Buying and holding crypto is good but making your crypto work for you is great. I got to know this last year and I wish I knew earlier. Gone are those days I leave my crypto in my wallet for a long time without earning any passive income, right now I don’t allow my coins stay idle.
I will always recommend letting your coin help you make passive income because dips can be tough for people that depend on crypto for everything. If you are surfing off the blockchain, I guess you can relate to how dips can affect you. During spike, you eat like a king because the value of your holdings are worth more. But during dips the value of your holdings are lesser and you don’t want to sell at the bottom, but you need to survive. What do you do? You survive off your passive incomes generated from your crypto holdings.
Passive income is the income generated or earned without so much effort. You earn with far less effort compared to when you put effort. Lots of people call it making money in your sleep by allowing your money work for you. Crypto has made this look too easy, and they are different ways to do that.
As a crypto investor that makes passive income with my crypto holdings I only use 3 methods of earning passively through crypto. Thanks to Hive, everyone knows about delegation and how you can earn from delegating your Hive power or any of the Hive engine token power. If you are the busy type that can’t afford to always come online and curate or rather come online and select quality good content creators to curate, you can delegate your Hive power to some content curators. Some of these content curators give delegation rewards in liquid form instead of receiving your rewards in Hive power. I really don’t know how they do that, may be they use a bot to distribute rewards in liquid form.
You can also join curation trails to curate alongside a good quality content curator. But these are ways of making passive income with your Hive power on Hive.
Let’s go off Hive and talk about the general crypto space.
We have ways of making passive income with crypto
Yield Farming: Though I haven’t tried this because of impermanent loss but it’s one of the ways of making passive income with crypto. This is what we know as providing liquidity to a liquidity pool. The blockchain rewards you for providing liquidity in the liquidity pool. It’s part of Defi, meaning Decentralized finance. When you provide liquidity, by putting your crypto assets in the blockchain, you get sweet returns. You don’t have to do anymore work.
Staking: This I consider the best, safest and less risk compared to the rest. I do this more than others because the returns are high. Well, staking just involves locking your coin or rather holding it in a wallet on a platform to help support blockchain security. In return, the blockchain rewards you.
Mining: Never earned money through this means before, so not really sure how the technicalities of this works. But mining is validating and verifying transactions on the blockchain. In return the blockchain rewards you for your effort. This is to my understanding though.
Having A Crypto Savings Account: Well this requires giving out your control to centralized crypto platforms. It involves holding your coins in a wallet and getting returns for holding it. Most of these centralized exchanges allow crypto savings.
Once again thanks to Hive and HBD savings, you can earn passively by putting your HBD in savings and earn 12% APR.