Cryptocurrency has taken the economic world by storm since its inception and people are intrigued to understand cryptocurrency technology to enjoy its multiple benefits. One of its multiple advantages is that you can generate passive income by dealing in cryptocurrency. we are here to guide you about some of the simple ways to create passive income by exchanging cryptocurrency.
What is Passive Income?
The income produced without putting much effort into the work, unlike a regular job, is called passive income. You create something worthy enough to return you money for a long time or by investing in a business that will bring long-term capital in exchange.
Example:
The income you receive through any of your financial assets, like, the property that you rent or by investing on a property whose value will increase in the future or by publishing a book that makes money for as long as the masses keep on buying it.
Cryptocurrency and Passive Income:
Cryptocurrency is gaining admiration day-by-day and is attracting investors and traders from around the globe. Since cryptocurrency is a decentralized digital currency, it does not demand the work and effort that you need to put on your monotonous 9 to 5 jobs. All you need is an efficient mind and perfect skills to excel in this world of digital currency.
It can prove to be an effective way of creating passive income, but only if you have the required knowledge and expertise in the field. We present to you some of the easiest yet proficient ways, in a simple and understandable manner, to create enough passive income by dealing in cryptocurrency; but each of these methods comes with its pros and cons. Have a look at the following:
Buying Prevalent Cryptocurrency:
One simple way to generate passive income by using cryptocurrency is by dealing in the most prevalent of its currencies that are rising in value with every passing day. Some of the more popular cryptocurrencies at the time are Bitcoin and Ethereum which have seen a massive increase in their value since the past few years. In this way, you can buy a cryptocurrency at the minimal rate and can sell it when the price of the currency rises; which requires good investment strategies and market experience to determine what is the right time to sell a cryptocurrency.
Example:
The people who bought a bitcoin worth a couple of dollars back at the time it was introduced can now gain many thousands of dollars in exchange to it, because at present 1 bitcoin equals almost 39000.00 US Dollar at the time this article was written.
Mining:
One other easy method to deal in cryptocurrencies for making passive income is by mining.
The process of mining uses supercomputer technologies to solve the set of algorithms and codes for the verification, every time a transaction is carried out. The miners get a reward in terms of cryptocurrency providing their services and computer sources.
This, however, requires the technical knowledge and skill to operate the computer for participating in the process of mining of valuable cryptocurrencies. To make it convenient, multiple mining companies offer a membership to the interested people to share the income of mining by investing or participating in their mining operations.
Lending Cryptocurrency:
Lending is yet another simple way to create passive income using cryptocurrency. In this process, you lend any of your cryptocurrency to any individual or company, on a certain interest rate for a specific period. The cryptocurrency is then returned to you with profit at the expiry of the contract. This seems to be an easy way to generate income, but it also requires the knowledge for making conscious choices for lending cryptocurrency.
Saving/Hedging lending:
Many exchanges such as Binance allow for having your coins in a pseudo-saving account or loan account to generate interest. These earn fees from traders who pay interest and a deposit to gain access to extra funds used to long or short coins in hopes of making a great trade. This is risky for the one betting. The interest can vary from site to site and coin to coin. This is a relatively safe way of increasing your coins values.
We hope that this piece of information will help you decide which of these simplest methods are you going to utilize for generating a good amount of passive income.
