At this point, most of us know about cryptocurrency to some degree and know about how profitable it can be. Tokens like Bitcoin have regularly beaten out traditional stocks in terms of returns, and many more of us are adding them to our portfolios.
Oftentimes, the focus on cryptocurrency Investments tends to be on active trading.
However, not all of us want to sit in front of a computer and actively trade all day, hoping to make a profit.
The good news is that there are several ways to go about making income from crypto that require little effort.
In this article, we’ll highlight some of the passive and semi-passive ways to create an income from digital assets.
Staking Income From Crypto
If you use tokens based on the proof-of-stake consensus, you have the option to make money passively via staking. Staking essentially means locking away your tokens on a blockchain for a period of time to support network activities.
While you will not be able to use your tokens for this period, you get a certain percentage in interest once the period elapses.
The thing about staking is that it requires little effort on your end. All you need to do is commit a certain number of tokens, decide on the time, and wait till your interest period matures.
Staking is a great option for those who want to earn money without much effort or have tokens they will not use for a while. Staking is also pretty straightforward and can be done in the following steps:
- Choose a Token: Any cryptocurrency asset based on the proof-of-stake consensus can be staked, and this includes tokens like Ethereum, Cardano, Solana, and so on. You might have specific preferences regarding what tokens you like to use, or you might find that one offers more benefits than the other. Look into each token and decide which one you want to use. Keep in mind that tokens based on a proof-of-work consensus, like Bitcoin, cannot be staked.
- Choose a Platform: Because there is such a high demand for staking, several platforms have popped up to support the activity. These include mainstream exchanges like Binance and Coinbase, dedicated staking platforms, crypto wallet service providers, and so on. You can also join a staking pool where you, as the name suggests, pool resources with other users to stake and then split the profits. You’re best off considering each option and looking at what percentage they will give. Some platforms are known to give a higher interest than others, so make sure you choose the one with the best reputation.
- Choose your Duration: On many staking platforms, there are several options for staking periods. You might choose to stick your tokens for 30 days, 90 days, and so on. Always remember that the longer you stake your tokens, the more money you will receive.
- Store Your Tokens: As you use cryptocurrency, you should always make sure to store it securely to avoid losing it. If you use a decentralized platform for your staking needs, for example, you want to have a high-quality wallet to avoid theft and loss. As crypto expert Alexander Reed explains, the best decentralized crypto wallets are those that have top-notch security features and thus will protect users.
Following this, you can sit back and wait for the period to mature, at which point you will get your interest.
Lotteries
Most of us are familiar with the concept of a lottery, but did you know that there are crypto-based ones as well? These lotteries differ from traditional ones because they carry a much lower risk.
Typically, you pay a certain amount of money as a buy-in to a lottery, and after the winner is chosen, everyone else walks away with nothing. But crypto lottery operators have turned this on its head with the creation of no-loss lotteries.
As the name would imply, it’s a type of lottery where no one loses. Essentially, players deposit money as a buy-in, and this money is pulled together and staked. After the interest is gathered, the winner is chosen, and they get their initial buy-in plus the money accrued. Those who don’t win get their initial buy-in back and thus do not have to risk losing anything.
Playing a no-loss lottery is a simple as adding your buy-in and waiting for the period to mature. Best case scenario, you get a significant amount in interest, and worst case scenario, you get your money back.
Lending
The success of the crypto sector means that many more people want to get their hands on tokens in different ways, and some are willing to borrow them. This offers an avenue for passive income generation through crypto lending platforms.
These simply see you signing up and lending your tokens to other users. Just like with a traditional loan, you charge a percentage in interest and get it back by the end of the agreed period. The good thing about crypto lending is that while it is not attached to a traditional bank, it is governed by smart contracts.
This means that the transfer of tokens and the charging of Interest is completed via computers and not based on human effort. Not only does it make the process more seamless, but it also means that neither party is likely to be defrauded.
To get into crypto lending, you should take the following steps:
- Choose a Lending Platform: There’s a myriad of crypto lending platforms on the internet, and it’s opt to you to look at all of them and decide which appeals most to you. Some have better functionality, customer support, and so on. It is best to compare and choose the one you think you’ll have the best experience on.
- Decide Your Lending Amount: These platforms typically operate as peer-to-peer sites, which means that you list the amount and type of crypto you wish to lend. Along with this, you can specify how long you are willing to lend it for and the interest rate.
- Lend The Tokens: Once you have an interested borrower, confirm all the details with them and, using Smart contracts, initiate the lending process. Once the period has elapsed, you should receive your interest and be on your way.
Just like with staking, this is a good option for those who have tokens lying about that they don’t plan to trade for a while and want to make something off them while they wait.
Trading bots
While many of the options we’ve spoken about are not connected to trading, you might still want to swap tokens, as it means to profit from cryptocurrency. But if you don’t want to do all of this yourself, you could always opt for a crypto trading bot.
As the name suggests, these are AI programs that can be empowered to make trading decisions on your behalf.
There are several levels of authority you can give a trading bot are some may take out specific actions you decide, and some may simply be told to trade in any way that will make a profit.
If you feel so inclined, you could set up a crypto trading bot and have it swap tokens on your behalf. These include telling it to sell your tokens once it reaches a certain price, by tokens when they fall below a certain price, and so on.
Passive Mining
While tokens based on a proof-of-work consensus like Bitcoin cannot be staked, it’s possible to mine them without doing the technical work yourself. Several services have popped up that help crypto users mine their tokens. How this works is that you contact the service and pay a certain amount depending on the token and how many units you plan to mine.
Say you want to mind five bitcoin tokens but don’t want to do it yourself. In that case, the service providers will give you a quote for the five tokens, and after you pay, they will mine it within their own facility.
There will be no need to buy mining hardware, monitor it, use your electricity, and so on. Once the tokens have been mined, the service providers will deliver them to you, and you can be on your way.
Those who don’t have the technical knowledge to mine tokens or simply don’t want to will certainly benefit from this option.
Final Thoughts
The crypto industry is very dynamic, and this means that people of all temperaments can get in on the action and make money. If you want to make a profit passively or semi-passively, you should consider some of the options on our list.
With them, you can reap all the financial benefits of the crypto space, all whilst not having to engage in strenuous work.
FAQs
Can you make money from crypto passively?
Yes, there are several ways to make money from cryptocurrency that don’t require a lot of effort.
How can you make money from crypto passively?
You can choose to stake tokens, mine cryptocurrencies passively, play lotteries, use trading bots, and so on.
Is passive crypto income safe?
As long as you use reputable programs and keep your tokens secure, passive income from crypto is indeed safe.
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