Ideas to get passive income by holding cryptocurrency

in #crypto7 years ago


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The aim of this article is to present to you the ways on how you can get a passive income and guaranteed return on your cryptocurrency or tokens. What will be covered here? I will try to cover few cryptocurrencies and ways how to generate more of those cryptocurrencies. Things that will be covered are POS aka Proof of Stake , DPOS, master-nodes, cryptocurrency that pay you the dividend, a share of profits of some companies. This should give you the bigger picture of what things you could apply and use to get how to say interest on your cryptocurrency. These cryptocurrencies are not some get rich schemes so if you are looking for this simply skip reading the text below.

Proof of stake consensus



Okay, first we are going to talk about POS. Proof of stake is getting more attention as it drastically decreases the cost of electricity for maintaining the network. It is one alternative to Proof of work or mining that is widely adopted and talked about, heck even ethereum is looking to implement it in future.

Proof of stake requires the user to show ownership of some amount of particular crypto. One node that creates a block is chosen at random by the network, depending on how many coins users stake and this is defined by their wealth. Those users that run nodes in order to stake their coins get rewarded by the fees and also with additional reward depending on inflation, so nodes receive a reward when new coins are created. Proof of stake still have some flaws as it is not that perfect from POW, just putting here that it is not an extraordinary consensus over proof of work.

Without the need for miners proof of stake is much cheaper process in terms of electrical power usage. The best thing is that you can acquire some small hardware such as raspberry pi where your power costs will be low. In the beginning, many POS cryptos began by mining or with an ICO, since you have to have coins in order to stake and validate transactions. The process is fairly simple, you host a node with coins in it ready for staking and run it 24/7. This will produce you some coins and for this expensive mining equipment is not needed. The percentage of your stakes depends on the network of particular cryptocurrency that you chose.

Now that we have some basic understanding regarding what proof of stake is, let’s dive deep and look into some of them:

Cryptocurrencies with Master-nodes



Master-node is a server on the decentralized network. It does some extra job that ordinary nodes can’t. It can be used for features such as instant transactions and private transactions. Master-nodes are usually costly because in order to have one, you will have to own a large quantity of a particular coin and how to say lock those coins away, still with the master-node you earn a portion of block rewards. Best for this is that you entered early into master-nodes because as time pass by prices can move up and thus it can become more expensive to even start your node because of the coins it requires you will have to own to start at first.

Here are some popular coins that have master-nodes:

I have found an interesting list on google sheets regarding master-nodes coins with good information regarding which cryptocurrencies have master-nodes, how much they cost and other information:click here. This is maintained by one person on twitter, his twitter username is : @jimtalksdata

DPOS – Delegated proof of stake



Similar to POS with the huge difference, with DPOS users, chose delegates and those delegates that have the highest votes maintain the network. With some cryptocurrencies, you can even earn a nice amount of coins if you end up on the list of most voted delegates or if you delegate huge chunk to others. Each of these can have some alterations on how you can get rewards.

Some DPOS coins:

Cryptocurrency that pays dividends



Basically, these are not ordinary cryptocurrencies or tokens that were made to be used as currency or used on some platform. The idea of them is to be pure investments. These are of course high-risk investments as well as any other investment within cryptocurrency space. A dividend is a payout that increases the value of investors holdings like a stock paying dividends in currency.

List of well known dividend-type cryptocurrency / tokens :

There are other ICOs lunching with this dividend in mind such as Exmo exchange but it doesn't have to be an exchange, it can be any type of business that simply raise funds via ICO and then pay investors because investors helped their business to start in the first place.

Others



NEO produces GAS, for this, you don’t have to keep your wallet open. Just quick note here NEO is not divisible cryptocurrency and its main purpose is to produce GAS which is then used for the all things that are done on the network. Basic calculations of earnings you can find here: https://neotogas.com/



Thank you for reading this article, I hope that I have given you some really great ideas regarding some ways on how you could get passive returns by simply holding some crypto. If you happen to know some other way, or if I haven’t mentioned some crypto that you feel should be mentioned please leave a comment below.

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