that you can stop staking and sell your coins at any time, they don’t depreciate. Some good coins for staking include: NEO, Decred and NavCoin.
ICOs (Initial Coin Offering)
A digital version of IPOs (Initial Public Offering), ICOs, a type of crowdfunding, are now the most popular fundraising model for new ventures. Mastercoin, which raised 600k USD in August 2013, was the first. Ethereum, which raised 18.4 million USD in June 2014, became the second. Here, you can take part by purchasing the new tokens from the ICO team, in exchange for your investment. Usually, the value of these tokens is expected to appreciate, especially when they become listed on exchanges after a successful ICO. This is exactly the reason why some governments have chosen to classify ICO tokens as securities.
Just like the traditional financial institutions, some crypto exchanges give dividends to holders of their currencies. The currencies are kept in a wallet designed exclusively for this purpose and, at a designated time, give dividends to the holders according to the amount they hold. The dividends represent a portion of the profit earned within a given timeframe. It is a way of encouraging holders to hold their digital currency instead of trading them. Examples of such cryptos are NEO, KUCOIN, NEBLIO etc.
Holding, popularly spelled as HODL, came about from the story told of a period when the crypto market went dangerously down with traders giving up hopes. A writer then advised traders not to sell their coins as he believed that things will stabilize soon, he severally spelled the word ‘HOLD’ as ‘HODL’. To hodl, buy a good coin whose use cases have proven value which will increase over time, hodl it for a period of eight months to two years and take out your principal profit generated in the period.
Lending is an old means of earning money, it is one of the earliest forms of earning profit. Applicable in crypto business, you can lend your currencies to people who would use it for exchanges or business and they pay you back with interest. There are some companies who are into the lending business. One example is Bitbond.
Last to be discussed on crypto passive earning is blogging. Of course, this might sound odd to some people, but very familiar to those in the trade. Blogging and writing is now more or less a good paying career. Either you write for sites that pay in cryptocurrency, or you run your own blog and get paid in crypto for ads, sponsored posts, and features.