In today’s world, modern technology has allowed people to choose the way they want to ensure financial stability. A large community of people still decides to ensure monthly income through 9-5 jobs. Of course, that is a legit solution without any doubt. But, getting out of the comfort zone can also ensure freedom!
Have you ever worked with cryptocurrencies? If not, then you have probably heard that trading Bitcoin and other altcoins can bring you money. However, to reach that goal of professionalism, you will need to work hard on your trading and investing skills. Besides, the most popular cryptos are expensive and not everyone can afford them.
Generally speaking, it is not a secret that trading is the most common way people make money with crypto. However, the time you will have to spend is enormous. It is not a form of passive income; it is a form of full-time (or even longer) job.
Yet, who says that you need to spend the entire day working, analyzing, and measuring cryptos? Believe it or not, the ability to make a passive income with cryptocurrency also exists. All you have to do is to find the best possible option that meets all your requirements and expectations.
1. Is Crypto Passive Income Illegal?
Well, generally speaking, working with crypto can be either legal or illegal. Because of that, it is essential that you primarily check out the crypto laws in your country. Some countries consider crypto as currency while others consider it as a property. In that way, you will know which taxes you have to pay. When investing in Bitcoin is completely legal and legit is something ibtimes.com analyzed perfectly. If you are still not sure, it would probably be good to check out what they wrote there.
After you check out that, you will easily determine which of the passive income methods is the best for you. Let’s find out a few of them that are commonly used in countries where crypto laws are properly developed.
2. You Can Run a Lightning Node
One of the options that you have is to run a lightning node. For those that do not know, lightning networks are the form of second-layer protocol that is there to raise the effectiveness of the transactions. They are always located at the top of the blockchain network.
Let’s translate everything we just said into English. Let’s say that you send crypto to your brother. Your brother will not manage to send you back the same coin you sent to him. The reason for that scenario is simple – all the transactions are one-way.
If you run a lightning node, you will allow people multi-directional transactions. That can be an essential feature for certain businesses and individuals. For every transaction they made, you can charge a commission. Doesn’t that seem like a good passive income?
3. You Can Stake PoS Coins
For those that do not know, PoS stands for Proof-of-Stake. It is better to immediately make things clear. Anyway, the purpose of this form of crypto is to secure the blockchain. The method to reach that goal is by gaining users that will stake coins. If you are familiar with different forms of cryptos, then you know this way of passive income is completely different from Proof-of-Work chains. When someone manages to process the transaction with stating, he will get the reward.
There is a good reason why we placed this method on this list. Even if you are a beginner, PoS staking can be quite good as it does not require any technical knowledge. All you will have to do is to get familiar with the staking procedure. Investing money with no quality information will not bring you the passive income you want.
4. You Can Also Run Masternodes
No, lightning nodes and masternodes are not the same things. Masternodes are similar to PoS coins. It is a type of node that ensures that every blockchain network performs the necessary functions. All the members of the dedicated community (there are many of them) establish this form of node. However, to set up the network, they will have to invest a certain amount of stake coins.
How many coins you will have to invest depends on the community that you decide on. For example, setting up and operating a PIVX masternode requires 10 thousand PIVX. Over time, you, as a holder, can get around a 10% yield per annum. Does that seem fair?
5. Yield Farming Is a Good Option
If you decide to work in a Defi market, earning a passive income can be established by yield farming. It is a procedure where you have to deposit digital assets in a lending pool. To establish the additional earnings, every member of the pool has to stake the token.
Yet, there is something we need to mention here. We suggest this form of passive income only to experienced investors. If you are a newbie, then you need to know this is going to be a risky try. Research yield farming before you decide on this move.
6. Cloud Mining, but Be Careful
The subtitle may cause a smile on your face. However, there is a good thing why we said you have to be careful. According to many crypto supporters, cloud mining is the most controversial way of earning passive income.
For starters, cloud mining suggests that you rent the hardware people use for mining and provide them to specific mining farms. In that way, you will allow people that regularly main to ensure income while you will get the commission for your service. Despite that, you can also charge monthly for the machine you provided.
However, it is important to mention that this form of passive income may not be long-term. When you rent the machine to a mining farm, you are renting it to people that are focused only on one coin. If you sign a 2-year contract, and the value of crypto they mine goes down, how do you plan to establish a profit?
If you decide on this move, then we suggest you research everything! Check out the stability of the crypto mining farm you are working with mines, and be sure that people you plan to rent a machine are not scammers. Different and strange things happen all the time in the crypto world.