Cryptocurrency is a great way to invest your money in the digital age. Its status as a decentralized currency keeps it free from political influence. Plus, crypto transactions are secure, fast, and digital, which helps maintain records and raise crypto’s appeal as a store of value.
However, no one likes to hold money that does nothing for you. Long gone are the days when we would stash piles of cash under the mattress. Savings accounts and frequent trading earn us money from our money, so why should cryptocurrency be different?
Today, I bring you a list of the many ways to earn passive income from your cryptocurrency. If you’ve recently bought Bitcoin or Ethereum or whatever currency, why not try earning by:
Mining cryptocurrency is not for everyone, but by staking, everyone can get involved. For those who lack the high-powered tech and accept power companies, staking your crypto is the new form of mining. By locking your cryptocurrency and staking it against people mining it, you are essentially funding the operation.
The user provides a proof of stake (PoS) locked against a blockchain to mine fresh cryptocurrency. This gives them a percentage of the newly minted crypto acquired, based on this stake they lay. This is beneficial as it requires fewer hardware resources (just an app), and the outcome is based on what is secured against it. It allows users to stake coins such as:
- NEO (NEO)
- Reddcoin (RDD)
- Ethereum 2.0 (ETH 2.0)
- Polkadot (DOT)
- Komodo (KMD)
Essentially, staking lets you contribute to the production of cryptocurrency without having to invest in expensive computers and sky-high electricity bills. The payout is only a percentage of what is mined but requires no effort on your part. The only downside is that the amount you invest must be locked from use for the duration of the stake (1 month, 3 months, or 6 months). Still, it’s a great way to make coin while you sleep.
Interest-Bearing Crypto Accounts
As the world of cryptocurrency grows, so too do the means of storing and using it. Over the last few years, decentralized finance platforms such as Celsius Network have arisen. The purpose of these platforms is to put our hard-earned cryptocurrency to work, much like how a traditional bank does.
Interest-bearing crypto accounts like BlockFi accept crypto like bitcoin and Ethereum. The idea here is that the user will deposit their currency (a minimum of 1 BTC or 2 ETH, for example) to be held in their accounts. These are loaned to institutional and corporate borrowers on an overcollateralized basis. Profits are made on the return payments from these borrowers, and a percentage is paid to the user.
This is an excellent way to put your crypto to work while keeping it on hand. However, it does limit the types of currencies that can be saved, so you’ll only benefit if you invest with accepted ones.
Set up a Master Node
A master node is a major part of a blockchain, responsible for verifying new blocks without creating them. They require quite a larger investment to set up but are guaranteed to present a return to investors.
Running a master node is similar to providing a PoS, but it belongs to the investor. If you have the crypto and knowledge required to set one up, you can earn a percentage of the rewards earned by the block. While it can seem a little less worth it compared to the initial setup costs, it does require less crypto to run than a regular mining operation.
DASH was the first currency to set up a master node. A DASH master node can currently be set up by locking 1,000 DASH and offering an ROI of 6.45%. This allows your crypto to earn passively and earn you a degree of input in the company’s future. It also allows for the investor to have a say in the project’s governance decisions.
Peer-to-Peer Bitcoin Lending
If you have ever fancied yourself an investor of sorts, then P2P lending may be more your style. Like lending money, bitcoin and other cryptos can be loaned out to other businesses or professional crypto traders.
Lending platforms such as BTCPop exist to bring together potential lenders and borrowers in the digital space. Rather than using a credit score, users are ranked according to reputation. This means that it is up to lenders to appropriately rank borrowers based on their repayments.
Of course, this does come with the usual risks of lending money. There is no insurance that the borrower won’t default on your loan. However, it allows you to investigate all users’ portfolios to help you determine whether they are worth a shot.
Much like stocks for certain high-earning companies, some cryptocurrencies pay dividends. Some companies exchanging digital tokens on the web also offer payouts when you hold them on the issuing exchange. They can also be earned by holding them in an external wallet.
Some currencies that pay out dividends include:
- Komodo (KMD) – 5% payout for holding in Binance Wallet
- KuCoin (KCS) – payout based on how much you hold in MyEtherWallet or any ERC-20 Wallet
- NEO (NEO) – 5.5% payout while staking in NEON Wallet
- NAV Coin (NAV) – up to 5% payout staking in NAV Coin Desktop Wallets
Put simply, earn on your crypto by buying in on certain companies, and you will earn back on your investment! This will come with the usual risks associated with stock exchanging but is an otherwise easy way to earn.
And there you have it – all the ways to earn passively from your crypto investment. Now you don’t have to wait for the best opportunity to sell your cryptocurrencies. All you have to do is choose your method, do a little homework, and sit back as your crypto does the money-making work for you.