Despite people getting more familiarized with digital currencies in recent years, the crypto industry remains a highly complex and intricate space to navigate, and there are still many aspects that even longtime crypto enthusiasts struggle to understand. Learning how to open a cryptocurrency trading account or how to buy Bitcoin is easy even for the average individual, but figuring out how to leverage crypto’s growing popularity and power to generate passive income and build wealth might not be as simple and straightforward.
If the lack of knowledge and guidance has stopped you from exploring crypto’s potential as an avenue for passive income in the past, it’s time to break these boundaries and discover the money-making opportunities that await in the crypto realm. Obviously, this doesn’t mean you should immediately jump on board and start testing out all these methods, given the risks associated with engaging in crypto-related activities. But it’s definitely worth knowing and exploring your option, so you can decide if earning passive income through crypto is something that might work for you.
Mining
Mining remains one of the most popular methods of earning crypto, despite being harshly criticized for the vast amount of energy it consumes. This process stands behind most crypto projects, such as Bitcoin, Dogecoin or Litecoin and relies on a proof-of-work (PoW) consensus mechanism. Mining allows network participants who are referred to as miners to compete against each other in order to solve complicated mathematical puzzles and thus verify and validate new transactions that are then added to the blockchain. The first miner to solve the problem is rewarded with a predetermined amount of freshly minted coins.
Keep in mind that crypto mining requires some technical knowledge and specialized equipment, so if you happen to be tech-minded and you don’t mind investing in specific hardware, mining might be a viable option for you. However, if you find the process a bit too complicated for your liking, cloud mining provides a great alternative. Unlike the conventional method, cloud mining doesn’t require complicated hardware as it relies on renting computing resources from a remote data center via the Internet. So, all you have to do is open an account and pay a fixed fee, and you can avoid all the hassle and start mining right away.
Staking
As you may already know, PoW mining isn’t the only way one can earn crypto. Other blockchain consensus protocols exist and proof-of-stake (PoS) serves as a popular alternative to PoW, being one of the most widely adopted mechanisms underlying crypto projects, used by Ethereum and many other altcoins. PoS differs greatly from PoW in that it utilizes a process called staking to reach consensus, validate transactions and attach new blocks to the chain.
The protocol requires users to stake a certain number of coins in order to activate the validation software and thus be eligible for proposing new blocks and verifying transactions. After multiple validators verify a block and confirm its accuracy, the block is closed and the validators are rewarded with crypto. Staking is a lot less complicated than mining and can therefore be a more appealing method to earn crypto passively.
Crypto games
Crypto games have been gaining a lot of popularity recently due to their innovative features. Unlike conventional video games, crypto games provide users with true ownership of the assets they acquire while playing. Apart from that, their decentralized infrastructure enables players to use their assets across multiple platforms, ensuring a much more immersive and interactive gaming experience.
But probably the biggest draw for crypto games is the possibility of earning crypto while playing. These play-to-earn (P2E) games offer rewards in the form of crypto, NFTs, and other digital assets to players who engage in different in-game activities, such as completing a mission, moving to another level, or simply participating in the game. These assets can then be traded on marketplaces and exchange platforms for fiat money, thus turning into a great source of passive income.
Affiliate programs
Affiliate programs are a very common method of earning passive income online and many companies utilize it as a way to outsource part of their sales process. Under this arrangement, affiliates receive a commission for promoting certain products or services for a company via different marketing tactics. The same principle applies to crypto-related services and products.
There are plenty of exchanges and crypto companies offering affiliate programs that anyone can take advantage of by following a few simple steps. First, you have to sign up for the program and open an account. After getting accepted, you’ll receive a link that you can share with as many people as possible via different channels. The more people that use the link to sign up or make a purchase, the more you’ll earn. This will keep the money coming in without putting any effort into it.
Yield farming
Yield farming is a bit more complex than the previous methods, so it’s something you should only consider if you’re willing to dig a bit deeper into the ever-expanding DeFi realm and do your due diligence in this respect. To put it simply, yield farming allows you to use your crypto to earn rewards in a similar manner that banks use their funds to make money.
This means you’ll have to lock your crypto assets in a smart contract-based liquidity pool alongside other crypto users. The coins in the pool will then be lent to other users who will be paying fees and interest for this service. Therefore, you will receive a percentage of the interest and fees coming from borrowers.
Final thoughts
If you want to supplement your regular revenue but you don’t have much time on your hands, crypto provides numerous possibilities to earn passive income. However, keep in mind that digital currencies are highly volatile assets, and crypto scams are also on the rise, so make sure you analyze your options carefully before making a decision and take the necessary precautions to keep your funds safe.
Disclosure: If we like a product or service, we might refer them to our readers via an affiliate link, which means we may receive a referral commission from the sale if you buy the product that we recommended, read more about that in our affiliate disclosure.
Read More: World News | Entertainment News | Celeb News
Tech Follows
