Cryptocurrency is getting lots of buzz due to its asymmetric gains. When everybody talk about Bitcoin or Litecoin, they seem to talk how much they grew in last couple of years.
I used to daydream about having $500-1M asset, investing them in safest stock to earn $5-10K per month as dividend that will be equivalent to a middle class job in the developed countries. My favorite equity would have been PIMCO High Income Fund (PHK) which offered almost 11% dividend every month. Then it crashed from $9 to $7.7 and lowered dividend to 8%, that gave me realization that there is no basket of equities that can provide 12% each year, in guaranteed fashion.
My entrance to cryptocurrency in 2013 through mining of Litecoin and Bitcoin was motivated by that goal. Though I almost made 4000 LTC but lost them all in day and futures trading in 2015 before the mega bull run in 2017.
However, with arrival DeFi such as crypto.com, nexo, blockfi.com, celsius.network, MakerDAO, passive income has become easier, probably safer than ever. Even investing through stablecoin has also removes volatility. For example, Crypto.com offers 12% APR paid weekly on most stable coins such as PAX, USDC, DAI, USDT.
Therefore, most cryptocurrency based on Proof-of-work are speculative vehicles or good for store of value. Some of these legacy coins such as BTC or LTC is still slow as a transaction currency. Mining them for passive income has become almost impossible these days due to higher cost of mining gears. There is an opportunity to invest in Nodes for lightning network, however, it seems to be technically subtle and requires significant investment.
The popular passive income through Masternode are in severe downfall. For example, a popular MasterNode coin called SMARTcash has crashed from $1.9 to 0.3 cents, it used to provide 10-20% interest. What is the use of the interest, if the principal crashes to 99.9%.
There are few interesting but relatively new coins that provides handsome APR as high as 20% from VSystems, but as SMARTcash has shown, early success does not prognosticate great future.
Bottom line is both PoW mining such as BTC, LTC and XMR or PoS mining known as staking has become too risky for retail investor-miners.
Another income source is powering up EOS or Steem, delegating to users who require resources to use DApps. Again there is a volatility related to price of EOS and Steem.
Lending is also possible through service like ETHland etc.
Here are some links for passive investing in Crypto:
https://hackernoon.com/how-to-earn-passive-income-for-your-crypto-5950b83d8190
https://blog.stakingrewards.com/7-ways-to-earn-passive-income-with-cryptocurrencies/
https://medium.com/datadriveninvestor/crypto-dividends-the-future-of-passive-income-6ce1c47197e6
https://medium.com/@cryptoroi.com/earn-up-to-30-apr-staking-stablecoins-2d544ad35bb1
Do you know any other interesting ways to earn passive income with cryptocurrencies? Let me know through comments or link to the reference.
Disclaimer: This opinion is not a financial advice, it my personal perspective and opinion. Please seek professionals for financial decisions.
Image sources: Most images are open sourced (e.g. Pixabay, Wikimedia etc.) with Creative common license. Some images are used with due courtesy to respected owners.
Thanks for reading.
Cryptominer, trader and blogger since 2013