What have I done!? - sobs
Let's get Passive.
I've had this thing with passive income for some time now, and have been chasing this goal for awhile now.
Tried many many different strategies in reaching this particular end. And today I will start to share some of them with you.
Just so you don't make the same mistakes I did investing in some dodgy cloud mine, or hardware that never pays itself off.
Today we will be covering a few methods.
- Masternodes
- Staking
- Bots
Masternoding it up.
When running a Masternode. You are part of the network infrastructure of a particular coin. You help secure the network, provide a service (like coin mixing, anon send, hosting apps and so on) and in return you get some coins.
Advantages:
- Nice & passive. Once set up you can leave it going for the duration.
- Fairly predictable. By calculating how many coins are produced per day/week/month and dividing that by the amount of nodes online, you can estimate how much reward you will get, rate of return, and so on.
- You own a coin/token that can appreciate in value. If the price of the base-pair (usually btc) or if the coin itself increases in value. You can absolutely make more money just holding the coins on the Masternode compared to the produced coins.
- Controlling multiple Masternodes from a single wallet is a possibility so this makes leveraging multiple nodes together possible.
Disadvantages:
- Some coins have a rather high collateral requirement, for example Dash and NEM. Masternodes can run into the tens of thousands of dollars.
- Risk that the coin you back drops in value.
- Return gets diluted by many new nodes coming online.
- Ongoing cost if you hire a VPS to maintain 24/7 operation.
- Some technical skills required.
All in all it is my opinion that running Masternodes can be a very profitable and quite passive venture, but please, remember to DYOR before investing!
Get your Stake on.
Staking has been around for some time. The easiest way for me to explain the concept of staking is in two ways. First is, it's somewhat like an interest rate on a traditional bank account. You have X amount of coins, you generate a certain amount of new coins each day/week/month, usually a percentage of your total, but some are fixed amounts.
Alternatively it is like a lottery, where each token/coin is similar to a lottery ticket. If your number is chosen, you are awarded with the 'win' (The block reward) and the network continues on. The more coins you hold, the more tickets you have, and the better chance you have of 'winning'.
This was developed as an alternative to the rather centralized, hardware, money, space and electricity hungry method called PoW, oh and lets not forget all that hands on maintenance cleaning that hardware, sending it off to be replaced upon failure and setting it all up!
In order to stake a coin, all you have to do is hold some amount of them in a (usually running) wallet, and wait. Sometimes a long time, sometimes a short time. Due to the probability involved in the selecting of the 'winner', you can even stake multiple times in a short duration, or perhaps be waiting only a little while! Best way to mitigate this is to get a couple more 'lottery tickets' or in this case, more coins!
Best part is you don't burn the tickets by using them, they just stack up higher and higher! Very cool.
Advantages
- Easy to understand, easy to deploy.
- No need for additional cost of a VPS, most staking wallets only use a small amount of resources and can be run on something as small as a Raspberry Pi.
- Simple to manage, no need for multiple wallets in a single coin as like Masternodes.
Disadvantages
- Possibility of an attack by someone buying up a majority share in a coin.
- Can lead to further centralization of the value store due to 'whales' staking all the coins.
- Leaving a large amount of coins in an active wallet can be distressing!
Personally I find staking and masternodes to be some of the most secure and safe ways to achieve financial independence through passive income. I throw a 100% vote behind the two of those methods.
Of Man and Machine.
Now for one of the favorites, one of the most powerful but in my opinion slightly riskier method of achieving passive income generation.
The Bot.
Many people have heard of the term, daytrader. A flat out no holds barred user who sips coffee through an IV line and smashes Polo or Trex a few minutes a day flipping those coins and making bank.
Now imagine if you could do that, 24/7, 365 days a year, tirelessly seeking profit and never selling at a loss.
Well this is where the bot comes in.
There are many popular bots out there, leonardo, hassbot, gunbot, c.a.t and more. I am not making a suggestion for any of them, actually my suggestion involves figuring out your own 'winning' strategy, and automating it.
When more people are doing the exact same thing (In the trading world anyway), this actually makes that 'method' less effective. So I suggest working out a winning strategy, finding a knowledgeable coder who you trust, and having a bot made up. I suggest staying away from pre-compiled binaries and running your own code in say node or python. This lowers the attack vector.
Advantages
- Fastest way to earn (in my opinion).
- Customization to the current trading environment. (if built right)
- Easily adaptable and scales out to any amount of value or coins chosen.
- Relentless, logical, never sleeps.
- Never trade at a loss!
Disadvantages
- Leaving coins on an exchange to trade with is a risk factor.
- Bot may go rogue and end up blasting your bankroll on something. (If controlled by third party or has a bug in the code intentional or otherwise)
- Endless configuration and steep learning curve.
My opinion is that the best strategy involves using all strategies, and running a bot is one part of my multi-pronged approach to passive income. Very exciting stuff.
Now for the finish!
I wonder if you made it this far.. Because if you did I have something special for you. As I keep an ear to the ground and an eye on the radar sometimes I see an up and comer that has some potential, or a long shot that could make some coin. I urge you to do your own research and only invest that which you are comfortable to leave for some time (until you make a profit! then SELL SELL SELL!!).
I suggest to you, Exclusive coin, otherwise known as EXCL.
Two of the most important things you will ever look at as a trader are the market depth and the price/volume charts. As you can see the price stayed fairly constant for the longest time. Now interest is picking up, I am are seeing volume / demand, and as a result the price is indeed increasing due to demand being greater than supply. Speaking of supply this particular coin has a very low coin cap which I find quite interested, scarcity has its own value.
I could dive into a math hammer approach about how there are less coins compared to others, and the price of the other coin is such and such, and give you compelling reasons to invest. However, this doesn't really interest me and will likely cause you to glaze over. So let's come at this from another approach. The most important thing in Crypto (again my opinion), is having a diverse portfolio, given the data above I believe that there is reason enough already to pick up a few of those so very exclusive coins. If you would like to learn more here are some links.
- https://bitcointalk.org/index.php?topic=771755.0
- http://exclusivecoin.pw/
- https://bittrex.com/Market/Index?MarketName=BTC-EXCL
Diversify your portfolio, never go above 10% into any one particular coin. And think about picking up some elusive exclusive coins because I believe it's a solid choice. And always DYOR DYOR DYOR!!!
Thanks for taking the time today dearest readers.
I hope you have a fantastic day, much love. <3
