Love it or hate it, cryptocurrency—and more generally, blockchain—is a revolutionary technology that’s shaking up the world at the moment.
And while there are countless stories about people making it big from investing in Bitcoin or some other coin that blew up, this new tech also gives us a slew of new ways to earn passive income online.
Here’s 9 ways to do just that!
In each case, I’ll list what you need to get started, a risk score (a higher risk score means higher risk), and my own personal rating.
And if you want to browse some more… conventional ways to earn passive income online, check out the Resources page.
Passive Income with Bitcoin
Starting off with the most well-known and the most valuable cryptocurrency, Bitcoin (BTC). If you don’t have a Bitcoin wallet yet, it’s pretty easy to set yourself up with one by using this helper on bitcoin.org.
1. Freebitco.in Faucet
Risk Score: 0/5 (slightly higher if you deposit your own BTC)
What you’ll need: An email address, and a Bitcoin wallet address if you want to withdraw.
A Bitcoin ‘faucet’—a site that pays out small amounts of BTC at fixed increments—that boasts over 14 million users.
Every hour, you roll a number between 0 and 10,000, and win up to $200 worth of Bitcoin based on the result. It takes only a few seconds, simply solve a captcha. Each roll also rewards you with free entries to a weekly lottery, and reward points which can be redeemed for more BTC or other goodies.
I recommend this faucet in particular, because it offers interest on balances over 0.0003 BTC. You can even deposit BTC into your account to take advantage of this interest.
Earning Potential: Up to $200 worth of free BTC every hour (though you’ll rarely hit the jackpot), plus 4.08% annual interest on balances over 0.0003 BTC.
My Rating: 3/5. I’d recommend everyone use Freebitco.in simply for the free chance to win $200 every hour. The only reason the score isn’t higher is that the bigger rewards are chance based, and the interest payments aren’t as high as alternatives.
You can sign up here if you’re interested.
2. BlockFi Interest Account
Risk Score: 1/5
What you’ll need: A Bitcoin address (or an Ethereum address), and I.D. to verify and start using your account. Some BTC, ETH, or GUSD.
A cryptocurrency savings account, of sorts. Store Bitcoin, Ether (ETH) or Gemini Dollar (GUSD—pegged to the US Dollar, you’ll need a Gemini account to get some though), and receive compounding interest paid monthly. There are no minimum deposit requirements, though in the case of BTC and ETH the interest rate changes when your account holds more than 10 BTC or 200 ETH.
If you want exposure to the wild price swings associated with cryptocurrency, then the BTC or ETH accounts are ideal. If, however, you feel it’s too risky, then opt for the GUSD account instead, where you’ll essentially be holding USD in a high-interest savings account.
Earning Potential: (At the time of writing) 6.2% annual interest for the BTC account, 3.3% for ETH, and 8.6% for the GUSD account.
My Rating: 4/5. A fantastic way to earn interest on your cryptocurrency holdings, while also offering a great and low-risk way to beat the minuscule interest rates offered by banks.
You can sign up here if you’re interested.
Buying and Selling Cryptocurrencies
There are many online exchanges that allow you to buy and sell cryptocurrencies with your traditional currency. Coinbase and Gemini are the ones I’d most recommend, but others such as Binance and Kraken offer similar services. Use whichever is the best for you!
Passive Income with Ethereum
The second most valuable cryptocurrency by market cap, and the most valuable smart contract platform. Ethereum (ETH) allows for the creation of tokens, apps, games, and collectibles, which also means it comes with many interesting ways to earn passive income.
In each case, there’s a small underlying risk that a smart contract will contain an undiscovered bug or exploit. Most applications here, however, have had multiple security audits to mitigate that risk. It’s just something to consider.
To interact with most applications, or to store your ETH, you’ll need a browser-based extension. MetaMask is the most popular extension for this.
3. Compound Finance
Risk Score: 2/5
What you’ll need: An Ethereum wallet extension like Metamask. Some ETH, DAI (recommended), or any other asset that is listed on the platform.
Automated and easy-access peer-to-peer lending. Earn interest for lending a range of Ethereum-based tokens on the platform, with instant withdrawals. Interest is paid per Ethereum block, so approximately every 15 seconds.
While there are other options available such as BlockFi that offer higher interest for ETH, Compound offers a wider range of asset lending, including the US Dollar-pegged DAI token (most recommended for low risk but high interest rates), as well as instant, feeless withdrawals.
Earning Potential: Varies per asset and according to supply and demand. (At the time of writing) 0.4% annual interest for ETH, 9.20% for DAI, 4.91% for USDC, and more.
My Rating: 5/5. One of the best ‘decentralized finance’ applications out there. Highly recommended if you want high interest rates on a wide range of assets.
You can get started here if you’re interested.
4. dYdX Lending
Risk Score: 2/5
What you’ll need: An Ethereum wallet extension like MetaMask. Some ETH, DAI (recommended), or USDC.
Similar to Compound Finance, dYdX is a peer-to-peer lending platform that is purely smart-contract based. dYdX offers trading, lending, and borrowing for ETH, DAI, and USDC.
Whether you use dYdX or Compound Finance will likely depend on which offers a better interest rate. Since both offer instant withdrawals, there’s also an opportunity to continuously move your assets to the better paying service.
Earning Potential: Varies per asset and according to supply and demand. (At the time of writing) 0.09% annual interest for ETH, 10.54% for DAI, and 4.41% for USDC.
My Rating: 4/5. Another great decentralized finance application on Ethereum. dYdX offers a more limited asset pool than Compound Finance, but does serve as an exchange as well.
You can get started here if you’re interested.
5. Proof of Weak Hands 3D
Risk Score: 4/5.
What you’ll need: An Ethereum wallet extension like MetaMask. Some ETH.
A highly satirical token exchange that supposedly works in 3 dimensions: the price of ETH, the price of the P3D token, and the dividends it pays.
The price in ETH is set by the contract based on the number of tokens in existence. Every transaction of the P3D token is taxed 10% (buying, selling, and transferring); which is then paid out, proportionally, as ETH in dividends to its token holders. Other apps have therefore been programmed to plug into the P3D ‘ecosystem’—which has handled more than 1.2 million ETH—to drive volume.
Since your earnings through the app are beholden to both the price of ETH and the price of the P3D token, your risk exposure will be increased.
Earning Potential: Entirely volume-based. During high volume periods, the dividend payouts can be astronomical, but will slow down significantly when the volume dips.
My Rating: 2/5. The score is low mostly due to the increased risk and inconsistency of earnings when compared to some of the other services in this list.
You can check it out here if you’re interested.
6. Profit Line Inc.
Risk Score: 4/5
What you’ll need: An Ethereum wallet extension like MetaMask. Some ETH.
A different take on the Proof of Weak Hands concept. Buy bonds with ETH, with a 10% bonus (1 ETH buys 1.1 ETH in bonds). Wait for the bonds to fill, and cash out 10% profit or reinvest.
You can also buy ‘management’ positions which earn a small portion of all incoming volume. These spots can be bought back from you, rewarding you with a further 4.5% profit.
As with P3D, earnings from the app are purely reliant on the volume flowing through it, and so many other apps and services are being designed to plug into it.
Earning Potential: Entirely volume-based. Bonds fill incredibly fast when volume comes through the app, however, so income can be amazing.
My Rating: 2/5. As with P3D, the score is low mostly due to inconsistent earnings. You’re exposed to slightly less risk regarding token price, however.
You can check it out here if you’re interested.
Passive Income with Other Cryptocurrencies
Moving away from the two most popular (and most secure) blockchains tends to result in increased risk, especially where you’re subject to the wild price fluctuations the cryptocurrency market is infamous for. Still, I’ll list just a handful of the less risky ways you can earn passive income from other cryptocurrencies.
7. Staking TRX on TRON
Risk Score: 3/5
What you’ll need: A TRON wallet extension—TronLink is the most popular. Some TRX, you can get it on Binance.
Go to TronScan, freeze TRX, vote for Super Representatives. Most offer incentives in exchange for your votes. Bitguild, for example, are offering 115% of all block rewards to their voters.
Earning Potential: Approximately 5% annual interest on your frozen TRX.
My Rating: 3/5. A good way to earn passive income from your TRX, but you’re subject to the price swings of a token outside of the top 10 cryptocurrencies by market cap.
You can get started here if you’re interested.
8. Lending on Binance
Risk Score: 2/5
What you’ll need: A Binance account. Some BNB, USDC, or other asset that’s listed on the platform.
Lending based on the Binance exchange. Opportunities are available for a limited time, at varying interest rates. You can subscribe to a lending option, hold the asset for a set period of time, then reclaim your asset plus interest.
Earning Potential: Varies per asset and per opportunity. At the time of writing, Binance offers a 14-day USDC lending option, which gives approximately 0.26% interest at the redemption date.
My Rating: 1/5. This would be much higher if lending opportunities were more consistent, and for larger periods of time. As it stands, there are more reliable passive income opportunities elsewhere at a fraction of the risk.
You can sign up here if you’re interested.
9. Holding NEO
Risk Score: 3/5
What you’ll need: Some NEO. A NEO wallet to hold it in (or a Binance account).
NEO pays its holders with the GAS token (known as NeoGAS) in an amount proportional to their holdings. Simply buy NEO, and hold it in the Neon Wallet or a Binance account (since they support GAS payments for their users), and earn GAS.
Earning Potential: Varies according to the price of the GAS token. Currently, you can expect around 4% return in GAS for your NEO.
My Rating: 1/5. Both NEO and GAS are highly susceptible to wild price swings, and your earnings are unreliable. There are just better opportunities for earning passive income with cryptocurrencies other than NEO.
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