We are all here for the same reason, regardless of how you found this article: we want to make money. More importantly, we want to make extra money. The good news is that there are a lot of ways to do this that don't involve working yourself to death in a daily 9-to-5 grind. I am, of course, talking about passive income. Because there are so many methods for generating passive income in the crypto market and this is a crypto-oriented website, most of the passive income I'm going to talk about is in the form of cryptocurrency. Don't worry if crypto isn't your thing: these principles apply to many passive income sources, so let's begin.
Anyone who has spent time researching passive income potential has probably noticed the term "compounding" a few times, but what does it mean? Well, it's exactly what it sounds like: making your earnings produce even more earnings. The simplest and most common type of compounding is the familiar and highly publicized "interest rate." Other types of compounding require a more direct approach on the part of investors, but they all serve the purpose of turning "lazy" money into "working" money. It is important to determine the compounding process that best suits your lifestyle and financial capabilities. In this article we will be focusing on passive income through earning Annual Percentage Yield (APY), but I'll touch on other ideas, too.
If passive income is your goal, APY is going to be your best friend. In the crypto market, as with fiat currency, it is important to diligently research not only what you invest in, but where and with whom you hold your investment assets. There are thousands of crypto coins and tokens to choose from and untold numbers of financial institutions, exchanges and wallets in which to hold them. Different assets perform at different rates depending on how much you hold and where you store them. For example, one crypto exchange may offer 5% APY on a certain asset, while another wallet offers 7% APY as a reward for staking that same asset through their service. Diversification of investments and investing platforms is critically important to protecting oneself against loss and maximizing profits. The trading/transaction fees that a service charges, if any, should also be examined before committing assets to the platform, along with any minimum deposit/withdrawal amounts. At the end of this article, I'll share links to some of my favorite wallets and exchanges along with a brief explanation as to why I prefer them.
Interest is certainly the easiest way to generate passive income, but it isn't the only one. There are a lot of "faucet" services that offer users free cash or crypto in exchange for completing certain tasks that range from simply solving captchas or viewing ads to taking surveys and subscribing to partner services. There are even organizations that pay users just to install and run free software. In almost all of these cases, the earnings to be gained directly are minute: the real money is in their referral/affiliate/partner programs. These typically pay users a percentage of what their referrals earn. It is the basic principle of pyramid ("Ponzi") scams, but those rely on new users putting their own money into the program and vanish with everyone's money when there aren't enough new investors to sustain the program. The referral programs I'm talking about here are ones where no investment is ever required, therefore no loss can occur. That said, many wallets and exchanges offer referral bonuses as well, so if you find a good service, share it. Take whatever you are able to earn from these free services and put it somewhere you trust that will cause it to accrue interest at the highest available rate.
Another earning method that can be compounded but suffers an unfortunate and often fair reputation of being rife with scams is cloud mining. Legitimate cloud mining services offers users the opportunity to purchase "mining contracts," which essentially amounts to the organization renting out hashrate based on actual mining rigs that they operate and maintain. Caution should be exercised with these programs, as the volatile nature of cryptocurrency prices makes it difficult to predict profits over long terms. Some indicators of scam cloud mining services include: any claimed guarantees of profit, requirement of any initial deposit in order to withdraw mined assets from services that offer "free" hashrate (often called maintenance fees, but legitimate services take those fees directly from mined profits daily), or the ability to mine USD directly (I've actually seen this many times, despite it being impossible). The real mining sites can be compounded by using the mined profits to buy additional hashrate, either on the same site or by using the profits from one to invest in another. This process can even be combined with interest-earning platforms for further profits from a single initial investment. One could, for example, buy hashrate on one cloud mining site, use the mined profits to buy hashrate on a second site (diversification!), then withdraw mined profits from the second site to a wallet or exchange that offers the best APY on that particular asset. To complete the circle, one could use the interest earned to go back and buy more hashrate from the first site, resulting in a revolving cycle of increasing income over time. Attention must be paid to the length of mining contracts in order to avoid having profits plateau as contracts begin to expire. Most cloud mining sites also offer referral programs.
The ultimate goal of compounding is to reach a point where you can simply hold interest-earning assets and sustain a reasonably comfortable lifestyle solely on income from that interest while still letting your investments grow over time. Once you have reached that milestone, every financial gain from then on is icing on the cake. To help you get started and, of course, to earn a little extra myself, I have included some of my personal referral links below.
https://cryptotabbrowser.com/13168124 - CryptoTab Browser is free (with options to pay for more speed) and lets you mine BTC just by having a tab open. Users can operate on unlimited devices using a single account. CryptoTab offers a staggering 10-level referral system. With 10x Cloud Boost activated and Super.Boost at +400%, plus a neat trick found in another article of mine, this is a good start for passive income earning.
https://brave.com/bxd014 - Brave pays you BAT for allowing it to show ads in the form of Windows notifications. They are small and you do not have to interact with the ad to receive BAT.
https://dualmine.com/?ref=219909 - Cloud mining site supporting several popular currencies. I recently received my first withdrawal of 0.004 BTC. LTC is the most profitable asset at the time of this posting.
https://rollercoin.com/?r=kbrgt0tb - Crypto mining game that supports BTC, ETH and DOGE. Users can play games to win hashrate and mine real crypto which can be withdrawn or, in the case of BTC, used to buy in-game items to increase mining ability permanently.
https://hashshiny.io/r/BU0377784 - Cloud mining site that supports a handful of popular currencies and offers automatic reinvesting. Like Dualmine, LTC is the most profitable asset at this time.
https://worthybonds.com/?r=CbKwd - Peer-to-peer lending company available only in the US at the time of this posting. Offers "bonds" at $10 each, which accrue 5% APY credited and compounded daily. Users can link bank accounts for automatic recurring purchases and Round Up monitoring, which rounds all transactions out of that bank account up to the nearest dollar and buys one bond when the amounts rounded up total $10. I have successfully withdrawn over $100 in principal and interest.
https://www.hotbit.io/register?ref=639498 - Exchange site that offers APY on many different cryptocurrencies, as high as 30% (PCX), credited and compounded daily.
https://www.kucoin.com/ucenter/signup?rcode=2Rygg1y - Popular crypto exchange that offers referral commissions. I haven't used this one much yet.
https://nexo.io/?u=5e9d5c8c604f5b64ca185d37 - Crypto wallet that offers APY from 4-10% on all but two of its supported currencies, plus monthly dividend payments and +1% APY for holding NEXO tokens there. NEXO holders also enjoy 50% reduced APR (5.9%) on Nexo's offered credit line, backed by the user's own held assets. Best of all, Nexo has no transaction fees of any kind.
https://r.honeygain.me/STRIKAF5C8 - Honeygain pays users to install their software, which runs in the background and shares internet connection over an encrypted network. The only downside is the service pauses when a VPN is active. Good for people with unlimited data plans to offset the cost of internet service.
https://cryptomininggame.com/?ref=3406ca0e4e08 - Another game with mining and real-world payouts, plus PVP and card battle elements. Players much reach level 15 in order to make withdrawals. HPower can be obtained through world missions, reward chests and mini-games and does not appear to expire, though mining does have to be restarted periodically and consumes crystals.
https://bitcoinaliens.com/?ref=722434&game=88&pf=2 - Free LTC faucet with hourly and bonus claims, plus the surprisingly profitable AdJoe offerwall, which pays LTC for installing apps and playing mobile games. AdJoe does not track progress in a game and you do not have to be a new user/player, only how long it remains open matters. This is extremely useful when one is about to go to sleep. Open AdJoe's offerwall, install the highest paying app, open it and go to sleep. Wake up to a million or so litoshi.
https://cointiply.mobi/ra2t - Faucet app with hourly claims, PTC ads, partner programs and offerwalls. Rewards are paid in their own "coins" which can be withdrawn as BTC or DOGE, or accumulated until 35,000 or more, after which they accrue 5% APY. One coin is a little more than one satoshi. Users can also deposit BTC or DOGE to reach 35,000 coins more quickly.
https://blockfi.com/?ref=d06882ee - Crypto exchange and lending service that offers 3.2-8.6% APY on held BTC, LTC, ETH, USDC, GUSD and PAX. Be careful of the withdrawal fees (https://blockfi.com/rates/#).
