What are the ways to earn passive income with cryptocurrencies?

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Mining in essence is the fact of using the computing power of a computer to secure a network in order to receive a reward. You do not need to have cryptocurrencies for this, it is the oldest method for earning passive income in the cryptocurrency space. In the early days of Bitcoin, it was possible to mine with a simple Central Processing Unit (CPU). With the increase in the hash rate, most miners have made the transition to more efficient Graphics Processors (GPUs). As competition has never stopped growing, mining has become a playground almost exclusively reserved for Integrated Circuits with Specific Applications (ASICs) which use custom-made processors for mining activity. The ASIC industry is very competitive and dominated by companies with significant resources to deploy in research and development. By the time these chips hit the home market, they are most of the time already obsolete and require considerable mining time to be amortized. As such, Bitcoin mining has primarily become a business activity rather than a viable source of passive income for the average person. On the other hand, mining Proof of Work coins with a lower hash rate can still prove to be a profitable venture for some. On these networks, the use of GPUs may still be viable. Mining less popular coins carries a higher potential reward, but also includes higher risk. The mined corners can lose their value overnight, lack liquidity, be victims of a bug or be devalued by many other factors. It should be noted that the installation and maintenance of mining equipment requires an initial investment and a certain technical expertise

 

2)The Masternodes

 

In simple terms, a masternode is similar to a server, except that it runs on a decentralized network and includes functionality that other nodes on the network do not have. Tokenization projects tend to give special privileges only to actors who have a strong incentive to maintain network stability. Masternodes generally require a considerable initial investment and a large amount of technical expertise to set them up. For some masternodes, however, the numerical requirement for holding tokens can be so high that it effectively makes the stake illiquid. Masternode projects also tend to inflate projected return rates so it is always essential to do your own research (DYOR) before investing in any of them.

 

3)Lightning nodes

provide liquidity and increase the capacity of the Lightning network by locking bitcoin in payment channels. They then collect the costs of the transactions passing through their channels. Running a Lightning node can be a real challenge for an uninitiated bitcoin holder, and the rewards depend heavily on the overall adoption of the Lightning Network.

 
 

   

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