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Aside from working to earn an income, it’s a viable thing having an alternative source of income different from the conventional methods or regular business. In this article, we discussed 5 ways cryptocurrency can serve as a source of income.
The Purchase of Digital asset for future Sale
At best, the simplest method in earning additional income is to invest your capital in digital assets such as Bitcoin or Altcoins (Ether, Ripple, BinanceCoin, etc.) and retain it for future sale. While the digital market is constantly evolving, there still exist tendencies for high price fluctuation. Whereas, it gives opportunity if properly used with the potential for a multiplier effect on assets not beyond the scope of a relatively short period.
Although this seems attractive, also put in mind that for some time now, Bitcoin has lost as much as 15percent of its value and its present price as of July 31st is about $10,000. As a result of this, investing for future sales as a whole is considered the most beneficial Bitcoin investment plan, although it doesn’t give an exact outcome in any specific period. Smart investors watch the market and properly analyze when what, and how to invest in its future sale.
Digital Asset Mining Such as Bitcoin
As an alternative to the purchase of digital assets such as Bitcoin, mining is available as another choice. Different from the physical mining operations in acquiring minerals and metals from the earth, crypto mining is a series of operations in authenticating payments while inputting to the Blockchain. By providing the computational power, miners receive in return cryptos for their service.
On this side, the requirements are challenging due to the amount of capital involved in establishing a crypto mining rig, costing between hundreds and thousands in dollars. That’s an average example of the overall cost of establishing a mining rig.
Lightning Nodes Investment
Similar to Bitcoin, lightning network is a layer-2 transaction protocol over blockchain networks. It is designed in creating transaction channels among two users in solving issues of scalability, charges and time plaguing current crypto blockchain networks. As of Q1 2019, the number of functional lightning nodes increased almost by 77percent to 7800 towards the end of the quarter. Establishing a lightning node can earn one a passive income. As a result of this, the “channel” created empowers participants to send virtual currencies such as Bitcoin to each other while getting payment for transaction charges on processing and empowering the transactions. What are the prospects? As stated by Bitmex, it can give returns of up to 2.5% percent.
Lending Digital Asset
Lending digital assets or lending coins is an absolute passive method of earning a profit on the acquired digital asset. Essentially, it functions as a bank lending money to clients and paying interest on deposited funds in your account.
Platforms such as Celsius, Compound. Finance and DharmaLever receive a digital asset from lenders while also paying interest on the assets. What amount can you earn? Depending on the total asset you’re lending. As a whole, Stablecoins give higher interest rates. Platforms, such as Celsius are custodial service providers and as a result, your assets stay with them based on trust. Platforms such as Compound and Dharma are centralized platforms. Exchanges such as Bifinex and Bitrue also offer coin lending services. In comparison to other methods of making passive profits, this method is put forward as the least risky method for investment.
Digital Asset Staking
Staking is the main standard system backing the proof of stake (P.O.S) algorithm. Expressively, miners utilizing a POS protocol are encouraged to stake their investment in authenticating payments through making a profit on the assets staked. The main beneficial result of staking is the non-requirement of mining hardware. Alternatively, a digital wallet may be enough. As an example, digital assets such as Dash, NEO are coins to stake.