Tuesday, October 22, 2019

Top 10 Passive Ways To Make Money With Cryptocurrency

Figure 1: Warren Buffet Quote.

One of my favorite investors, Warren Buffet, says, "if you don't find a way to make money while you sleep, you will work until you die.".  Most people think that to get rich, you need progressively higher-paying jobs, but this is only half of the equation.  More often than not, as you go up the corporate ladder, you get higher-paying jobs but also much more stress and have less time to devote to your investments.
Figure 2: Lounging on a beach.

Now, imagine lounging on the beach and still making money through passive sources of income!  The good news is that there are a wide variety of sources for passive income.
Figure 3: The game Cashflow 101 by Rich Dad.

One way to generate passive income is by owning real estate so you can charge people rent.  You can also receive stock dividends or royalties from books or songs you have produced.  Additionally, you can own a business that is managed by someone else. An excellent game to play to learn about generating a passive income that I recommend is "Cashflow 101" by the Rich Dad Series.  Remember, most millionaires on the average have seven streams of income that are mostly passive income-based.  The great news is that there are many new and exciting ways to make passive income with cryptocurrencies.  Using all my research, practical experience, and the occasional run-in with scams, here are the top 10 passive ways to earn income with cryptocurrencies that I discovered:

  • Buying / Building a Mining Machine
  • Invest in a Mining Farm
  • Lease a Mining Share
  • Own a Mining Farm
  • Direct Dividend Coins
  • Exchange Dividend Coins
  • Staking
  • Masternodes
  • Hard Forks
  • Trading Bots

Passive Method 1: Buying / Building a Mining Machine

A great way to make passive income with cryptocurrency is to buy or build a "money-making" mining machine. When you maintain a mining machine, you aid with the global proof of work network used by many popular cryptocurrencies such as Bitcoin.  There are two types of ways to mine for cryptocurrency, either graphics processing unit (GPU) based or application-specific integrated circuit chip (ASIC) based.  Figure 4 shows a basic 6 GPU Mining Rig, and figure 5 shows an ASIC based, AntMiner S9 Bitcoin Miner.  GPU based mining is not as effective as ASIC based mining but is less expensive, consumes less power, and generates much less sound.  Hence, GPU mining can be done at home or in your office.  ASIC based miners have high performance but are more expensive, consume lots of power, and generate deafening sound.  Therefore, ASIC based miners are better suited for warehouses or rooms with lots of soundproofing and sound blocking amenities that also allow for lots of power consumption.
Figure 4: A 6 GPU Mining Rig

Figure 5: AntMiner S9 Bitcoin Miner

Tip: A great website to purchase pre-built GPU mining rigs is www.mining.sg or cryptocurrencyminingrigs.info.  For purchasing ASIC based miners, asicminermarket.com is a useful resource, but available units are frequently sold out!

Passive Method 2: Invest in a Mining Farm

Alternatively, for a passive income, you can invest in a cryptocurrency mining farm.  You can spend money on an upcoming mining farm endeavor.  Cryptocurrency mining farms typically are ASIC based because of the high return on investment (ROI) of ASIC based mining versus GPU based mining.   Many are located in colder climates to lessen cooling costs.  Mining farms typically mine the most established cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), etc.

Tip: If you want to invest serious money into a mining farm endeavor, it might be worthwhile for you to visit the mining location in person first.

Passive Method 3: Lease a Mining Share

For people who are not technically inclined or don't have space or time to maintain a GPU based miner at home or in their office, leasing a mining share, also known as cloud-based mining, is a viable option.  Again beware of many online scams and Ponzi schemes, especially concerning cloud-based mining.  Double-check with http://www.badbitcoin.org/ if the site is a verified cloud-based mining operation.  It is very convenient to lease a mining share temporarily.  Typically, 1 to 2-year mining share contracts is available.  Mining shares that give the best ROI are those that have minimal energy and cooling costs.

Tip: Hashflare, Genesis Mining, and Minergate are dependable cloud-based mining services.

Passive Method 4: Own a Mining Farm

If you are technically inclined and have time and space to devote, then you might consider building your own home-based cryptocurrency mining farm instead.  Home-based cryptocurrency mining farms are typically located in the garage or storage area and employ GPU based mining more often due to the lower cost involved, lower power usage, and less sound. However, ASIC based mining can be accomplished as well if the mining room has excellent sound-absorbing / proofing amenities and can support higher power consumption too.

Tip: There are some ASIC based miners specifically built for home use such as the Antminer R4 model though the return on investment with these types of miners is typically less than their much louder counterparts!

Passive Method 5: Direct Dividend Coins

A dividend is a distribution of a portion of a company's earnings.  Similar to traditional stock dividends, some cryptocurrency coins offer dividends too.  You hold the crypto coin and get regular dividends, which vary for each cryptocurrency coin.

Tip:  Here are some examples of direct dividend coins:  Neo (NEO), OmiseGo (OMG), Ark (ARK), Lisk (LSK),  and Waves (WAVES).

Passive Method 6: Exchange Dividend Coins

Exchange dividend coins are similar to regular dividend coins but supported by an official exchange.  They usually contain other perks, such as the ability to pay for various exchange fees using their official coins.  Exchange dividend coins are also an effective way to raise money through crowdfunding.

Tip: Here are examples of exchange dividend coins:  Binance (BNB), Kucoin Shares (KCS), Huobi Token (HT), and BiBox (BIX).

Passive Method 7: Staking

Figure 6: Proof of Work and Proof of Stake Illustration

Instead of Proof of Work (POW), also known as mining, you can do Proof of Stake (POS).  POW relies on proof that a certain amount of work has been done to verify transactions and was the chosen way of the first cryptocurrencies such as Bitcoin, Ethereum, and Litecoin.  POS, on the other hand, only requires participants to hold a certain amount of native cryptocurrency in a specific wallet for a specified period.  POS nodes are called "validators" instead of "miners."  For POS, no specialized computer hardware is needed to become a node.  POW nodes also tend to become centralized over time, while POS nodes tend to stay decentralized.  Furthermore, POS is much more environmentally friendly because significantly less power is used to maintain the validator nodes.

Tip: Staking, POS, seems to be the future trend for the next generation of cryptocurrency coins because of a multitude of advantages.  However, critics argue that POS might lead to centralized creation of the coins which the POW methodology prevents.  Some coins are a combination of both POW and POS methodologies.

Passive Method 8: Masternodes

Masternodes are the highest form of staking with the corresponding highest payouts, but you need to buy much more of the coin.  A Masternode is a full crypto node, a computer wallet, that supports the network by hosting an entire copy of the coin's ledger in real-time.  It also allows the user to take part in governance and voting too.  Furthermore, it enables the treasury and budgeting system in cryptocurrencies.  However, a significant drawback is that Masternodes require running your node non-stop, similar to a mining rig.

Tip: Here are sites for information on available Masternodes:https://masternodes.pro and https://masternodes.online.

Passive Method 9: Hard Forks

Figure 7: Soft Forks versus Hard Forks

A soft fork is a backward compatible method of upgrading a blockchain.  On the other hand, a hard fork creates a new permanent divergence from the previous version of a blockchain.   Hard forks are needed to add new functionality to existing cryptocurrency.  They are a great way to earn free crypto!  From time to time, there are hard forks such as when Bitcoin Cash (BCH) was developed from Bitcoin (BTC) or when Ethereum classic (ETC) diverged from Ethereum (ETH).

Tip: You can get information about an upcoming hard fork from an insider group or blog.  A few days before the expected hard fork, buy a lot of the original coin.  After the fork date, you will get the same amount of the new cryptocurrency coin!

Passive Method 10: Trading Bots

Trading bots or Algo trading or auto trading is not a new way to trade.  Institutions have been using trading bots for decades, but it is only recently that they have been made available to the broad public.  Trading bots use algorithms that are programmed to take trades on behalf of the trader.  They use various market actions to determine their entry and exit points based on such metrics as price, time, order, volume, etc.  Trading bots can also be set up to handle multiple exchanges simultaneously. Thus market arbitrage is possible.  The price to use trading bot varies; some have a one-time fee, while others use a pay-per-use or subscription-based model.

Tip: Trading bots can be a great tool to use. They can save you a tremendous amount of time, especially if you are an experienced trader, though they are quite technical to set up and require some necessary programming-related skills for advanced features, so take baby steps in using them!

Shrimpy is an excellent platform to use that allows you to manage your crypto assets stored on different exchanges automatically.

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Monday, October 7, 2019

Top 10 Active Ways to Make Money With Cryptocurrency

Scam Alert!

Now, this is critically important! Many scams are in the cryptocurrency industry! A great site to use to check if a cryptocurrency-related website might potentially be a scam is http://www.badbitcoin.org/, which has already vetted many websites, but it is not foolproof!
Due to always new investment opportunities popping up in the cryptocurrency industry, many sites might not prove to be valid, and you don’t want to fall prey as one of the initial victims! Therefore, you should always use your sound judgment! If the promised returns seem too good to be true — it probably is!

Diversifying Your Portfolio Is A Good Practice

A good practice is to diversify your portfolio — don’t put all your eggs in one basket! Practice an incremental approach, one step at a time, as you learn more and become aware of potential scams, you can invest more money. Always start with a tiny investment first! Please don’t get pressured by the hype and follow the herd because of the fear of missing out (FOMO) — go at your own pace!

Active Ways To Make Money With Cryptocurrency Requires Time And Energy

Active methods require you to devote your time and energy towards generating income with cryptocurrency, similar to a typical job or a business that you manage yourself. The good news is that there are many exciting ways to make active income with cryptocurrency. Using all my research, practical experience and the occasional run-in with scams, here are the top 10 active ways to make income with cryptocurrencies that I discovered:
1) Buy and Keep (HODL)
2) Trading
3) Cryptocurrency Payment Gateway
4) Invest in Initial Exchange Offerings (IEOs)
5) Invest in Security Token Offerings (STOs)
6) Cryptocurrency Education
7) Cryptocurrency News & Trends Subscriptions
8) Forming an Inner Circle
9) Bounty / Rewards Programs
10) Gaming

Active Method 1: Buy and Keep (HODL)

Figure 1: HODLing Cryptocurrency
The simplest, though not necessarily, the most lucrative strategy is to buy and hold your favorite cryptocurrencies, also known as HODL (“hold on for dear life”) in the community. HODLing is a long-term investing strategy that requires proper fundamental analysis. The topic of fundamental analysis is a huge one, but some basics to look out for are:
1) Company Analysis: Management has a history of success, right products, well-financed, good marketing, etc.
2) Industry Analysis: Not too much competition; government regulations are open; environmental factors are favorable, etc.
3) Economic Conditions: Are we in a bear or bull market? Are there any unforeseen economic conditions that can affect the product or service?
4) Future Profit Outlook: Will the products or services be in demand in the future? How large is the total addressable market? In what time frame might the product or service become obsolete?
After doing your fundamental analysis for a particular cryptocurrency-related product or service, and choosing your top picks, an excellent strategy to use is dollar-cost averaging. For example, if you get paid once or twice a month, you can allocate a small portion of your earnings to invest in your favorite cryptocurrency endeavor. In a few months after doing some more fundamental analysis, you might choose to rebalance your portfolio in favor of another cryptocurrency project, as well.
Tip: Coinmarketcap.com does some fundamental analysis for you already that is accessible if you view the rating tab for a particular cryptocurrency. Another good site to use is coinpaprika.com.
If you are a long-term investor, you might also want to consider storing your crypto assets in high yielding mobile wallets as a form of savings. Using the Celsius App, long-term investors can get an annual interest rate of up to 10% with some stable coins such as USD, PAX, DAI, TUSD, GUSD, and others.

Active Method 2: Trading

Figure 2: Trading View
If you are technically minded and like to look at visual charts, you might also consider becoming a cryptocurrency trader. Figure 2 shows a popular trading platform used by many cryptocurrency traders known as Trading View. Cryptocurrency exchanges are open 24 hours 7 days a week so you can perform trades anytime, unlike traditional markets such as equities. Many types of traders require different levels of both involvement and risks. Here are some of the different types of traders:
1) Trend Traders: follow the trend to buy low and then sell high
2) Swing Traders: take advantage of market volatility
3) Margin Traders: bet prices will fall so short the market instead of going long
4) Futures Traders: They hedge against volatility with fixed asking & selling prices
5) Options Traders: bet it’s going to be a buyers’ or sellers’ market
6) Day Traders: open and close multiple positions within 24 hours
Tip: Good YouTube channels to use to learn about cryptocurrency trading are Data Dash and Ready Set Crypto. They offer many free videos to learn about using technical analysis for trading.
Tip: For a listing of top cryptocurrency exchanges by volume visit https://coinmarketcap.com/rankings/exchanges/
Here are some cryptocurrency exchanges that I recommend:
1) Binance: The largest cryptocurrency exchange in the world! Now supports margin trading!
2) Coinbase: This is a prevalent cryptocurrency exchange, especially in the US, that supports fiat to crypto conversions.
3) KuCoin: This exchange allows you to invest in new coins and coins you won’t find on the larger exchanges!
4) LocalBitcoins: This exchange has a vast number of ways to buy Bitcoins and other cryptocurrencies that are sometimes even discounted from the market rate!

Active Method 3: Cryptocurrency Payment Gateway

Many retailers and online sellers now accept cryptocurrencies for payments. You can set up a cryptocurrency payment gateway yourself in your retail or online store. The model is similar to how PayPal, Mastercard, and Visa are accepted. Sellers make money with transaction fees and some margin in price. Some retailers also maintain cryptocurrency-based ATMs. You can buy real estate, cars, gold, and many other items with Bitcoin and other cryptocurrencies.
Figure 3: Some subway franchises accept Bitcoin.
Figure 4: Some retail outlets also maintain cryptocurrency ATMs.
Tip: For buying gold and silver with cryptocurrencies, I recommend goldsilver.com.

Active Method 4: Invest in Initial Exchange Offerings (IEOs)

Initial Exchange Offerings (IEOs) were invented to build more trust with investors after many shady Initial Coin Offerings (ICOs) failed. I worked on a few ICO projects as a consultant, and I can say that the vast majority of them, >95%, turned out to be scams or just had wrong business models or tokenomics. ICOs did, however, open up suitable investments to small investors. Traditionally, only affluent investors were able to partake in top tier investments. For example, say you wanted to buy some Apple or Amazon stock, this would cost you thousands of dollars to buy one share. Using ICOs allowed small-time investors to invest even a few dollars into top tier investments. IEOs differ from ICOs because they occur on an officially trusted exchange itself, so the investment offer is better vetted. Again proper fundamental analysis aids when deciding to invest in an IEO.
Tip: Binance Launchpad is a good example of a platform used by IEOs.

Active Method 5: Invest in Security Token Offerings (STOs)

Security Token Offerings (STOs) are the most regulated cryptocurrency token offerings. The security is backed by actual collateral: assets, equity, commodities, land, real estate, etc. Therefore, STOs are subjected, protected, and regulated by some national-based authority. However, due to the different definitions of securities and varying classification of cryptocurrencies as a financial asset class concerning each country, the definition of what exactly constitutes a “Security Token” is still debatable.
Tip: For a listing of upcoming STOs, visit https://tokenmarket.net/security-token-calendar/.

Active Method 6: Cryptocurrency Education

Figure 5: Many online and offline courses now offered about cryptocurrency.
Many websites now offer cryptocurrency education for a fee. There are courses on Udemy.com and Lynda.com on investing and trading cryptocurrencies. Once you gain knowledge and experience, you can teach people about cryptocurrencies yourself by using books, e-books, webinars, seminars, etc. However, there are still many free ways to learn about cryptocurrencies, especially on YouTube.
Tip: I recommend the YouTube channels, Data Dash and Ready Set Crypto for free learning and the AMTV Bitcoin academy, a paid service.

Active Method 7: Cryptocurrency News & Trends Subscriptions

Figure 6: Trends in the cryptocurrency industry are popular subscriptions.
Professional crypto traders and investors are interested in the latest news & trends to make informed decisions. Many online venues offer up to date news and trends, usually for a monthly based subscription. In return, you get daily or weekly newsletters and membership to some online community with live training and chat available. If you like to do market research, like social media and are a talented technical writer, then this might be a sufficient income option for you.
Tip: For subscription-based services, I recommend Ready Set Crypto and The Dollar Vigilante.

Active Method 8: Forming an Inner Circle / Joining a Signals Group

Figure 7: Buy the rumor and sell the news.
Another good strategy that you can employ is to form an inner circle or join a signals group. You can join a private WeChat, WhatsApp, Telegram Group, etc. Some of these groups are free, and some require payment. Usually, in these types of groups, you get what you pay for in terms of price. In joining these types of groups, your goal is to hear rumors before the rest of the retail traders do. In this way, you can buy the rumor when the prices are still very low and then sell the news when the prices are at a peak. You can start your private chat group with your most informed and connected contacts that can give you buy and sell signals.
Tip: A strategy that I like to use is following different channels on Twitter, Facebook, YouTube, and Telegram on investments and topics that I’m most interested in learning. I then view the posts that generate the most buzz.

Active Method 9: Bounty / Rewards Programs

Figure 8: Coinbase Earn allows you to earn crypto while watching educational videos.
You can also earn crypto by performing specific tasks. For example, you might write a positive review, create a cool logo, answer trivia questions, etc. You might also be able to receive free crypto by participating in token airdrop campaigns.
Tip: My favorite cryptocurrency reward program now is on Coinbase Earn. You watch videos on various cryptocurrency projects, answer questions, and then receive free coins in return.
The Brave browser lets you effortlessly earn cryptocurrency just by surfing the net and joining reward programs too!
Crowd Holding, which is currently in Beta as of this writing, is an open innovation platform empowering anyone to earn rewards, and entrepreneurs to get insights from key stakeholders, employees, and consumers.
PublishOx is a great way to get paid in crypto for reading and writing blog articles!

Active Method 10: Playing Games!

Figure 9: Minecraft was one of the first games to use BTC as an in-game currency.
Last but certainly not least, you can earn cryptocurrency by playing games! Now here is a real story; I once met a guy who became a Bitcoin millionaire by playing Minecraft. The story goes is that he was playing the game a lot during his college days and accumulated a lot of Bitcoin as the in-game currency. Then he got a serious girlfriend, so he didn’t play the game for a long time. Many years later, he logged in and found out that he still had all those Bitcoins, but they were worth tremendously much more, so he was now a Bitcoin millionaire!
There are many games now that use cryptocurrency as the in-game currency. For example, in Ether Quest, you compete with other players for Ethereum. As of this writing, on the Apple store, good games for earning crypto are Alien Run, Storm Play, Free Bitcoin, Bitcoin Aliens, and Blockchain.
Tip: Have your little cousins or kids use your game account to earn you crypto! It’s the best of both worlds; they are kept busy and enjoy while you make some crypto on the side!
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