You might be familiar with cryptocurrency through trading. It is true that many still hold cryptocurrency as a speculative investment and some just trade it to get fast profit. However, with this industry that keeps on growing with high speed, earning passive income from it is now an available option. So how to earn passive income from cryptocurrency?
Mining is the first way to earn cryptocurrency passively. Cryptomining is a process of transaction validation by solving the algorithm and adding blocks into the blockchain. The person that does the mining will then rewarded by cryptocurrency. Many cryptocurrencies are mined, with famous ones include Bitcoin, Litecoin, Etherium, Monero, Dash, and other cryptocurrencies that use Proof-of-Work consensus mechanism. In order to start mining, you will need an ASIC machine, which is a higher efficiency machine with greater computational power.
Today, you can choose to either run your own ASIC machine at home or join a cloud mining service platform. Running ASIC machine is very energy-consumptive and might cost quite much including the ASIC machine investment that needs to be acquired in the first place. Cloud mining platform has a running mining farm and will let their users gain all mining reward in a certain period of time depending on the mining plan users bought from them. This option is better as cloud mining companies are operating in a much efficient way compared to household-ran mining machines, therefore provides a lower cost for its users.
The second way to earn passive income from cryptocurrency is through running masternodes. Masternodes are servers that join in the blockchain that help to secure the network as well as performing several other advanced features such as instant payment and private transactions. These nodes also enable a decentralized governance system through voting when it comes to development decisions such as budgeting and treasury funding for projects.
However, one has to collateralize a quite big sum of coins in order to run a masternode, to make sure that the masternode owners will not cheat and will secure the whole blockchain network. Besides that, they also need to ensure a stable network server is available in order to run the masternode and might need to use cloud computing services such as AWS to do it. The masternodes owner will then rewarded a certain percentage of the block rewards every time a new block is formed. Running masternode pays a guaranteed and stable rewards to its owners in the cryptocurrency, making it a source of stable passive income. Masternodes are available in cryptocurrencies that are using the Proof-of-Stake consensus mechanism or a hybrid of it, such as DASH, ZCoin, PIVX, etc.
The third way to earn cryptocurrency passive income is through staking. Staking is very similar to running mastenodes but it does have a slight difference. Staking is simply holding and lock a certain amount of coin in the wallet in Proof-of-Stake system coins, and earn a percentage of block rewards through it. Some coins that can be staked include NEO and ADA.
Although it is more efficient compared to mining, and remove the need for heavy initial machine investment, staking is also exposed to risks. In staking, one has to lock up a certain amount of coin for a period of time and cannot be sold. Therefore, if the value of coin depreciate then it will be a loss. Thus it is advised to choose the right coin to stake on, coins that have a great potential to appreciate in value. It is a great passive income source if the right coin is chosen as people can earn both reward and profit from the coin value appreciation.
The above options enable you to sit back, relax, and earn income while sleeping. Running masternodes and staking appears to be a better option since it is more efficient. However, the amount of collateral and number of the coin that needs to be locked might be too high. These days people can mitigate those challenges by joining a trusted staking pool like Honest Mining.
Honest Mining provides shared masternode service, that enables users to stake within few clicks without any technical skill to set up nodes or wallets. Through shared masternode service, users can also start staking with minimum investment and earn rewards collectively. Are you interested in earning passive income from cryptocurrency and grow your crypto-assets? Join Honest Mining today and earn rewards instantly!