How to Earn Passive Income With Cryptocurrencies in 2021

 

Many people use cryptocurrencies as an extension of their traditional investments.

Historically, investors have diversified via the stock market, precious metals, and more.

Of course, all of these investments are made with the intent to generate passive income. Now, cryptocurrencies are becoming a normal part of that batch.

Whether you’ve been in the investment game for a while now, or if you’re just getting started, know that there are many ways to earn passive income cryptocurrency. In this post, we’re going to break down each method to help you get started as soon as possible.

1. Invest

The number one way to get started earning passive income with cryptocurrencies is to simply invest. If you buy a cryptocurrency at a low price, and then it goes up over time, that’s passive income.

Some investors diversify into multiple cryptocurrencies, profiting off of Bitcoin as well as altcoins. This is the easiest way to get involved. Simply buy and plan for the best.

From here, many investors claim it’s best to hold. After all, the crypto space is considered by many to be quite nascent.

Experts and financiers claim there’s a long way to go before these assets hit their peak. If that logic is to be followed, now is a fantastic time to invest and hold for a while.

2. Staking

Staking is a newer passive income method in the world of cryptocurrency, but it’s a pretty easy way to get started. Some blockchain networks are built on a proof-of-stake consensus method, meaning that blocks are verified by dedicated users of the network, rather than mining through proof-of-work.

To become one of these users, you must stake, or “lock-in” the network’s cryptocurrency.

Each blockchain has its own minimum threshold of staking as well. Meeting those requirements ensures you become a validator – the network is trusting you to verify transactions.

All you need to do from here is leave your computer on and connected to the network, as well as hold your staked funds in the network’s wallet. By doing so, you earn rewards.

The more you stake, the more you earn! On top of this, staking is much better for the environment than mining, so you’re doing good for the planet as well. Eventually, many blockchain networks will make the shift to proof-of-stake.