Are you willing to enter the crypto scene? Wondering what’s more lucrative: passive income or cryptocurrency mining? Then let’s find out.
As the world embraces cryptocurrencies, the number of people who are willing to make money by using them increases as well.
And, as it stands in the crypto-verse, participants get the chance to either mine or simply receive passive income. Both means carry risks and benefits worth considering.
Pros and cons of passive income
With the advent of virtual currencies, investors have learned that there’s a certain number of prospects for growth in the crypto space. And this growth transforms into profits for those who quickly invest in this unknown market.
Due to how the crypto prices tend to drop from time to time, such moments can be tagged as an ideal time to invest. The price of Ethereum, Bitcoin and all other cryptos tends to fluctuate as new cryptos keep flooding the market. Thus, it’s necessary to find that sweet spot before investing.
For this, a person needs to make use of a credit card or a bank account. And buy crypto with fiat, which is a simple act.
As for its cons, security concerns arise as investing in crypto means you’re entering an under-regulated environment. Besides, not all exchanges out there are fully reliable.
Nonetheless, there’s no other way to move from fiat to crypto. In addition to this, the exchanges charge high fees for withdrawing and even depositing cryptos. Also, separate fees exist for depositing fiat currencies, trading to crypto, trading to fiat, and even withdrawing fiat from a crypto exchange.
Besides, if you choose to invest directly in ICOs, then you need to be prepared for the corresponding risks as well. Particularly, because some ICO projects have turned out to be fraudulent.
Pros and cons of cryptocurrency mining
Presently, the miners take up the position of being the backbone of the blockchain ecosystem. They verify transactions and broadcast them to all the other network nodes.
This way, miners play a major role in growing the blockchain network as they also serve as good actors. They ensure that the transactions on a blockchain ledger remain valid.
Furthermore, cryptocurrency mining does pay off. When a block of the transaction gets mined successfully, the reward comes in the form of freshly minted cryptos, network transaction fees, etc
However, the cons are that token prices are known to depreciate with time. This makes the profit from mining decrease as well. Therefore, miners need to reduce their expectations.
Also, if the token prices don’t recover, the miners will end up spending lots of capital on electricity and other costs.
Cryptocurrency and passive income
Passive income is the generation of cash flow from assets that demand little to no input from its investors. Passive income can be earned from various cryptocurrencies, not just Bitcoin. They include (no preference, just options):
Known as Everyone’s Operating System, it focuses on becoming the leader in decentralized app development. To earn passively in EOS, users can explore several options like airdrops, lending the coin on chintai, or even writing on Trybe.one.
The Ethereum platform enables developers to create their Dapps. With Ethereum, there’s an ICO culture and not airdrops. While the airdrops are free, the ICOs are paid for.
Often referred to as the Chinese Ethereum, NEO reportedly carries out cold staking. This means that a wallet won’t need to be online before it produces GAS, its native token.
Tips to earn from passive income
Passive income is definitely an option worth considering. Here are some tips that might work for you.
Firstly, you might choose to opt for staking. It requires a user to stake his or her coins in a bid to forge blocks. And is done by maintaining a node or a wallet.
Concurrently, it remains the simplest way of earning passive income because the crypto market pays you for simply holding crypto for a specific amount of time. Furthermore, it provides users with a prospective ROI. Notably, the ROI remains much more predictable than other similar means, and you don’t need to invest in hardware.
You might also consider Lighting Nodes as they carry strong prospects. This is due to the fact that they are expected to become more popular. For those who decide to invest in them, returns will increase according to the usage maximization.
Other options include airdrops, buybacks, and forks. The idea behind airdrops refers to the distribution of crypto. As well as providing a windfall into a person’s pocket strictly based on the amount of the current holding.
Whenever a fork occurs, an investor tends to receive some commensurate holdings on the latest fork. Look at it as benefitting from an actual error.
As for buybacks, cryptocurrency is bought to be burnt later in. It is termed inflation control.
Conclusively, another option is Masternodes. It stands out due to the fact that they demand money and time. They function on a PoW (Proof of Work) system and entail the PoW consensus mechanism. While it’s expensive, it’s lucrative as well.
Both cryptocurrency mining and investments are viable options for those who want to make money.
Passive income provides the fastest and simplest way to make a profit (or suffer a loss). However, mining also gives users the chance to play an active role in the crypto-verse.
The choice is yours. Just don’t forget to do your own research and drop a comment below.