Can Crypto bring you passive income? ; Yes it can!
Everybody dreams about not having to work and just sitting in a chair enjoying the sun. A lot of people have always been talking about the passive income streams and how it can’t be done, and in some regard that is true. You can’t just buy into a 20$ E-book and expect to make any money passively. If money was that easy to get a lot of people would be much richer then they are now. With that said, there is ways to have a passive revenue stream and that is especially the case in crypto! Crypto is so new and it’s changing all the time that means new ways of making a profit is popping up all over the place! I will in this article discuss some of the ways you could make a passive income and go a little more in depth about what I mean with passive income.
But Drake what do you mean with passive income?
Thank you for asking I will tell you what I mean! When I say passive income, I mean that after you have done the initial setup. That means it might take some time or money to set up but when everything is done and setup you don’t have to look at it every hour of your day! For example, I would not classify Steemit as passive income because you must actively engage and write posts/comments every day if you want to make money on it. Where a Node for a coin or token for example would allow you to set it and forget it.
The first way. Nodes!
I mentioned it before nodes are the first thing that comes to mind when you think about passive income with crypto master nodes is a transaction system some coins/tokens use instead of the POW (proof of work) method which requires a lot of electricity and is bad for crypto because of the negative publicity. Master nodes only require you to have your computer online or you can even use a VPS to cut down that aspect as well. The price of a master node depends entirely on what coin/token you chose. Some master nodes can go for as low as 200$ while others can cost you 20.000$. you can see the price and the profit you can estimate to make on the website below. Master nodes have proven to be more successful for coins/tokens, even Ethereum will be swapping to a split between master nodes and mining soon. (bear in mind you will need 1500 ether for a Ethereum master node)
The second way. Staking!
Staking is a lot like Master Nodes, the big difference is that there is usually a lower entrance point for staking than Master Nodes that also means that the profit you can expect to make would be lower than a Master Node. This method is usually linked to Master Nodes in a way as if you don’t have the coins required to set up a node there is usually a staking system for the same coin, the way staking works is the more coins you own the more your stake will be, so if you have 500 coins you can expect to make less then if you had 2500 coins. It is quite hard to calculate how much you will make by staking as every coin have their own way of calculating the staking. Down below I have listed a few of the pros/cons of a master node/staking.
- Better rewards (in most cases)
- More predictable profitability & payout rate by looking at the stat page
- Ability to vote on proposals (for some coins/tokens)
- Can be hosted away from your main wallet with the coins
- Higher running cost due to higher resource requirement (VPS or pc turned on)
- Not the easiest to setup and troubleshoot when you run into issues
- Require an exact amount of coins for a node FX 1000 Dash.
- Ease of setup. (just have coins in the wallet, put staking=1 in conf then unlock it to start staking)
- No initial startup time (payout delay) unlike a master node requiring 3-6 days when it's first started.
- Flexible (less penalty/delay for being offline for over an hour like a master node)
- No minimum or specific amount of coins is needed to activate staking.
- Unpredictable profitability & frequency of payout
- Most likely less payout amount / frequency than master node (due to higher competition & lower block reward)
The third way. Equity/Dividend tokens.
These are relatively new in the crypto space and there is only a few of them currently. However, there is more and more projects exploring this way of handling their tokens. What these tokens does is that when you hold the tokens you are entitled to a % of the profit the company or service make. These can be profitable if you get in early. If we take KUCOIN as an example, KUCOIN currently gives 50% of all the profit they make from transactions to their shareholders, that means if you own any KCS you will get some of all the tokens traded on the exchange every day. There are other companies like this and more and more is showing up. I personally got into the COSS coins when they were at 0.06$ and they are currently sitting at just about 0.40$ that means not only am I making a bit of money from the dividends every week, but I have also made profit from the coin going up in price!
Would you like to see more of these passive income posts?
I am thinking about making a series where I share my journey to make a set amount of money from passive income streams within the crypto space. if this is something you would be interested in please leave a comment below. if you have any other topics you would like me to cover please let me know! thank you for reading.