The Best Way to Earn Passive Crypto Income?

By johnwege | johnwege | 18 Aug 2021


If you have been following me for any significant duration of time, you will know that my two largest passions are bitcoin and growing my passive income from cryptocurrency.  Everyone loves to be able to make extra money while they are sleeping or doing nothing.  During the last few years the cryptocurrency market has seen incredible growth, and with that the methods or abilities to use your cryptocurrency to make a passive income has grown in numbers. Ranging from crypto faucets, lending out your bitcoin to a third-party, staking your coins, mining, DLC's, participating in DeFi and utilizing farming, selling NFT's, using the Brave browser or even reading articles at places like Publish0x, and also earning crypto from games.  While some of these, the "passive" part of it may be up for debate, they can still be performed while you are at home, and that is part of what passive is in my opinion.  But which method is the best way to make that passive income? Every person is different, and what works great for me, may in-fact not be the best for you, and vice versa.  The great thing about earning a crypto passive income is how quickly the market often appreciates.  While the money that you're receiving may initially seem quite small.  That same amount may go up in price by 10x or even more, and that previous smaller amount of income can quickly become something much larger.  Especially if you continue to reinvest all the income that you are making.

I would like to begin by talking about the methods that I am not a fan of. The first of those being cryptocurrency faucets.  Yes you can earn crypto dust by doing these that may appreciate into a higher value in the future.  But in my experience, it is often difficult to find reputable faucets that actually payout, and I also feel it isn't worth the time or attention that is required to do these.  To maximize faucets you need to continually click-to-earn which means it will be taking up a lot of mind-space and prevent you from doing other tasks.  Time is money, and I have found that I can use that same time and earn much more money doing other tasks.

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I also am not a fan of DLC's, (Discrete Log Contracts).  You can earn a passive income by agreeing to sell your coins at a certain price by a certain date, and receive an initial bonus for doing so.  If the price reaches that target, you are forced to sell your coins.  If it doesn't hit that price by the deadline, you can keep your coins.  If you are open to risk this can be quite a profitable venture, especially if you take on more risk by agreeing to sell at a price that is more likely to be hit.  But if you are a hodler like me who hopes to never sell, this can just seem too risky. One of my largest fears is to lose my bitcoin, and all that hard work I put into to accumulate to the point that I have so far.  Only to be forced to buy back in at a higher price.

And finally for my controversial pick; DeFi or farming.  Please don't take this the wrong way, I am a big fan of DeFi in the long-run and am incredibly excited about its potential and technology. But you need to understand that I am incredibly averse to taking incredible risk.  It seems every day there is some sort of DeFi hack where funds have been stolen, and I must admit that it makes me worried.  It is an incredibly young technology.  Investing into cryptocurrency itself is always quite risky, I don't need to increase my risk even further.  With that said; as the technology matures and becomes a bit safer, that is when I will begin to invest more into DeFi.  For now, I am taking a wait and see approach.

Now let's move on to the methods that I really enjoy.  I am a big fan of earning crypto from using the Brave browser and also just from reading articles at places like Publish0x.  While admittedly, you will not earn a lot with these methods.  But if you hodl, there is a likely chance that your earnings will appreciate over time.  At least for me, these types of activities are two of my greatest passions already, (surfing the internet and reading about crypto) which means that I would be doing them even if I wasn't getting paid.  Getting paid crypto is just a bonus on top of it.

Next, let's talk about mining.  This is one of my favorite methods and can also be extremely profitable.  It also can be quite demanding.  The start-up cost of buying the equipment can be very expensive, and then there is the monthly electric bill that can become large as well.  And then it takes some knowledge and know-how to set up the rigs, and maintain them as well.  Mining ethereum has been an incredible money-making opportunity, but as ethereum is moving over to ETH 2.0, that means mining will on this chain will come to an end as well. Mining bitcoin require asic machines that are very expensive, and out of reach for most people.  This means that the prospects of mining in the future are less exciting for me, and I will most likely put my attention elsewhere.

You can also earn money from playing various games as well.  Be careful; just like faucets, these can require an enormous amount of time and become not passive at all.  With that said, this has incredible potential for the future.  You can see that with how this sector of the crypto market has been taking off during the last few months.  While I must admit that I haven't done much in this area yet for a few reasons.  There have been few games that I found actually fun and enjoyed; meaning that it wasn't passive at all and felt more like a chore.  Or the initial investment required to get started was too much for my liking.  With that said; I am excited for where things may go in this field and will keep my eyes open for future opportunities.

Finally, let's talk about my favorite methods.  If you know me, you probably have guess already that my two favorite methods are lending out my cryptocurrency and also staking it (specifically ethereum).  For simplicity purposes, I will put them in the same category here.  In my situation, I lend out both bitcoin and ethereum, and also stake ethereum.  There are risks with both options.  When lending; you are giving up custody of your coins to 3rd party services like BlockFi, Celsius, Nexo and the list goes on.  If that company went bankrupt, got hacked or even decided to freeze your account, that could lead to you losing all of your money.  Even though some places claim to have insurance, we haven't actually seen any of this take place, and it is never a guarantee to actually get your money back.  Now the risks for staking.  Currently, when you stake ethereum, you are locking it into ETH 2.0's contract.  Once you have done this, it is locked up until ETH and ETH 2.0 merge.  This could take a few months, a year, several years, or may never happen.  There is no guarantee that you will ever get these coins to be unlocked, and so the risk is that you are giving up your liquidity. Of course, if ETH and ETH 2.0 are able to merge successfully, this risk will no longer be the case.  I love lending and staking cryptocurrency, because I feel it is the easiest of the bunch, and the most available to the most people.  You can begin your journey with $1 or even less, and then continue to build up.  The magic of compound interest is an incredible thing and you will be amazed at just how quickly you can increase your earnings.  Then also taking into account that the price of your coin will most likely be appreciating in value over time as well.  When I first began lending bitcoin, I was only earning a two dollars a month in value.  But now I have grown that to nearly a thousand dollars per month. Just keep growing your stacks.

How about you? Which forms of earning a passive crypto income do you like and dislike?  Which method earns you the most money?

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johnwege
johnwege

Hello I'm John Follow me on Twitter! https://twitter.com/johnwege


johnwege
johnwege

Living day by day, stacking sats and trying to retire early. Follow me on Twitter twitter.com/johnwege

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