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Can you make passive income with cryptocurrency?

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Can you make passive income with cryptocurrency?

As we wait at home, unable to go out, owing to the lockdown, we come up with ideas for generating extra revenue from home. Cryptography comes to mind here. Money gained from projects in which a person is not actively involved is referred to as passive income. Investing your money or digital assets in a certain crypto investing strategy or platform and seeing it create profits is usually all you have to do. In certain circumstances, earnings are fixed and predictable. In other cases, several factors beyond your control may be at work. 

Buying and holding crypto – also known in the industry as "HODLing" – is a common way for many people to try to make a return in crypto with little to no involvement. This means that an investor is willing to buy a digital asset with the expectation that its price will rise significantly in the future.

Is staking crypto passive income?

Staking is how new transactions are added to the blockchain in cryptocurrencies that use the proof-of-stake model. Participants make a cryptocurrency protocol pledge by pledging their coins. The protocol selects validators from among these participants to confirm blocks of transactions. The more coins you pledge, the more likely it is that you will be chosen. 

When a new block is added to the blockchain, new cryptocurrency coins are created and distributed as staking rewards to the validator of that block. Although some blockchains use a different type of cryptocurrency for rewards, the rewards are usually the same cryptocurrency that participants are staking. To be able to stake cryptocurrency, you have to first own a cryptocurrency that employs the proof-of-stake model.

Then you can decide how much you want to bet. Many popular cryptocurrency exchanges allow you to do so. You're putting them to work, and you can unstake them later if you want to trade them. The unstaking process would take some time, and some cryptocurrencies require you to stake coins for a set period. 

Staking isn't possible with every cryptocurrency. Many cryptocurrencies use the proof-of-work methodology to add blocks to their blockchains. The problem with proof of work is that it demands a lot of processing power. As a result, proof-of-work cryptocurrencies require a lot of energy.

How do you make money with crypto coins?

Look no further if you're wondering how to make money with cryptocurrency! Making money with cryptocurrency relies on three mechanisms: 

  1. You might begin by investing or trading in the bitcoin exchange market. This is comparable to how you may invest in gold on the stock market without holding any cryptocurrencies.
  2. Second, you can stake and lend coins to the system or other users using the coin you already own. 
  3. Finally, you can participate in the blockchain system by mining or receiving coin rewards for system work.
Here are six techniques for making money with cryptocurrencies based on these three mechanisms: 
1. Making an investment 

Investing in the long-term strategy of purchasing and holding crypto assets for an extended period. They are extremely volatile in the short term but have enormous long-term growth potential.

2. Investing 

While investing is a long-term strategy based on buy-and-hold, trading is designed to capitalize on short-term opportunities. 

The cryptocurrency market is extremely volatile. This means that the prices of assets can fluctuate dramatically in the short term. 

3. Investing and lending 

Staking is a technique used to validate bitcoin transactions. You hold coins but do not use them when you bet. The coins are instead kept in a cryptocurrency wallet. Following that, your money will be used to validate transactions on a Proof of Stake network. You get rewarded for your efforts.

4. Crypto Social Media 

You will be rewarded for creating and curating content on a variety of blockchain-based social media platforms. You are frequently rewarded with the platform's native coin. 

5. Mining 

Cryptocurrency mining is how to make money with cryptocurrency in the same way that the original pioneers did. Mining is still an important part of the Proof of Work mechanism. 

6. Airdrops and Forks 

To raise awareness, airdrops and free tokens are distributed. An exchange may conduct an airdrop to build a large user base for a project. Being a part of an airdrop can get you a free coin that you can use to buy things, invest in, or trade with.

What crypto coins are worth investing in in 2021?

These are some of the cryptocurrencies worth investing in 2021:

1. Bitcoin (BTC) has a market capitalization of more than $1.17 trillion.

2. Ethereum (ETH) Market cap: Over $520 billion. 

3. Binance Coin (BNB) Market cap: with more than $88 billion. 

4. Tether (USDT) Market cap: Over $70 billion.

5. Cardano (ADA) has a market worth of more than $66 billion.

6. Solana (SOL) Market cap: Over $60 billion. 

7. XRP (XRP) 

8. Polkadot (DOT)

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  Nov 29, 2021       by ebimo-dogubo       2.2K Views

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