Let’s face it. All of us could do with more income. Our goals and aspirations may differ in specifics, but most of them involve some degree of financial stability and a healthy liquidity cushion. But to do that, you need to increase your wealth. Investment and trading over the stock exchange is a well-known way to make money.
However, investing in financial instruments like stocks, bonds, futures, and others also involves an investment of time and effort. You need to do your homework, meaning you’ll need to put in the grunt work to research the companies you want to invest in. You may also need to wait for several years for the investment to mature.
However, in both cases, there is no real guarantee of a reliable supplementary income. But what if, instead of simply investing in stocks or bonds, you tried other alternatives such as cryptocurrency? And what if you could be making money with crypto passively, even when say, you’re talking to a rep on the Spectrum mobile phone number for an upgraded plan? you’re Intrigued now, right? Read on to learn how to generate passive income by investing in crypto.
Earning Passively with Crypto
Investing money always carries an inherent risk of loss. Even the most experienced investors can see a loss on their investments from time to time. What helps them survive is diversifying their investment. Meaning they have invested in various modes and forms of return. That way, even if one investment backfires, the investor still has other streams of income that remain intact. This is exactly the kind of mindset you want to bring to your crypto-based passive income. You can earn ongoing income the same way you would earn interest or return on financial investment. Depending on how familiar you are with cryptocurrency and blockchain, you may require very little effort to set them up. Maintaining these income sources will take even less effort. Here are a few crypto-income models to look at:
Old-School Crypto Mining
Crypto mining was the first model that emerged in the crypto-ecosystem. Essentially, it involves the use of computer processing power in securing a blockchain network. Once secured, the network will earn you a reward, usually in the shape of cryptocurrency. With enough computing power and resources at your disposal, you could automate passive income generation. This is usually how crypto-mining farms work.
In the early days of the Crypto-Rush, the everyday desktop CPU could get the job done fairly easily. However, as networks became more congested, people had to shift over to the GPU units you see in modern gaming PCs. In terms of processing power, a GPU is far more powerful than a home desktop CPU. An entire sub-niche called ASICs has emerged, with manufacturers building processing units that are tailor-made for mining. It is not the easiest or most efficient way to generate passive income, but you don’t need an existing cryptocurrency holding to use this model.
Peer-to-Peer Crypto Lending
The world of crypto is no stranger to P2P platforms. One of the types that you can use to generate passive income over time is the P2P lending platform. These platforms function in a way similar to a savings account. You lock up your funds in the P2P platform for a given time period. In return, you earn interest on the amount you locked in. The platform will typically fix a rate for you, or you can choose one based on the market. This is usually a long-term investment, but it is fairly easy to execute and start generating a passive income off wealth that would otherwise lose value.
Earn Rewards Through Staking
The staking model is a relatively new entrant in the crypto-income generation arena. However, it is very popular for a number of reasons, including the less intense need for crypto or hardware resources. The staking model places your investment in a wallet for a network. Once done, you perform functions for the network and in return, you earn a reward on the stake you invested. The stake implies a holding in the network, and therefore, maintaining it correctly is an incentive for people staking their wealth. There are several algorithms that networks use to achieve consensus, usually the Proof of Stake algorithm.
I’m is an owner of Venostech.com, blogger, Android and technology enthusiast. Individual who are educated in the IT and like to write according my scope.