Popular Methods of Passive Income Investing in Cryptocurrency

Popular Methods of Passive Income Investing in Cryptocurrency

Most crypto world newcomers start by wondering which is the best way to start investing. Given the crypto industry’s diversity, it is hard to say one method is the best. 

Furthermore, one of the most pressing issues has been determining whether active or passive income is more profitable. And, well, crypto generates opportunities for both passive and active investing.

Users opt to build a portfolio as varied as possible, often turning to passive income investments.

Active vs. passive income investing

Naturally, active income has time limitations. You may only take on extra work until you reach the physical limitations of what you can and cannot do. As for passive income, it comes even if we can no longer work actively for it. And it is also infinitely scalable.

The main reason that people still choose active income is that the returns are almost immediate and tangible. In this category, we primarily have wages.

However, while passive income takes a long time to generate, if you’re investing for the long term, passive funds of all kinds give long-term returns.

Yet, experts believe that, while both investing methods are beneficial, passive investments have attracted more investment flows than active investments. The benefits of passive investing are closely related to their methods. 

They have some significant advantages, such as low fees. Because no one is picking stocks, oversight is much less expensive. Another benefit is transparency because it’s always clear which assets are in an index fund.

A passive income gives you more financial freedom and releases you from the traditional workday to seek alternative investment opportunities. In addition to providing more free time, passive income can help you focus on important financial goals, such as retirement savings. 

Also, do not forget that cryptocurrency technology is built on security that allows users and owners to remain anonymous during transactions, which is another significant advantage.

Passive income investing methods

There are multiple ways to generate passive income with cryptocurrencies. And looking at statistics, users choose mostly choose the following methods:

  • Airdrops&giveaways: investors can participate in some airdrops&giveaways and receive tokens;
  • Crypto landing: passive income opportunities generated by lending your funds to protocols, trading platforms, exchanges, or other crypto users. By lending your crypto funds to these parties, you can earn passive income in the form of interest;      
  • Yield farming: involves lending or staking cryptocurrency in exchange for interest and other rewards. Yield farmers measure their returns in terms of annual percentage yields;
  • Mining: Start by choosing and setting the hardware you’ll use to mine, then create a dedicated wallet. You need a valid wallet to get paid when you successfully validate a block. Configure your mining equipment and start;
  • Liquidity Pools: they pave the way for LPs to earn interest on their digital assets. Users can earn a portion of the fees generated by trading activity in the pool by locking their tokens into a smart contract;
  • Staking NFTs or just simple staking: staking NTFs refers to locking or depositing your NFTs to earn passive income. The yield generated through staking is generally known to be distributed in the form of tokens;
  • Strong nodes: Strong nodes are run as a service; therefore, they do not require hardware, allowing anyone, even non-technical people, to build a blockchain-compliant node in seconds and get paid for running it.

Node protocols are among the most popular passive income investing methods. Unsurprisingly, they perform even better when operated gas-free. And a suitable example of that matter is Scarlet Chains, a passive income node protocol that runs exclusively on the Redlight gasless blockchain ($REDLC).

As for Redlight Chain, it is a platform that operates similarly to Ethereum and optimizes transactions, redefining blockchain technology with gasless transactions. On platforms like this, you do not have to pay gas fees when you interact with their Blockchain.

Ending note

Nowadays, when time doesn’t seem to allow us to do everything we want, having a passive income is a must-need. Money that comes from passive investing is money that continues to produce income without the need for the investor to manage or monitor their holdings actively.

Of course, a crypto investment also implies a dose of volatility; that’s why we need to have secured resources and a diverse portfolio.

Adam Green

About Adam Green

Adam Green is an iGaming industry written that has been covering industry regulation and events for the past 11 years. He has written for a number of other publications including iGaming Insider, IGB Magazine and Gambling 911.