There are numerous stories about Bitcoin and other altcoins bringing massive profits to crypto enthusiasts. Nonetheless, lots of people avoid virtual currencies because they think it takes a lot of time to learn how to earn from them. Indeed, crypto trading requires time and effort to gain very specific knowledge and understanding of the market. But still, who said that trading is the only way to earn?
The crypto industry is developing at a very high speed. There are numerous ways you can earn from crypto without spending hours studying the charts and price movements. Let’s discover the 4 best ways to earn passive income from crypto.
Referral Programs
Different crypto projects want to attract as many investors as possible. They are even ready to reward you for assisting them in this challenge. You can find numerous cryptocurrency affiliate schemes that will reward you with digital coins for attracting new users to the platform. In most cases, you can join such schemes for free without any verification or providing any sensitive data.
Referral programs can include different activities, but most commonly they ask you to share a referral link with other potential users through any possible means. If they proceed by your link and will register their account, a certain percentage of their fees will be redirected to your crypto account automatically. Although payments might not be very significant, participating in referral programs is the easiest way to make passive income from crypto, since you aren’t required to make any deposits or other starting investments. The more active users you invite to the platform, the more profits they will generate for you.
Cloud Mining
If you are interested in the crypto industry, you must have heard that Bitcoin and some other cryptocurrencies are mined. Alongside that, you should have learned about the obvious drawbacks of crypto mining, including expensive hardware and high energy consumption, leading to unsatisfactory electricity bills. However, there’s another way.
Cloud mining is a special approach that allows you to mine coins without owning special equipment. There are special online services that make their mining capacities accessible to users through cloud computing powers. The only expenses are commissions you pay for the possibility to take advantage of such services.
These days, there are many companies that enable cloud mining. Learn about their fees, available coins, and equipment employed, and choose the one that suits you best.
Staking
Staking might be not as easy as the previous options, but it also might be more profitable. To start taking coins, you should find a blockchain network that employs the proof-of-stake consensus mechanism. This is offered by the vast majority of today’s blockchains, including the second biggest one – Ethereum – so it won’t be a big issue for you to find a good platform. Every blockchain has its own requirements for validators, so it’s important to examine them before you start.
What is staking in simple words? Blockchains use coins to validate transactions taking part within their ecosystems. You can stake your coins, and the blockchain will reward you for this with a certain percentage of return. The coins you stake get frozen by the blockchain system. If your account is randomly chosen to validate the transaction, you will receive a reward that will correspond to the staked amount. It’s important not to skip your turn to validate the transactions if you want to get the reward.
The process of transaction validation isn’t as simple as sharing a referral link through your social networks. It’s a bit more complicated, you will need some time to obtain these technical skills. Or, you can pay for certain services that will do this for you.
Although staking requires initial investments, which might be quite significant for some crypto enthusiasts, this is still more beneficial than mining. A validator on the blockchain network who stakes the coins doesn’t need to have special hardware and pay high electricity bills.
Yield Farming
Yield farming vs staking might be confusing for some beginning crypto enthusiasts, as they believe that there’s no difference between these approaches of making passive income from crypto. However, there is a difference, and you should be aware of it in order to understand why yield farming can be more profitable.
The yield farming method is when you deposit your coins into a so-called liquidity pool. This is a special solution based on a smart contract. Traders who access this liquidity pool will pay special fees. A certain percentage of those fees is provided to those investors who provide liquidity.
Yield farming often requires some Ethereum (ETH) along with a DeFi token of some kind like Uniswap (UNI) or Pancake Swap (CAKE) or possibly a stablecoin like Tether (USDT).
Summary
In this guide, we listed the most popular ways to make passive income from crypto. We started with the simplest method and ended up with the most complex one that requires good starting capital and some technical skills. We believe that this guide will be useful for both beginning and experienced cryptocurrency enthusiasts. All the best!