Wouldn’t it be great if you could earn some money outside your regular gig or business without putting a lot of effort into it? There are a variety of ways to earn passive income from digital assets like bitcoin. Here are some of the most popular ways to earn money from cryptocurrency.
Buy and Hold Digital Assets
By far, the easiest way you can earn some extra money is by investing in digital assets like bitcoin or altcoins (Ether, Ripple, Binance Coin, etc.) and just hold (hodl) them. As the digital assets market is still in its nascent stages, it’s inherently prone to price swings. This is an opportunity, if utilized properly, that could potentially even double your investment within a relatively short time frame.
For example, if you had purchased bitcoin on Jan 1st, 2019 when it was trading at $3843 and then sold it on July 12th, 2019 when it was trading at $11,815, you could have earned 200 percent in pure profits.
While this sounds extremely promising, please note that since that time, bitcoin has depreciated by as much as 15 percent and is currently trading at ~$10,000 as of July 31st, 2019. Thus, while hodling is generally considered one of the best investment strategies for bitcoin, it is by no means a sure bet in any specific given timeframe. Wise investors keep an eye on the market and use due diligence when choosing when, what, and how to hodl.
Mining Digital Assets like Bitcoin
Instead of buying digital assets like bitcoin, you might choose to mine them instead. Unlike the physical mining process of acquiring minerals and metals from the ground, crypto mining is the process of verifying transactions and adding them on to the blockchain. Miners get rewarded in crypto for providing computational power.
The caveat here is that setting up crypto mining rigs requires some capital, which can range from a few hundred to a few thousand dollars. Here’s a good approximation of how much it’ll cost to set up a mining rig.
Invest in Lightning Nodes
The Lightning Network is a layer-2 payment protocol on top of blockchain networks like that of bitcoin. The primary purpose is to create a payments channel between two participants which can help address the problems of scalability, fees, and time plaguing current crypto blockchain networks. During Q1 2019, the number of operational lightning nodes grew by as much as 77 percent to 7,800 by the end of the quarter.
To earn a passive income from this, you can set up a lighting node. When you do this, the ‘channel’ established enables users to send virtual currencies like bitcoin to each other and you get paid transaction fees for processing and enabling this transaction. How much can you expect to earn? According to a research report by Bitmex, you could potentially earn as much as 2.75 percent returns. Continue reading…