In last two years cryptocurencies were the most profitable financial investments. As many people reached their financial independence, a lot of people lost their money by making wrong investments decisions. Not everyone is a good trader. Also the volatility of the crypto markets can be a serious obstacle even for experienced traders. Fortunately you don’t have to be a trader and still benefit from the crypto world. Crypto world offers various ways to earn passive profits with interest exceeding any conventional banking products. The article is summarizing last few months of my research on passive ways generating profit with cryptocurrencies:
- Mining - is a process of validating transactions in order to write it to the ledger (blockchain)
- Cloud Mining - renting mining rigs from others
- Physical Mining - buying and maintaining your own rig
- AutomatedTrading
- Bots - peform trades 24/7 on your behalf
- Copying Trades - following experienced (or not) traders
- Staking: Similar to dividends on a stock market, holders of a coin can get rewarded with extra coins
- Airdrops: Similar to staking, but not as predictable
- Lending: Some platforms allow lending coins
- Masternodes: Locking a number of coins for particular time
- HYIP High Investment Yield Platforms: Promise very high ROI for investing in their services
You should always think about your investments in terms of risk and profit. Remember, this is crypto, invest only money you can afford to lose!
It’s my own scale in which I rated risk from 0-10 and profit from 0-10, where 0 means least risky or profitable, and 10 is the most risky and profitable.
Airdrops
Some coins give back dividends to their community. Sometimes it is in the form of the same currency or some other one.
| Risk | Profit | ROI |
|---|---|---|
| Risk: 1 | Profit: 3 | ROI: 5% |
Example:
RedPulse giving back GAS to token sale contributors
Risk Factors Cons:
Free money it’s great, but unpredictable. It's as likely as walking on the street and finding a $100 bill.
Referrals
Most of the websites related to crypto offer some kind of referral systems. You are getting rewards from attracting new users to sign up using your referral. For example Binance offers discounted trading fees for users signed up under your referral. YouTube stars promoting websites like bitconnect.co are getting hundreds of thousands dollars in referrals.
| Risk | Profit | ROI |
|---|---|---|
| Risk: 1 | Profit: 5 | ROI: 1000% |
Examples:
Bitconnect:
Binance:
Risk Factors and Cons:
Big competition, it’s not typical passive profit because it requires your involvment in getting new people signing up using your referreal link. Risk of being accused of promoting ‘scam’.
Lending
Lending can be very profitable, and it’s one of the lowest risk investments.
| Risk | Profit | ROI |
|---|---|---|
| Risk: 2 | Profit: 5 | ROI: 20% |
Examples:
CoinLend.org - simplifies lending process, and automatically renews the offer using current interest rate:
Poloniex: One of the most well known exchanges:
https://poloniex.com/Bitfinex: One of the biggest exchanges, recently it stopped working with US individual customers
https://www.bitfinex.com/
Risk Factors and Cons:
Only selected currencies can be lended. There are limited number of places you can do it. You need to make sure that you are using legitmate exchange/lending portal.
Staking
Staking is similar to mining but doesn’t require expensive hardware and electricity. The main role of staking is to confirm transactions, help to secure and maintain the network of the coin, and provide liquidity. It can be very profitable, some staking coins can have ROI up to 10000%! Your coins are staked as long as your wallet is up and running. The process is random but favors users with most amount of coins.
| Risk | Profit | ROI |
|---|---|---|
| Risk: 3 | Profit: 6 | ROI: 10000% |
Examples
- XGOX ROI up to 5000%
https://coinmarketcap.com/currencies/xgox/
block 70.000 to 100,000 1000% [500 superblocks 5000% every 10.000 blocks]
100.000 to 105.000 5000% 105.000 to 150,000 1000%[500 superblocks 5000% every 10.000 blocks]
150.000 to 300.000 2000%[500 superblocks 5000% every 20.000 blocks]
300.000 to 305.000 5000% 305.000 to 500.000 1000% [500 superblocks 5000% every 10.000 blocks]
500.000 end 10000% halving every 100.000 blocks
- HOLD ROI up to 7200%
https://coinmarketcap.com/currencies/interstellar-holdings/
Blocks: ROI
2500 – 10000: 2500%
10000 – 25000: 5000%
25000 – 80000: 750%
80000 – 130000: 1000%
130000 – 170000: 2000%
170000 – 190000: 3600%
190000 – 200000: 7200%
Risk Factors and cons
Only selected currencies enabled staking. High ROI staking coins have high inflation that’s causing price reduction and dramatical drop of potential profits.
Your wallet needs to be up and running 24/7. Sometimes when there is a lot of people staking it’s hard to achieve a weight that allows you to generate profit.
Masternodes
The idea behind Masternodes are similar to staking, they secure the network. There is one big difference though. To operate masternode you need to lock particular number of coins in it. For example Neutron coin requires 25000 coins. Owners of Masternodes are getting their rewards as long as their wallets are running and they have a minimum threshold of coins.
| Risk | Profit | ROI |
|---|---|---|
| Risk: 3 | Profit: 5 | ROI: 300% |
Examples
http://masternodes.pro
https://masternodes.online/
DASH - ROI 5%
NTRN - ROI 72%
Cons and risk factors
Long term investment, coins are locked for a long time. The profits of masternodes might be less than potential loss of value of the coin.
Mining
Mining is the process of adding transaction records to Bitcoin's public ledger of past transactions. [Wikipedia] To start mining you need to buy a “mining rig”, expensive computer hardware that requires a lot of electricity. It’s not immune on price fluctuation, if your coin goes up it might very profitable, if it goes down your might incure loss.
| Risk | Profit | ROI |
|---|---|---|
| Risk: 4 | Profit: 4 | ROI: 100% |
Examples:
- Bitcoin
- Ethereum
- Ethereum Classic
- Litecoin
Risk Factors and Cons
Requires expensive hardware, mining profitability declines very quickly, high cost of electricity, frequent upgrades might be needed.
Cloud Mining
Similar to traditional mining, but it doesn’t require from you buying and maintaining expensive hardware. Most of the time cost of electricity is included into the price of the contract. The contract is time based. Convienience has it’s cost, prices per hashrate might be higher comparing to buying or putting together your own rig.
Examples
- genesis-mining
Risk factors and cons
Higher price per computing power than physical mining.
Automated Trading
There are several different kinds of automated trading platforms. Some of them allow coping other traders, others using more sophisticated bots with machine learning algorithms.
| Risk | Profit | ROI |
|---|---|---|
| Risk: 5 | Profit: 3 | ROI: 100% |
Copying Trades
- 1broker.com
Bots
- TBA
Risk Factors and Cons
It’s difficult to find a reliable bot, or a good trader to copy to trade. Past performance is not indication of future profits.
HYIP
Investing in crypto currencies is risky. But HYIP (High yield investments programs) are the riskiest kind of investments out of all of them. Their business model varies, but in most of the cases is less or more transparent variation of ponzi schemes. If you get in early you can be very rich, if you are late you will lose it all.
| Risk | Profit | ROI |
|---|---|---|
| Risk: 10 | Profit: 10 | ROI: 1000% |
Examples:
Bitconnect.co
Chain.group:
Cons and risk factors
Extremely profitable but also very risky. A lot of those platforms don’t last long. If you get early you can be extremely rich, if you are late you can lose it all. Look at example of bitpetite.com or laser.online