Passive earnings on cryptocurrency is a process of generating income with a minimum number of actions. Of course, to start receiving such income, you first need to either work hard or invest, and only then enjoy the flow of money. If we draw an analogy with real life, you first earned money for an apartment, and then you began to rent it out and receive passive income. This is not achieved overnight – the same can be said for making money on cryptocurrencies.
The ideal passive earning model is when you get paid over and over again for a job that you once did. This is how investments work, for example. On the Profinvestment.com website, we will consider the potential of such types of income in the crypto world.
- 1 Ways of passive earnings
- 2 What is a landing page ?
- 3 Пассивный доход от стекинга
- 4 Investing in cryptocurrency
- 5 Mining
- 6 Passive earning on masternodes
- 7 Output
Ways of passive earnings
So, in what ways can you make your money work for you:
- HODL (investment). The method involves buying cryptocurrency at a lower price and subsequently selling it at a higher price. For the profit to be tangible, a strong growth in the exchange rate is required, as well as significant investments. This is how many Bitcoin investors got rich, who purchased several coins at the start of development, and sold when the price of one coin was estimated at thousands of dollars.
- Mining. A method that was previously very popular and relevant, but today it has too high an entry threshold. Home mining is gradually fading away, this prerogative goes to corporations. Nevertheless, we will definitely consider this method too.
- Masternodes. Masternode is a blockchain network node responsible for processing transactions or performing any special tasks. The owner of the masternode receives passive income for the operations performed. But in order to launch a masternode on your own, you will need significant cash investments, providing a dedicated IP and other conditions.
- Staking. In this case, the user buys a certain amount of cryptocurrency and keeps it in his account, regularly receiving additional funds as a percentage of the available ones. Staking is an integral part of the Proof-of-Stake mechanism that many cryptocurrencies operate on. Some crypto exchanges also provide such a service to their users.
- Landing page. The method is as old as the world – you give your savings to the turnover or the exchange, or directly to other users, and then return them with interest.
Let’s consider the listed methods in more detail and with examples.
What is a landing page ?
Cryptocurrency landing page is an easy way to passively make money on cryptocurrency that you do not plan to use or sell in the near future. It allows you to receive a much greater interest benefit than if you just keep fiat on a deposit with a bank.
The implementation may vary from site to site, but the idea is the same everywhere. The lender gives away his cryptocurrency as collateral for margin trading on the crypto exchange. A borrower who thinks that the price of a currency will rise creates a long position by asking the exchange for additional funds. At the end of the loan term (usually two days, although sometimes longer), the lender gets his money back with interest.
Of course, margin trading is risky, the exchange rate may not go up, but down. But in this case, a guarantee is provided for the lender. In the event of a sharp decline in the exchange rate, the creditor is refunded his entire amount with interest. In addition, on some sites, lending directly to the exchange itself is offered, which is almost completely safe.
Crypto-exchange landing programs
Consider the profitability and conditions of the largest landing platforms for passive earnings of cryptocurrency.
There are two types of deposit on Binance Lending:
- Perpetual deposit. A lower rate (up to 3% per annum), but you can withdraw funds at any time after 24 hours after the subscription.
- Fixed deposit. A higher rate (3-10% per annum), but you can withdraw funds at a profit not earlier and not later than within a specified period of 14 days.
Different types of cryptocurrencies are available (Bitcoin, Ethereum, Tether, and others), and new ones are planned to be added gradually. It is enough to send funds to your Binance Lending account and receive interest: on fixed deposits on the day of maturity, and on indefinite ones daily.
The platform from the WhiteBit cryptocurrency exchange allows you to earn up to 18% on your deposits in 180 days. To do this, you need to choose an investment plan from the proposed ones and click “Invest”. For each individual plan, there is a minimum and maximum deposit, an interest rate (0.3-18%), a period (10-180 days).
You can close the deposit at any time, but if you do not wait for the expiration date, interest will not be charged.
In order to participate in the program, it is enough just to keep funds on the account of the Livecoin exchange, and even the money involved in open orders is taken into account. Earning is carried out according to the staking principle – the developers of a certain coin allocate a certain amount of tokens for ProfitBox, and the exchange distributes them among users.
The following types of assets are supported:
The Bitfinex cryptocurrency exchange has a margin market, which is a complete lending tool. Any verified user can use it. Several dozen different assets are offered for work.
You can offer financing at convenient terms and rates, or use the FRR (Instant Return Rate) feature. When the offer expires, there is an option to renew it.
Advantages and disadvantages of exchange landing pages
✅ Creating an account on an exchange is much easier than opening a bank account, and it can be done anonymously.
✅ The user can track the path of his funds, how they are issued on credit.
✅ The risk factor usually falls on the shoulders of the borrower, and the lender’s money will be returned to him in any case.
✅ The process is automated as much as possible. You can make a deposit and subsequently withdraw income in a couple of clicks.
❌ Despite the fact that the risk in cryptocurrency lending is extremely low, it still exists, and this must be taken into account. It is not recommended to invest too large amounts. You also need to pay attention to the choice of a site with a good reputation.
❌ Some exchanges charge quite a high commission on the loan amount.
Special landing platforms that make it possible to passively earn on cryptocurrency are arranged in a completely different way.
NEXO cryptocurrency lending platform specializes in quick loans, bill payments, eCommerce sponsorship. The NEXO system allows users to take out loans in cryptocurrency or make money on fiat (dollar, euro, pound sterling), giving it away at interest.
A feature that distinguishes NEXO from other landing platforms is that the borrower has the ability to spend the borrowed money through a NEXO credit card. He also has the right to receive a loan to a bank account or split it – partly to a bank account, and part to NEXO.
An investor can earn 8% per annum here by investing fiat funds.
On this platform, users can borrow money secured by Bitcoin, Ethereum GUSD. You can also repay a loan in cryptocurrency or US dollars. On Blockfi, you can make large investments in different markets, which will be supported by the cryptocurrency. The interest rate is around 8.6% per annum.
In the Earn section of this site, it is proposed to earn up to 18% per annum on BTC or other cryptocurrency.
The highest percentage is provided if you invest for a period of 3 months the CRO token (native token of Crypto.com). When investing other coins or for a shorter period, the percentage ranges from 4 to 16.
The platform allows you to quickly earn money without any commissions by giving away cryptocurrency at interest. The Celsius Network divides 80% of its revenue among users in weekly payments. There is an opportunity to earn up to 10% of your investment.
Преимущества и недостатки зарабатывания денег на лендинговых платформах
✅ As a rule, there are no commissions or they are minimal.
✅ The interface and conditions are more thought out compared to exchanges, since platforms specialize in the functionality of the landing page, and do not provide it as an additional service.
✅ Income also often exceeds the exchange rate.
❌ Lots of fraudulent projects. You need to carefully study the reputation and reviews of each platform.
Пассивный доход от стекинга
Proof-of-Stake (PoS) is an energy efficient alternative to Proof-of-Work (PoW). Instead of detecting blocks by mining, PoS works like a lottery, where each coin is a kind of lottery ticket.
Users who own the coin place a bet on a specific amount within the network, keeping the currency in their account and not spending it anywhere. When the platform creates a new block, it randomly selects the wallets with the stakes to check this action. The more funds the wallet has, the more chances it has to be chosen.
Staking is an incentive to invest in a cryptocurrency project and use it regularly.
Криптовалюты для пассивного дохода от стейкинга
To find the right PoS coin, you need to look at ROI. She usually possesses good reliable projects that have already achieved success or are confidently moving towards it. In addition, conditions may vary from project to project. Somewhere there is a minimum bet size, somewhere you can use only specific wallets.
Examples of coins considered relevant for 2019 staking:
✅ NAVCOIN (NAV). The cryptocurrency was launched in 2014 based on Bitcoin and is focused on the confidentiality and privacy of transactions.
✅ Neo (NEO). The blockchain of this project has a GAS token used for staking rewards and transactions. Adding one block to the chain creates 7 GAS tokens.
✅ ARK. An ecosystem designed to communicate between different blockchains. Works on the dPoS principle (with the choice of delegates).
Ставки на Binance
Users are rewarded simply for keeping certain coins on the Binance crypto exchange account. Rewards are calculated and distributed once a month based on how long and how many coins the member held during that month. The site allows you to receive passive earnings on cryptocurrencies of many types.
Преимущества и недостатки зарабатывания денег на стекинге криптовалюты
✅ Less computational cost than PoW.
✅ Rewards are calculated as a percentage based on inflation, which encourages members to hold onto tokens.
✅ The PoS network is more decentralized.
❌ Some projects require a strictly defined minimum rate ratio, which resembles banking intermediation; on the contrary, cryptocurrency should go away from it.
❌ PoS are usually less liquid on exchanges as everyone is holding them instead of selling.
Investing in cryptocurrency
Investing in cryptocurrency is perhaps the most popular way to make passive earnings on cryptocurrency. Interest in it has not faded for several years, especially since every year there are more and more arguments that the crypt has economic potential.
Check out a few tips before turning to cryptocurrency as an investment vehicle:
- Invest only the money, the loss of which will not be critical for you and will not disturb your financial stability. Do not take out a loan to invest, do not get your last nest egg.
- Be mentally prepared to lose up to 60% of your investment at first, and don’t panic if this happens. The crypto market can grow as quickly as it can fall. If you aim strictly for income of 50, 100 or 1000%, then this is more like gambling.
- Research the coin thoroughly before investing in it. This is especially true for newly emerging assets.
- Diversify your investments. The standard scheme is to invest 50% of the funds in Bitcoin, and distribute another 50% between promising altcoins, as well as third-party assets such as stocks.
It is believed that investing should be based on a belief in technology, not a desire for quick money. Approached from this point of view, it will not be difficult to survive the volatility of the market and wait for a really good moment to sell.
This investment option can be offered to you by the Matbi crypto exchanger. Here you can buy Bitcoin, Litecoin, as well as invest in Dash and Zcash. For each cryptocurrency, Matbi has developed its own crypto wallet, so that it is convenient to store cryptocurrency in anticipation of its future growth. The site has a simple, intuitive interface and is suitable for both beginners and advanced users. Matbi has been on the market for over 6 years, so there is no doubt about the reliability of the service. Official site: matbea.com.
Преимущества и недостатки инвестирования в криптовалюту
✅ Potentially high income level.
✅ Helping develop innovative technologies that can change the world.
✅ Convenience, anonymity, low cost of transactions.
❌ High riskiness due to market volatility.
❌ The likelihood of technological errors or hacker hacks.
❌ If you lose your wallet key, you may never access your funds again.
Mining is a type of passive earnings on cryptocurrency, in which new coins are mined as a reward for creating new blocks of transactions and adding them to the blockchain. To create blocks, you need to perform complex calculations, which are handled by special powerful equipment.
Преимущества и недостатки заработка на майнинге криптовалюты
✅ The main motivating factor is money. If you organize the process correctly, you can really make a profit.
✅ The rise of cloud mining. For those who don’t want to go into hardware, cloud mining can be a great option. This is the lease of capacity from specialized companies, on the basis of which income is accrued. It is this option that can now be called passive earnings in its purest form – the user simply invests money in the contract and starts making a profit.
✅ Assistance in the technological development of cryptocurrencies. Miners play a key role in the crypto community, and if they were not there, the value of the coin would drop to zero in one minute.
❌ Now the situation is not the same as in 2011 – for mining you need expensive specialized equipment that consumes a lot of electricity, makes noise and generates heat. Under it, you need to find a room and pay monthly bills that take away a significant percentage of your income.
❌ The difficulty of choosing a cryptocurrency for mining. Some, like Bitcoin, are already too difficult to mine, while others generate small profits that barely cover the costs. In addition, the final income depends on the exchange rates, and they are very volatile.
Passive earning on masternodes
Masternodes are servers in a decentralized network through which transactions are performed. They can also be characterized as a storage location for a complete copy of the blockchain that is updated in real time. Masternodes must meet certain criteria, they differ depending on the cryptocurrency. One of them is the amount of collateral, which is blocked in the wallet.
Examples of cryptocurrencies that provide the ability to create a masternode: Dash, ZCoin, PivX, ImageCoin, SysCoin.
Преимущества и недостатки получения дохода на мастернодах
✅ It is enough to keep the computer on and go about your business in order to receive passive income.
✅ If you find a promising new coin, you can buy its masternode for little money and secure yourself a tangible profit in the future.
✅ You can more or less accurately predict how much income a masternode will bring per month.
✅ Masternodes are essential to the functioning of any blockchain.
❌ High entry threshold. For example, in Dash, you need to pay 1000 coins, which currently amounts to almost $ 70,000.
❌ The complexity of the initial technical setup.
The choice of methods of passive earnings on cryptocurrency is wide and varied, but they all imply initial labor or financial investments. Study and test different methods for yourself, find sites with the most profitable and comfortable conditions. Then you will definitely find the path to follow in order to receive stable additional income with a minimum amount of effort.