Bitcoin is one of the top cryptocurrency which provide many people to earn passive income and give a chance to make money without involving in it actively. You don’t need to take unnecessary trading risks or spend time reading and analyzing reams of information for getting start your passive income through this cryptocurrency.
The concept of passive income is not new many people are earning through it from many years but undoubtedly cryptocurrency added new dimension to this earning ways. Some basic concepts of compounding interest or reinvesting dividends are also applied in cryptocurrency market where an environment is created which helps to create passive income. In this blog we will discuss various ways to earn passive income with Bitcoin. In this article we will discuss about interest accounts, lending, mining, and trading and liquidity pool.
What is Bitcoin Interest Account?
Having some Bitcoin in your cryptocurrency saving account is similar to having regular saving account. It is your asset which is valuable and profitable for you. These crypto accounts offers you fixed amount of profit on the deposit of what you save in your account. A person having crypto saving account can choose flexible savings plans, which allow the depositor to withdraw assets whenever they want to or wish or fixed saving plans, where the assets remain deposited for a predetermined period.
Interest rates are usually higher when someone deposits funds for a fixed-term than in a regular saving account. Its tenure is usually less than that of conventional bank accounts.
What is Bitcoin Lending?
A Bitcoin Lending occurs when a person who is holding some Bitcoin lends the crypto to some borrowers through centralized and decentralized or on peer-to-peer platforms. In return it gives you daily, weekly or monthly interest rate.
There are three factors which are influencing the crypto earnings are the total amount of Bitcoin which is being lent, second one is the total duration of the loan and the last one is the interest rate. For this user need to trust a third party for lending the Bitcoin infrastructure and the terms on centralized lending platforms. For lending your Bitcoin you need the expert-level help as your Bitcoin lies in the custody of platform. Basically we can say that to start passive crypto from this method you need to have some crypto or Bitcoin in your personal account.
What is Bitcoin Mining?
This method enables us to gain rewards from computing power which helps to secure the Bitcoin network. Bitcoin is known as to be proof of work protocol which requires the network participants to solve and arbitrary mathematical puzzles to make a secure network and prevent the other persons from unauthorized access to their network.
In early days when it was the start of Bitcoin people mined Bitcoin on their normal home PC’s and then on the general purpose mining rigs. As the growth of network of Bitcoin increase it also increase the security concern of Mining and also the complexity increased after this. So after this miners were forced to use the special mining machines which were secure and reliable. These machines were known as application specific integrated circuits (ASICs). These mining equipment’s have integrated chip designed for mining.
For Bitcoin Mining a user has to maintain the mining rigs to bring their cost low or down. They also have to get in contact with some technical expertise to check and maintain the Bitcoin mining machine hardware. This thing creates a great interest in people to start Bitcoin Mining without having to invest a huge amount of money.
What is Bitcoin Trading?
Bitcoin price rate is influenced by the Laws of Supply and Demand. Anyone who is holding some Bitcoin can easily take advantage of the inherent to make money from the Bitcoin Trading. No matter how much this trading last, it may be short-term trading or may be long-term trading. For trading of Bitcoin you need to have great knowledge of market. If you are going to refer for long time to selling Bitcoin you will prefer the condition when the prices are going up while in short time trading you have to sell when the price is going down.
You cannot make a sure precise to the market for making profit as it goes up and down with in second and its market down or up rate may be depend on any false news so it is impossible for someone to guess its accurate flow. You have to buy when the price rate is going down and you think that within a short period of time it will go up and you will sell it with a profit margin. If the recent price of bitcoin is $20000 and it constantly down from previous a few days you will buy the BTC by seeing it daily price down and up rate and after some time it will goes to up near to $25000 then it will be a good time to sell it with having a $5000 margin of profit.
Traders usually do the short strategy to implement it when cryptocurrency price goes down. When the coin rate goes down the buyers or traders buy the currency again and get the desired profit. This kind of shorting can be done by derivatives like future and options. One can also participate in the predictions market for shorting market.
What is Bitcoin Liquidity Pool?
Liquidity Pool is also known as a lifeline of decentralized exchanges and can also is a venue for anyone having BTC to make some passive earning. This pool refers to a digital pile of cryptocurrency locked in a smart contract thus creating liquidity for quicker transactions. Users of various platforms called the Liquidity Providers (LPs) and are rewarded with the part of fees and exchange for the amount of liquidity they have supplied to liquidity pool. These exchanges are paid in the form of LP tokens, which can be used across the decentralized finance (DeFi Ecosystem). Uniswap, Sushiswap and PancakeSwap are some Popular DeFi exchanges.
