Earning money while sleeping is a goal that every person aspires to achieve. Building passive income streams takes hard work, which is the antithesis of the very idea of making passive income. Not in crypto, though.
In the world of cryptocurrency, patience is a virtue that’s valued far more than hard work. If you have a lot of money to invest and you’re not afraid to lose it, then it’s possible for you to earn passive income.
This guide will look at 5 of the most popular and simplest ways of making passive income through cryptocurrency. Disclaimer: Some of these methods are risky, so only invest if you’ve done your due diligence.
Staking means locking up your crypto assets in a digital wallet or a ‘staking pool’ and earning rewards, usually in the form of more cryptocurrencies.
Some platforms, such as Wizardia, also give away NFTs. You can use a staking calculator to see how much you’ll have to invest to get the rewards you want.
Staking is perhaps the simplest way to earn passive income through cryptocurrency. But since the crypto market is so volatile, you could lose your money even if the amount of cryptocurrency you’ve locked for staking has increased.
Play-to-Earn Games (P2E)
Whether you’re old or new in the crypto space, chances are you’ve heard of the term ‘play-to-earn.’ P2E games allow you to earn passive royalties by monetizing your gaming experience. Different P2E games have different game mechanics, which means there are various methods and strategies to earn passive royalties within a single P2E game.
The problem with most Web 3.0 P2E games right now is that the gameplay isn’t as exciting as it is in Web 2.0 games. Fortunately, there are a few projects out there now, such as Wizardia and Mars4, that are changing the P2E landscape.
Cloud mining means purchasing ‘hash power’ or mining equipment from someone and earning a portion of the total cryptocurrency they mine in a day. There are two types of cloud mining:
- Hosted Mining—This is when you buy mining equipment that a third-party miner maintains. The miner sets up the mining rig while you control the output.
- Leased Hash Power—This is when you purchase hash power from a mining farm. The amount of money you earn depends on how much hash power you buy.
Lending your cryptocurrency to someone is another great way to earn passive income. The amount you receive depends on how much crypto you’re lending and the interest rate. It also depends on how long the loan will last. The interest rate for most cryptocurrencies is usually between 5%-10%.
The borrower returns the loan to you with interest, which is how you make passive income. There are different lending options, and they all have their pros and cons.
Crypto Savings Account
Crypto savings accounts are exactly what they sound like. You put your cryptocurrency in a digital wallet and earn an annual percentage yield (APY) on it. They’re the safest way to earn passive income through cryptocurrency you want to hold long-term.
Crypto savings accounts work the same way banks do, except the APY they offer is much higher.
Ready to Start Earning Passive Income?
Thanks to cryptocurrency, earning passive income is no longer a lofty goal and is well within the average person’s reach.
There are many different methods you can use to make money through cryptocurrency. You just have to figure out which one works best for you.
Just remember that crypto is a risky investment, so make sure you do thorough research about whatever method you want to use to make passive income!