Last Updated on October 8, 2021 by TARUN CHAUHAN
The cryptocurrency market has immense potential, and you don’t need to be a financial expert to realize it. The recent surge in Cryptocurrency prices has propelled crypto market revenue to the trillion-dollar mark. Furthermore, It is not going to slow anytime soon. In fact, the Cryptocurrency prices predicted to be doubled or tripled in the coming years. So it won’t be a bad decision to jump into the booming crypto market and make your share of profit with Cryptocurrency. In the article, we will discuss the 10 legit ways to build a long-term sustainable passive income stream using cryptocurrency.
Yes, Even a naive Crypto enthusiast can make a passive income with cryptocurrency. Without wondering too much?
There is a multitude of methods to earn Bitcoin and other Cryptocurrencies. However, in this article, we compiled a list of the 10 best legit ways to earn crypto that are most likely to work for everyone.
So, keep reading!
10 Best Ways To Earn Crypto – Make a Passive Income stream With Cryptocurrency
1. Cryptocurrency Staking
The Last year can be viewed as the Year of Decentralized Finance (DeFi), then an honorable mention must be made of the central role that cryptocurrency staking played in the ascent of this new generation of crypto assets.
Staking assets are created via a Proof of stake (POS) blockchain system. Unlike, Proof of Work (POW) blockchain system (where miners are rewarded with newly created cryptocurrency for participating in the mining process for ex. Bitcoin is created using (POW) algorithm)
Whereas in the (POS) algorithm, Users are rewarded for participating in maintaining the operations of a proof-of-stake (POS)-based blockchain system. Block rewards are attributed to stakers using a combination of random selection and the amount of stake (measured by the number of coins) is stored in the platform wallet.
Watch 10 Legit ways to earn and make passive income with cryptocurrency video below
In simple terms, Crypto Staking is basically investing your crypto funds or money on a staking platform where you are rewarded (earning new cryptocurrencies) in the form of interest.
Crypto staking is one of the easiest and safest way to make passive income with cryptocurrency just by holding the coins on the staking platform.
There are multiple Staking Exchanges where you have not to participate individually in the (POS) blockchain system. In fact, the platforms reward you in terms of interest for holding coins on their platform in exchange for a small fee.
Besides the interest, you also get the benefit of price appreciation. Price appreciation is when you hold a cryptocurrency or altcoin for a certain period of time in the hope of price improvements.
Unlike mining, crypto staking is not much resource-intense, more scalable, and extremely swift transactions. It means you don’t have to put large amounts to get started with it.
How does staking cryptocurrency work?
It is really simple. You keep crypto funds in a suitable cryptocurrency wallet so that it performs network functions like validating transactions.
By doing that, you will earn a profit, which is the staking reward.
Cryptocurrency Staking is a win-win deal. You help keep the network safe by ownership, and in return, earn rewards.
In most cases, you only need to set up a staking wallet and hold funds in it. In other words, there is no effort in earning through staking.
That is why we picked crypto staking as one of the Safest and legit way to earn crypto and building a passive income stream with cryptocurrency.
There are multiple popular Cryptocurrency Exchanges which offers staking cryptocurrency.
7 best cryptocurrency for staking
- NEO: There is no minimum required amount. Returns of about 2-5% per year and pays with Gas tokens.
- Ethereum 2.0 – Ethereum2.0 is one of the hottest coins for staking. Ethereum is the second-most popular cryptocurrency in the crypto market. In order to stake on ETH 2.0, you need to own a minimum of 32 ETH, as well as the Eth1 main-net client. Much of Ethereum 2.0 growth can be attributed to the staggering potential rewards that yield farming protocols operating as ERC20 tokens offer to investors. The current annual reward rate for staking Ethereum 2.0 is 11.0%.
- AdEx – is a decentralized advertising network. It appoints and incentivizes validators to process micropayments between publishers and advertisers for each campaign. The current annual reward rate for staking AdEx is 60.0%, with 24.7% of the circulating token supply currently staked.**
- VeChain: Dividends are paid depending on their holding amount in the Ve Thor (VTHO) token.
- Cosmos – Cosmos is one of the best crypto for staking. The current annual reward rate for staking ATOM is 9.23%, with 63.7% of eligible tokens currently staked.*
- Neblio: Staking rewards are paid based on a lottery system, averaging up to 10% per year. The rewards will also increase for continuous staking.
- Komodo: Hold KMD on any wallet (even offline) to accrue 5.1% per year rewards. Staking will start after one hour of adding funds.
- Nav Coin: Hold coins in an online wallet to start staking. Staking will start after two hours of adding funds.
Mining is another legit way to earn crypto and one of the oldest ways to earn cryptocurrency as passive income. In mining, you essentially assign your computer to solve complex mathematical problems, crack codes, and secure the network.
By cracking each code, your computer is rewarded an amount of newly mined cryptocurrency (take it to be bitcoin).
In the early days, mining was affordable and doable via any computer. However, as the competition increased, most miners adopted more powerful Graphics Processing Units (GPUs).
Not only this, but corporations and resource-rich institutions came into play and started using Application-Specific Integrated Circuits (ASICs) (which are powerful computers tailor-made for mining).
That made it even harder for retail miners to earn by mining. To be able to fight back the corporations, bitcoin mining pools and clouds were created.
A mining pool and cloud is a collaborative group of miners who combine their computing power and resources to increase their fighting chance.
However, in these cases, the rewards will be distributed among all members of the group. Thus, it is not very profitable.
All these turned mining into a resource-intense way to earn cryptocurrency and altcoins.
So, before entering this field, make sure you have sufficient resources that can help you keep up with the competition.
Buying and holding cryptocurrencies (also called HODLing) is one of the easiest ways to earn easy passive income.
The process is pretty easy and straightforward. You just need to get a wallet that supports the cryptocurrency you want to buy. Then, hold that cryptocurrency and wait for its price to increase.
Researchers at Glassnode say that more than 95% of Bitcoin unspent transaction outputs (UTXOs) are, as of now, in profit.
You could have been one of those lucky guys just by buying and holding Bitcoin. However, if you are not sure about Bitcoin, there are unlimited other substitutes.
The cryptocurrency market is in a long-term surge. You just need to find the right cryptocurrency or altcoin and hold it to gain profit.
If you are unsure about what cryptocurrency to buy and invest in, we have compiled a list of the most promising cryptocurrencies for long term investment. Make sure to give it a look.
In short, holding is a promising and legit way to earn crypto and make a passive income from your cryptocurrencies.
Lending is an entirely passive way to earn passive income (in this case by interest) on your cryptocurrency holdings.
It is pretty clear how lending works. Think of how banks give loans and earn interest that way.
You do exactly this, just in cryptocurrencies. To make sure that you don’t lose your altcoins while lending them, it is better to use an established, legitimate platform.
Many peer-to-peer platforms let you do this. They let you lock up your funds for some time and later collect interest payments.
The interest rate can either be fixed by the platform or set by you based on the current market rate. But it is important to know that if the interest rate is too much, no one will lend from you.
This method is best for long-term holders who don’t want to do much effort.
Keep in mind, locking funds in a smart contract always carries the risk of bugs. So, make sure to find a reliable platform and stay away from spammy looking customers.
5. Lightning Nodes
A Lightning node is like a door into the Lightning network ecosystem.
If you already don’t know, then Lightning Network is a “layer 2” payment contract that runs on top of a blockchain-based cryptocurrency.
This network aims to enable quick transactions among participating nodes and has been suggested as a solution to the bitcoin scalability dilemma.
To be able to use the lightning network, you need to go through a Lightning node.
By using Lightning nodes, you access fast, cheap, and private payment.
A promising way to earn a passive income with cryptocurrency is to invest in Lightning nodes. When you own a Lightning node, and someone uses it to transfer his money, you will earn a transaction fee.
Now, this method does not deliver fast money. However, depending on the acceptance of this technology, it can be very profitable.
Therefore, if you buy lightning nodes, your profits will grow in line with their acceptance.
Lightning Nodes are also legit way to earn crypto and make a passive income from your cryptocurrency.
The methods mentioned above are pretty much safe and without much risk, but they are also slow. In other words, you can’t expect fast returns.
However, for less-patient and less risk-averse souls, trading is an option. But before trading, make sure you are aware of the risks.
For example, trading on margin is very promising and can offer unmatched profits. But it can also result in magnified losses.
One way to earn passive income by trading is to trade crypto CFDs. Since there is a lot of fluctuation and volatility in crypto, they are good for trading CFDs.
Crypto CFD trading enables not only speculating on the rising price (go long) but also on the falling price (go short).
That enables traders to earn profit no matter which direction the market is heading.
Though, make sure you have a good trading strategy and basic knowledge. For more information about crypto CFD trading, read our crypto CFD trading guide article.
Lastly, trading is risky. And if you are not sure about it, just pass it and use one of the less risky methods.
7. Master nodes
Before defining master nodes, first, let’s get to know a node.
A node is defined as any computing device (computer, phone) that keeps a digital record of all the transactions and data known as a blockchain.
A computer, a phone, or any other computing device that can receive, transmit, and/or contribute to the blockchain is a node.
A master node is more than just a node. It has a managing role and special jobs that regular nodes don’t have.
In plain language, a master node is similar to a server but one that runs in a decentralized network and has functionality that other nodes on the network do not.
To invest in Master nodes, you need time and money. Token projects tend to give out special privileges only to actors who have a high influence in maintaining network stability.
Master nodes usually require a slightly bigger investment and a considerable amount of technical expertise to set up.
This method is costly and a little head-scratching but can be very profitable.
8. Airdrops, and Forks
Airdrops basically aim to increase the distribution of a cryptocurrency by offering a surprise into one’s pocket according to the number of his current holdings.
To receive an airdrop, you only need ownership of a wallet address at the time of the airdrop.
Note: You will never need to share your private keys to receive an airdrop. Thus, if someone or a corporation asks for your private keys, they are scam and want to steal your funds.
Fork is like airdrop in many ways. You just need to be holding the forked coins at the date of the hard fork to get forks.
When a fork happens on blockchain, an investor receives equivalent holdings on the new fork.
These two can be a good source of income. However, these are about luck and can’t be considered as a stable source of passive income.
9. Affiliate Marketing or Referral Bonus
Do you earn passive income with HODLing your cryptocurrencies? If yes, then don’t be mean and invite your friends to do so. Only with your referral links.
If you are an impactful person, either by having a blog or just by social media, sign up for the affiliate program of the services you are using and share it with your friends.
This way, you help your friends choose a reliable platform that you have already used, and also earn some commission.
Referral links also work this way. You send it to your friend, and if they sign up using that link, you earn a referral bonus.
Almost all crypto trading, mining, staking or exchanging platforms offer either an affiliate program or a referral program.
This method is both easy and fast. As soon as someone signs up using your link, you will be notified and, in most cases, you can immediately cash out the funds.
10. Get Paid in Crypto
Many companies are now accepting to pay their employees by popular cryptocurrencies (Bitcoin, Ethereum, Bitcoin Cash, Ripple).
Apart from this, you can work as a freelancer in any niche and get paid in cryptocurrency. Some popular places for finding crypto-paying freelancing jobs are:
You can also help others do various tasks and get tipped in cryptocurrency (mostly bitcoin). A popular example is Bitfortip.com.
Using this site, you can help someone find what he/she is looking for and get tipped in the supported cryptocurrencies.
This is an easy and fast method; however, it can’t be a steady source of income.
Possible Risks in Making Passive Income With Cryptocurrency
1. Investing in the Wrong Coin
There are more than 7,000 cryptocurrencies in total. Thus, it is a little hard to find the ones with the most potential and invest in them.
Also, there are many misleading ads and false claims that can trick you into investing in some low-quality assets. Therefore, do proper research before buying and investing in a cryptocurrency.
2. Technical Issues
Some methods like master nodes require a good technical knowledge of blockchain. So, if you are not an expert or at least an investigative person, don’t use these methods.
3. Lockup Periods
While lending or staking at some platforms, your assets may lockup for a period of time. This makes you vulnerable to high price fluctuations and volatilities.
4. Risk of Bugs
Lending, staking, and in general, every cryptocurrency earning method contains the risk of bugs and scams.
That is why you should only trust legitimate platforms and avoid too promising deals because they are mostly a scam.
The cryptocurrency market has exceptional potential. That is why many are investing and using this market to make money and as a source of income.
There are many ways to earn through cryptocurrency. However, in this article, we discussed the 10 best legit ways to earn crypto as passive income.
You can make passive income with cryptocurrency using one of these methods:
- Lightning Nodes
- Master nodes
- Airdrops, and Forks
- Affiliate Marketing or Referral Bonus
- Get Paid in Crypto
10 Legit Ways To Earn Crypto – FAQs
What is the easiest way to earn passive income in cryptocurrency?
The easiest way is HODLing. In this method, you only need to buy and hold an asset. The hard part is finding a coin with good potential. Other than that, you only need to wait until the price rises and you earn a profit.
Can you still get rich from Crypto?
Yes, you can. In fact, everyone with a little money and good analytical skills can get rich from crypto. However, you need to know that this takes time and patience. You can’t expect to get rich or even millionaire in a couple of months.
Is Bitcoin passive income?
If you are holding Bitcoin, then Yes. There is a great chance that the Bitcoin price will continue rising, and this way, your funds will increase without personal efforts. So, holding Bitcoin is a passive income.
How much can you earn by staking Crypto?
There are different rates. An overall table of rates can be found on the popular aggregator site Staking Rewards. The table reveals that some coins are supposed to yield just 5–7% a year, while others will earn you 50% and more.