It is no secret that the crypto space is filled with lots of opportunities to make money, but as it is with everything new, a lack of knowledge has prevented people from taking advantage of these opportunities. The most popular way of earning is through buying and selling of coins. As many have discovered though, this strategy alone has seen people lose a large chunk of their capital due to the high volatility of the crypto market.

How then, can one earn money without looking at the market 24/7? The answer to this is to earn income passively. The crypto space evolves everyday and is so fast paced that new opportunities arise everyday.

Let’s dive deep into how one can earn passive income with crypto.

What are the ways one can earn passive income with crypto?

  • Cloud Mining

First on our list is cloud mining. Of course this is not the regular mining that demands one having huge technical knowledge, capital and lots of hardware. Mining simply means using a computer network to secure a network to receive a reward. Cloud mining can be defined as a mechanism which is used to mine cryptocurrencies such as Bitcoin, without having to install the hardware or having a large chunk of technical knowledge on mining. Cloud mining firms allow people to participate remotely in crypto mining just by opening an account with them. This method enables the participants to earn income without much stress of setting up the equipment or maintaining the equipment either.

While cloud mining seems to be the ultimate source of earning passive income in the crypto space, it is important to note that before one can earn a subsequent high amount of income through this method, it could take over a year. Historically speaking, buying and holding coins have been said to be a faster way to earn income in the crypto space.

  • Staking

Staking of coins simply means an individual lending their coins to a network to validate transactions. Staking of coins helps to maintain a proof of stake based blockchain system. In exchange for lending your coin to the network to help validate transactions, the exchange rewards stakers with additional coins which come in the form of interests.

The best way to earn through staking is by joining a pool, a place that enables users to amass their funds together to receive a larger portion of the transaction validating power.

Maximizing your stake and having a constant connection to a crypto wallet is one way to effectively maximise staking.

  • Lending

For long-term holders, this method is very suitable and efficient since it increases their holdings with little effort required. Lending has to do with the locking away of one's funds in an exchange for a period of time.

The basic principle of traditional cash loans can also be applied to crypto lending - the borrower pays interest to the lender.

Some Defi protocols have made this process of lending easy and quite profitable to the lenders. Decentralised Finance is a blockchain-based form of finance that does not rely on central financial intermediaries such as brokerages, exchanges, or banks to offer traditional financial instruments, and instead utilizes smart contracts on blockchains, the most common being Ethereum.

Peer to peer lending services is offered by several lending protocols, where users lockup their funds to collect interest payments later. You can either have a fixed interest rate which is set up by the exchange or have a rate based on the current market value.

  • Airdrops

Another way of earning passive income is through airdrops. This is an event whereby a coin is given out to the public for free or at a small cost, mostly gas fees. All that’s required from participants is to perform a few tasks, which mostly consists of social media actions such as, follow a page, share a content or sometimes to like a post.

This is regarded as one of the easiest ways to earn income in the cryptocurrency space.

Of course, with everything there are things to watch out for when it comes to earning passive income in the crypto space and many scams have been linked with airdrops in the past..

  • Affiliate programs

Many cryptocurrency platforms reward users for referring new persons through their referral or affiliate programs. Overbit’s affiliate program is one of the most rewarding of such in the cryptosphere. Its two-tier commission structure rewards users with a percentage of commission paid by their referrals in bitcoin. This is a great way to earn passively as commissions are paid daily and users get to earn through to two referral tiers.

Risks of earning passive income

  • When it comes to earning income through airdrops, one has to be very careful about how they distribute their wallet address. There have been cases of people losing their entire funds in their wallet during an airdrop. It’s always advisable to use a different wallet from your main funds wallet when participating in airdrops.

  • Sending out gas fees in a bid to get airdrops has been an issue in the crypto space. Gas fees are required sometimes when one needs to claim an airdrop. It doesn't hide the fact that scammers push out fake airdrop campaigns and inform the participants to pay a certain amount of gas fees before they can claim their airdrops. In a bid to avoid this, always research coins that have an airdrop. Checkout their social media handles, their team, read the whitepaper and of course know what their use case is.

  • When it comes to staking, having your funds locked up can have a reverse effect when the price of that coin drops.

In conclusion, the crypto market is not just all about trading coins. You don't have to stare at the screen 24/7 in a bid to make sure you earn income. Taking a little time to set up a system, through the methods mentioned above, goes a long way in increasing one’s income in the long run.

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