How do you make money off of cryptocurrency? That’s the question that not only active traders but also many casual investors ask themselves on a daily basis.
7 Ways to Earn Passive Income with NFTs.
While you can mine your own cryptocurrencies like Bitcoin and Ethereum, or trade them through an exchange, what if there was another way to earn a passive income from the blockchain? Enter Non-Fungible Tokens (NFTs).
The intersection of NFTs and cryptocurrency opens up new opportunities for both investors and creators of digital assets. Here are four ways you can earn passive income with NFTs.
This Article is based on Intermediate Level, if you are new to NFT, Kindly do take the below link
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Table of Contents
Scenarios For Earning Passive Income
There are several ways an individual can earn passive income through a blockchain-based asset. The main ones include dividends, token burns, and voting rights. Here’s how they work. (And remember, we aren’t just talking about cryptocurrencies—these strategies apply to any digital non-fungible token (NFTs).)
Coins in Wallet – Each time you hold cryptocurrency in your wallet (whether it’s a crypto wallet or traditional wallet), you’re earning passive income in two ways.
First, holding is like collecting interest on your money because of compounding interest (interest on top of interest). Second, if you do nothing else with your coins but leave them in your wallet, you’ll get transaction fees from any transactions involving those coins.
If you transfer your coins to an exchange and sell them, then you’re also earning some amount of passive income. This isn’t technically dividends since there are no shares involved—it’s just that exchanges charge a small fee for each trade—but it still counts as passive income for our purposes here.
Dividends – Some cryptocurrencies pay dividends when they make profits (e.g., NEO and Ontology). These aren’t really true dividends since they don’t involve sharing ownership in anything; instead, they are more like interest payments that reward token holders for their support of the network.
Buying Cryptos Directly
If you’re looking for passive income and don’t want to wait for your cryptocurrency investments to mature, you can always buy them directly. Several crypto-to-fiat exchanges have emerged that allow individuals who already own cryptocurrencies (such as Bitcoin) to convert them into other currencies, including USD, CAD, and EUR.
To be clear, crypto-to-fiat is a long-term strategy; it isn’t meant for anyone who needs cash immediately or wants access to their funds 24/7. Fees are charged based on the volume of transactions and minimum daily deposit amounts may apply.
But if you’re willing to wait out any market volatility, then buying cryptos directly could be a great way to earn some passive income. Some platforms include Coinbase, Gemini, and Kraken. For example, Coinbase allows you to sell BTC or ETH for USD through its Coinbase Pro platform.
It’s also worth noting that while it’s possible to mine many cryptocurrencies yourself at home—even bitcoin—it’s not cost-effective unless you’ve got high-end hardware.
Mining pools offer far more profitable returns but again, they’re not designed for beginners and require an initial investment in expensive mining equipment like ASIC miners which are basically computers made specifically for mining cryptocurrencies rather than running normal computer programs such as games or word processors.
In short, there’s no magic bullet when it comes to earning passive income from cryptocurrencies yet but there are ways to get started today even if you don’t know much about blockchain technology!
Earning Crypto Via PoS
Proof of Stake (PoS) is a new model of validating blocks in a blockchain network. Instead of requiring miners to solve cryptographic puzzles, PoS requires users to simply own tokens on a blockchain network and stake them for transaction validation.
Depending on how it’s implemented, PoS might have lower energy costs than other methods, but there are some risks involved too—ownership can be concentrated in just a few hands.
This model has been used successfully by many blockchain networks—it powers Ethereum, NEO, and Lisk—and it’s gaining popularity as an alternative option for earning crypto through mining rigs.
There are plenty of opportunities out there to earn cryptocurrency via proof-of-stake models. But you need to do your research first! Some proof-of-stake coins require owners to maintain large balances while others don’t have minimum requirements at all.
The best PoS coins will give you regular payouts over time and may even offer additional benefits like governance rights or access to valuable services like smart contract development.
If you want to earn passive income from proof-of-stake, make sure you know what you’re getting into before diving in headfirst!
Earning Crypto Via Masternodes
Masternodes are in high demand right now, and there are several coins that you can run a masternode on. The concept is simple: you buy a specific number of coins, turn them into masternodes (which requires at least 1000 coins), then you are entitled to receive regular dividends from any coins/profits earned from your master node as long as it remains online.
If your node goes offline for any reason, you lose those rights and have to reapply once it comes back online. When all is said and done, running a master node shouldn’t cost much more than $1000 per month in fees paid out from fees generated by their respective blockchain.
Proof of Ownership
There are ways for you to make money using an asset you already own. Proof of ownership (or PoO) is a way for companies to manage physical assets without having an on-staff professional in charge of tracking them down and distributing them when needed.
For example, car2go uses a smartphone app that allows users to locate nearby cars, rent them, unlock and lock them, and also pay their bills. The company also has its own charging stations so they can service any cars that may run out of juice along their journey.
If you have something like a boat or RV that’s sitting idle most of the time, consider allowing others to use it as part of a shared fleet. You’ll be able to earn income from someone else’s assets while helping people get where they need to go.
Experiential Goods & Services
These are physical goods or services that require you and others to experience them. For example, if you’re selling photos of your best friend’s new baby, it won’t be much fun for anyone else unless they have an appreciation for your photography skills.
Similarly, if you have a skill such as singing in a band or recording music and wish to sell your live performances on CDs or DVDs, chances are very few people will buy them unless they can appreciate your work.
People who earn passive income through experiential goods and services usually appreciate fine quality (as opposed to fads) and often aren’t interested in earning money from their activities alone. They want these things that make up their passion because they love doing them anyway!
Creativity and Innovation in the Crypto Space
Creativity and innovation have been two of cryptocurrency’s biggest selling points. With physical tokens, you can find ways to incorporate those same innovative traits into a real-world product or service.
For example, Everledger uses colored diamonds, which are valuable and scarce in their own right. This makes them a good fit for tracking and protection purposes but also gives them inherent value outside of a particular ecosystem—just like cryptocurrencies.
The idea is that if you create something that people want, then they will be willing to pay for it. If it has intrinsic value as well as is useful within an ecosystem, then it becomes even more attractive.