Cryptocurrency has been a hot topic the past few years as speculators have made — and lost — fortunes while academics and pundits argue about the long-term viability of the asset class.
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Every time crypto seems to be on the way out, resurgent demand seems to flood the market yet again. In late February, for example, Bitcoin topped $60,000 yet again, bringing it to within striking distance of its all-time high of $68,789.
With any asset that’s increasing in value, investors want to know how they can profit. While cryptocurrency is volatile and not for everybody — even supporter Mark Cuban says crypto is a “Hail Mary” — there are ways you can use it to generate passive income while you sleep. Here’s what you need to know.
Mining
Cryptocurrency miners are the backbone of the entire network. Miners validate transactions and are essential to keeping the blockchain secure and decentralized. But it requires specialized equipment, such as application-specific integrated circuits or graphics processing units, and a whole lot of energy computing power. However, if you’re successful at it, your machines can effectively do the work for you, providing rewards in the form of cryptocurrency itself.
Make no mistake about it, mining cryptocurrency for passive income requires a lot of money and machinery and it’s not for everyone. But if you’re successful at it, you could earn a lot. ZipRecruiter says the average miner earns about $56,000 per year, but if you’re the one putting in all the energy and computing power and you expand as you become profitable, you could theoretically earn a lot more. Just know that there are lots of barriers to entry for smaller producers.
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Staking
Crypto staking is a much easier and less-intensive way to earn passive income than through crypto mining. If you want to stake crypto, all you have to do is hold a certain amount of specific cryptocurrencies in your wallet. If you agree to “staking” your crypto, the blockchain puts it to work, verifying transactions via a consensus mechanism known as…
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