Ways to Earn Passive Income with Cryptocurrency

Investing in the stock market mainly requires increasing the margin of profit. Therefore, one of the ways investors must do is to expand their portfolio to integrate various investment areas and types. Crypto network is currently in a fast-moving phase, and it enables investors to earn passive income in digital currencies and tokens. Investors would want to generate revenue even when they are sleeping, so to achieve this, making passive income through various ways is beneficial.

How do we define Passive Income?

The term "passive" simply means that it is an income earned without the individuals' effort. Examples of this are rentals, dividends from a stock holding, interests generated on a bank account; also, the cryptocurrency holdings or any kind of income earned without the investor's participation is called passive income. Basically, these are investments that make money on their own. 

Passive Income Earning Techniques

• Mining

It is the process of solving cryptographic equations and gaining cryptocurrencies by using high-power computers. In exchange for a reward on cryptocurrency, miners employ computational power to secure a network. Litecoin, an example of a cryptocurrency, is gained mainly through mining. To be the best litecoin miner, investors should join mining pools to help accelerate the profitability of cryptocurrency and enhance the mining power of investors. Mining is the oldest technique of producing passive income without requiring a cryptocurrency asset. 

• Lending

This technique is suitable for long-term investors who want to grow their assets without maximum effort. This technique is a passive way of earning interest on crypto investments. Many P2P or Peer-to-peer lending services allow investors to lock up their cash for a certain amount of time to gain interest payments later. Interests are either fixed by the platform or depend on the current market rates. The longer the cash is locked up, the greater the interest they would earn, which is why this is really suitable for long-term investors. Crypto lending may be a good technique, but this can also be quite a risk; therefore, investors should secure an asset protection trust to protect their locked-up assets

• Crypto Staking 

This technique is a resource-conserving type of crypto mining. It allows investors to generate value from cryptos that are in their possessions, lying idle. Here, investors lock up their cryptocurrencies as a way to contribute to a blockchain network. Investors opt not to withdraw their cryptocurrencies on a blockchain until the agreed period. This way, it helps the network gain advantages. 

• Running a Lightning Node

Nodes are an essential part of a blockchain network. They are where the blocks of data that make up those blockchains are stored. This software connects and interacts with the leading blockchain network and within the Lightning Network itself. The advantage of this is investors can contribute to the network and have full custody of their crypto. Another advantage is that once investors start running the node, they can earn by only routing payments.

• Dividends

This technique is a traditional way of earning passive income in crypto investments. But not all types of cryptocurrencies pay out dividends, so investors need to do research first. The benefit of this is that dividends are pretty stable and do not dilute the coin's overall value, unlike other passive income generating techniques. But the downside is that it pays out small amounts compared to the different opportunities stated above. So, it is advisable to have multiple passive income streams to increase earnings

To sum up, investment markets are full of misconceptions, myths, and fiction. And this is the harsh reality. But thinking that passive income will not require doing anything except waiting for the money to come might lead you to something terrible. Investments, just like any other human activity, require effort to see the results. Better research, critical thinking, and solid analytical analysis are needed to have the results you are aiming to have.