Any form of passive income is amazing. Blockchain Technology has ushered in a number of ways for you to earn passive income with bitcoin and other crytocurrency in Nigeria. This Technology has nice streams of passive income, and cryptocurrency should be on your radar.
Earning online passive income was never easy, but with the advent of Blockchain, Bitcoin, and other cryptocurrencies, things have clearly changed. However, the ‘easy’ income opportunity has also led many to fall for scams.
In 2017, there existed so many scams like Bitconnect scam, Tezos scam etc. They are not news anymore and just so you understand the sheer magnitude of such crypto scams.
To make it clearer, it is not easy to spend a lot of time trying to educate yourself on this latest revolution.
However, we at Joncyn understand that not everyone has the time for due diligence and that is why we go the extra mile by presenting our research to you.
That, however, doesn’t mean you should follow us blindly. You should DYOR (Do your own research) but you can very well bank upon us for a head start in the right direction. Importantly, read our disclaimer.
In this write-up, we will discuss various legitimate ways to earn passive income and making money from Bitcoin and cryptocurrency in Nigeria on a very high-level.
Cryptocurrency has a very lucrative return on your investment. Even stock market professionals are beginning to take notice of this source of investment. For instance in the year 2017, Bitcoins have skyrocketed from $1000 (365,000 Nigerian naira)to nearly $20,000 (approximately 7,200,000 Nigerian Naira) in a single year.
The blockchain and digital currencies may very well be the future. You may not be inclined to make cryptocurrency your sole investment in Nigeria, but it can certainly serve as a lucrative source of passive income.
Here are ways to make bitcoin and other cryptocurrency one of your passive income sources in 2018.
1. Holding (#HODL)
This is one of the easiest ways of earning passive money from bitcoin and other cryptocurrencies. You just buy the good cryptocoins and hold them. By good coins, we mean coins that have good fundamentals and have a use case that shows that its value is bound to increase over a period of time.
Now the big question: How to identify coins with good fundamentals?
Well, this is where Joncyn can help you to head start in the right direction. We regularly keep covering the coins that we think have great fundamentals and a better future. Take look at our coverage below, but also understand that this is not an investment advice.
- Binance Coin
You should ideally hold such coins for anywhere between 6 months to a 2-year period and take out your principal amount from the profits you are generating on the go!
This is popularly also known as HODL.
2. Mining for Cryptocurrency
This is a digital throwback to the gold rush days of yesteryear. Instead of shovels and pickaxes, you will be mining with modern tech. Utilizing hardware CPUs you can begin your cryptocurrency mining at home.
Mining cryptocurrencies like Bitcoin, Litecoin, Ethereum or Monero is another profitable avenue from which you can earn passive income.
However, mining of Bitcoin or other profitable coins is rather difficult. You also need powerful equipment like ASICs or GPU rigs to mine these coins profitably.
For example, Application Specific Integrated Circuits (ASICs) to mine for Bitcoins. The key to passive income that works when mining for cryptocurrency is to purchase the hardware at good price and have a cheap electricity bill.
Also, expenses on electricity and cooling equipment are huge. Because of such entry barriers, the task of mining has become limited to mining farms or cryptocurrency mining professionals.
There are some cloud mining services out there that claim revenue generation for their clients but their terms and conditions don’t look profitable at all. So choose your options smartly.
Let’s dig into how you can set-up your own cryptocurrency mining operation for a digital passive income.
Tech Skills is a Plus, But Not Necessary
Mining for cryptocurrency definitely has passive income potential. But those knowledgeable in tech, hardware, and encryption will find it easier to begin mining process. Those without tech skills will need to research mining in-depth to get started. Cryptocurrency mining is continuous, not a set it and forget it way to net passive income.
Your hardware will be at the core of your cryptocurrency mining efforts. This is a computer dedicated to mining. There are a variety of mining set-ups you can use, but the best ones will net you the most and fastest profit.
For example, good mining hardware will cost you well over N175, 000. An average miner could net you about N35,000 per month. This will be a good indicator of how long it will take to get that return on your investment.
If you don’t have a wallet yet, you will need one once you begin mining. With a cryptocurrency wallet, you can send and receive digital currency. Be sure to look into wallet features, like amount and payment limits, as they do vary.
Once you have your hardware and wallet set up, get your mining software which is a client that can manage your mining process. This client or software can ensure your mining set-up is working effectively.
One of the most important aspects of mining cryptocurrency for passive income is that you continuously update your hardware and make tweaks to your mining process. The more up-to-date, the more profitable mining.
3. Look for Crypto Forks
When people decide their cryptocurrency coins are no longer that great, they will develop a new form of it. This allows you to get a one-to-one crypto exchange from the old one. A recent example of this is when Bitcoin forked to make Bitcoin Cash and Bitcoin Gold.
Here’s how to increase your passive income trickle by capitalizing on crypto forks.
Get In Before the Block Height
If you get into a cryptocurrency before a block height will automatically become equal parts of the new forked digital currency.
A few important crypto fork aspects to consider are:
- You need your balance recorded prior to the snapshot block happens.
- Once the block is recorded to the blockchain you can move your currency.
- Keep access to your wallet’s private keys to access the forked currency.
Once everything is recorded, you simply wait for the new chain to launch, which is up to the developers.
Waiting for Launch
There are a few important things to remember while waiting for the forked currency to launch. The process of a forked coin going live can take weeks or even months. In this time period, you may want to trade away your cryptocurrency, but remember that you are trading away the yet to be released forked currency as well.
Claim Your Coins
Once the forked currency goes live, you can claim your coins. The developers of the new forked currency will announce the launch. When this happens, you will need to create a wallet for your new forked currency using the private keys.
It is also important to not claim your coins to fast. You want to ensure that the coin has replay protection. This will keep you from losing any cryptocurrency in the wallet. Let other test it out and then claim your coins.
4. Take Advantage of Cryptocurrency Airdrops
Cryptocurrency airdrops happen when developers of specific cryptocurrency coins distribute more of the digital currency. This happens for a variety of reasons, but mainly to thank holders of that specific coin type for something they do, or just being involved.
To take advantage of cryptocurrency airdrops, you need to hold coins from the relevant blockchain in your wallet. For instance, if the company or organization doing the airdrop has Ethereum, you will need Ethereum.
Airdrops are giveaways that happen at a scheduled time, and when the time arrives the project coordinators will take a snapshot of the blockchain. If you hold say Ethereum at the time of the snapshot, you will get a number of free tokens.
Organizations like the Blockchain Education Network will often organize airdrop events simply to raise cryptocurrency awareness. These events are a great way to get some passive income rolling in while also bettering the digital currency industry.
5. Become a Masternode
Masternode is simply a cryptocurrency full node or computer wallet that keeps the full copy of the blockchain in real-time, just like you have Bitcoin full nodes and is always up and running.
Apart from being up and running, it also does some special tasks in certain cryptocurrencies and in exchange for doing these tasks, masternode owners are incentivized.
For running masternodes, different cryptocurrency projects have a different minimum number of coins, as a requirement to start.
- One needs a minimum amount of coins of that particular cryptocurrency. (For DASH MasterNodes you need 1000 DASH units and for PIVX MasterNodes you need 10,000 PIVX units) so this minimum number varies from cryptocurrency to another.
- One needs a VPS or server to host that wallet for 24 x 7
- One needs a dedicated IP address for that
- One needs some storage space to save the blockchain
Note: Beware of scammers because not every coin is worth buying and running a masternode.
The infrastructure of cryptocurrencies is essential. Helping out by securing the network of digital currency can net you a very nice passive income. This is achieved by running a masternode. You simply put your masternode in place and let the server run, thus continually netting coins for your help.
Before becoming a masternode, it is essential to know the about the best masternodes, how to be profitable as a masternode as well.
To recoup your masternode investment and begin earning a passive income, you will need to know the ROI of a masternode.
The ROI depends on:
- Price of bond
- The block reward
- The number of masternodes in operation
- Cost to host
- Tax requirements
- Selling price of mined tokens
- Selling price of bond
Next, you need to know what masternode to invest in. Masternodes provide very important network services, and they can be used to do a number of things, so it is important to do a bit of research.
Question to consider include:
- Can the coin be used for anything else outside the masternode?
- What is the demand for the coin?
- What is the number of coins needed to operate the masternode? Is it fixed?
- Are current masternode operators happy?
- Is it centralized or decentralized?
- What are the returns?
- Any block rewards in the future?
6. Go for Capital Gains
Capital gains are often overlooked as a passive cryptocurrency income source. Since the market price is strong, some say it may just be a bubble and risky. Whatever the risk, investing part of your cryptocurrency budget into coins that are not doing as well could pay off in the long-term.
The cryptocurrency market can change at any moment. To capitalize and get the most of your capital gains, you should always be tuned-in to the digital currency industry. This will allow you to identify currencies that have dropped significantly but are predicted to increase down the road.
For example, Bitcoin (BTC) took a nosedive by nearly 80 percent since December 2017. This would have been a moment to buy because your investment would have netted a very nice passive income.
Keep an eye on major cryptocurrencies like Bitcoin, Ethereum, Stellar, NEO, NEM, and Ripple. Also, don’t be afraid to research Bitcoin Gold, a fairly recent forked currency that has a low investment currently.
7. Invest in Lending Services
Just like the present traditional bank structure, you can invest in lending services to get a return on your principal capital. How? Well, with cryptocurrency you are your own digital bank in a sense.
This can generate a nice passive income stream, but be wary of lending services that have poor reviews. There are a lot of scams out there, so do your due diligence before investing in lending services.
Dedicating 100 percent of your funds to cryptocurrency lending services wouldn’t be a wise move. It is important to diversify your cryptocurrency passive income investments, just as you would a stock portfolio. There are plenty of pros and cons to weigh, whether you’re investing 10 percent or 60 percent of all your funds.
Lending services advantages include:
- Easy to generate passive income with automated services that are generally not time-consuming on your part.
- Cryptocurrency lending services are generally low-risk investments.
- There is a much higher APR than keeping your money in traditional financial institutions.
Disadvantages of lending services are:
- Lower returns, so expect a very slow passive income trickle with this strategy.
- Capital is tied up so you may miss out on other investment opportunities that arise.
- The exchange can be hacked or close, and you will lose all your investment.
8. Staking for Passive Digital Income
Staking is another superb way of earning in the cryptocurrency space. In this method, you simply need to buy and hold your cryptocurrency in a special wallet to earning regular dividends or profits on it.
This method is usually employed by proof of stake cryptocurrencies because, in this way they reward the stakers and secure the blockchain as well.
In this method, you need to keep your wallet online most of the time to earn those dividends and these dividends are paid out in the native cryptocurrency called the staking reward.
Some coins that you can stake are:
- NAV Coin
- Komodo etc..
Similar in nature to dividends you can create a stake, or proof of stake by leaving your digital wallet open. In return, you will net a nice percentage of the cryptocurrency you stake.
For instance, Neblio has a ten percent return on your annual holding amount. This gives you a passive income trickle on your monthly percentage return.
- Unlock your wallet. To stake, you will need to unblock your wallet if encrypted. A locked wallet will not stake. One of the biggest benefits of staking is that once your wallet is unlocked, it will stake for you automatically.
- Know token age. Token age is simply the age of your tokens. When tokens are staked and sent to another address, the token age is reset to zero.
- Minimum and maximum token age. The minimum token age you should aim for is 24 hours. The maximum token age is seven days. After seven days pass your tokens stop acquiring weight.
Stake is only rewarded based on token age, rather than calendar age. Let’s say you have 5,000 NEBL with a calendar age of 6 months. Regardless of how long you’ve had the stake, the maximum token reward is for seven days. This incentivizes users to keep wallets open and secure the network.
Staking Neo: Earn GAS by holding NEO
NEO is a blockchain platform that allows for the creation of smart contracts. Often referred to as the “Chinese Ethreum”, NEO has managed to establish itself as one of the most promising blockchain projects in the market today.
Fortunately for NEO investors, it also provides the opportunity to earn passive income as NEO holders receive “free” Gas tokens for helping to run the network. To receive Gas, NEO holders need to have their cryptocurrency in an official NEO wallet. Some exchanges, such as Binance, also credit Gas to NEO holders.
Proof-of-Stake (PoS) cryptocurrencies provide an excellent means of generating passive income in the cryptocurrency space. Proof-of-Stake coins allow users to receive new coins for “staking” their coins in the digital currency’s official wallet to secure the network. Proof-of-stake is a consensus mechanism that, unlike Proof-of-Work, does not require high computing power.
Private Instant Verified Transactions (PIVX) is a privacy-centric community-focused cryptocurrency project that has gained in popularity in 2017. PIVX allows you to carry out private, fast, and secure transactions and gives its users the opportunity to earn passive income through staking their PIVX coins.
I have just narrated how you can earn passive income with Bitcoin and other Cryptocurrency in Nigeria. Generating passive income with bitcoin and other cryptocurrency is an excellent way to supplement your monthly earnings in Nigeria. Fortunately, for digital currency users, there are several ways through which you can generate passive income with cryptocurrencies.
It might look like earning money from Bitcoin and cryptocurrencies is very easy. Easy it is if you do your research and put in your fair share of hard work.
Similarly, this line of earning has its own pros and cons, so beware, focus on self-education and always DYOR to avoid getting scammed.
Are You Ready to Make Cryptocurrency Passive Income?
Passive income is great, and earning a little more every month with cryptocurrency is definitely doable. However, be sure to do your homework and invest smart. Yes, the digital currency market is booming, but that can change while you sleep. Any investment is risky. It all depends on your unique comfort level.