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In the cryptocurrency industry, you can make money by trading or investing in projects. However, this usually requires extensive, time-consuming research and does not provide a guarantee of a sustainable income. This is an "active" way to make money, because you will make money in proportion to your efforts (and good decisions). However, there is another way to warn to make money, "passive income".
Passive income is a way of earning in which an investor receives a sum of money for the shares of others. This comes in different ways: in the traditional fiat system your bank gives you a small percentage of the money you lock in your savings account, some MLM companies offer you a commission for every transaction that one of your affiliates closes. both examples, you do nothing, but still, you get paid, even if your bank (or affiliate marketer) does the job.
Over the years, people have come up with new ways to make money while you sleep, let's look at some of the most tried and tested ways to create passive income streams with cryptocurrencies.
Cryptocurrency mining requires expensive hardware for custom construction, technical knowledge and a massive amount of energy. This makes the mining industry very competitive and dominated by large corporations. Mining cryptocurrencies is not as profitable as it used to be and is not really as viable as a passive income for most people. Although some may make a nice profit by mining lower hashrat proof coins with higher potential reward, with higher potential reward has a higher risk, these lesser known coins have low liquidity and could become worth overnight.
In cryptocurrency mining, it all depends on the cryptocurrency algorithm. Some cryptocurrencies (such as Monero) can be mined with a regular computer, others (such as Ethereum) will need strong graphics cards, and others like Bitcoin will need high-quality hardware, such as ASIC (Integrated Circuit). Application Specific).
The other option is to join a mining network, pay a union fee, and work with other miners. This eliminates the need to spend thousands of dollars to get started, but also means reduced rewards as you share them with the team.
Some companies will reward you for helping their platform grow (usually through links or referrals). If you have a large social network, affiliate programs can be a very easy way to earn easy money.
Masternode are servers that form the basis of a blockchain network; they have increased capacities that no other nodes in the network have. Running a masternode usually requires a significant advanced investment and a high level of technical knowledge to be able to run.
Staking allows you to generate a passive income, regardless of the volatility of the cryptocurrency. Staking was first introduced in 2012 and was used as a reward system for Peercoin (PPC), which used the Proof of Stake algorithm. The chance of being the next block validator is proportional to how many cryptocurrencies you own or "bet" in your wallet. In some cases, you also add funds to a stake fund, exchanges often handle the technical part of this. The crypto stake is similar to the interest earned from the bank, except here; the coins are locked in the wallet. Think of stakers as the miners of a Proof-of-Stake cryptocurrency.
