There are many reasons to be excited about the crypto industry, especially when looking into the “money-making” opportunities.
Back in the day, the ability to earn free cryptocurrency was an accidental occurrence. It could have been a hard fork such as the one Bitcoin and Ethereum experienced, or a free airdrop to increase awareness (check TRX airdrop to ETH holders).
These early-day crypto rewards became a very attractive reason to enter the crypto space and today, companies use them strategically to generate hype and increase mainstream adoption.
In this article, we will dig into the different ways that can help you generate a source of passive income, and how to go about each one of them.
How to earn free cryptocurrency
Some of these methods are specifically directed to users that already hold a significant amount of certain crypto coins. Others will require a small sacrifice of your time. Let’s look at the most popular options that are currently available.
Mining is the process of confirming transactions on a blockchain using the power of your computer (node). This is only possible for coins that are built with a “Proof-of-Work” consensus algorithm, the same model that Bitcoin uses to generate new coins.
In order to get started, you will need to do the following:
- Invest in mining equipment. We say invest because, in most cases, you will earn back the money you spent on your miner. A great practice, especially during the time of this writing, is to invest in a second-hand miner from eBay. Many people have found disappointment in their mining efforts due to the downturn of bitcoin’s price. In most cases, you will easily find a bargain.
- Set it up on your computer. Connect your miner to the web and run the mining software.
- Start getting payouts in the cryptocurrency of your choice.
In order to earn free crypto using mining, you will need to have enough funds to make your initial investment (buying the hardware) and enough patience to watch/read a few tutorials on the web. You will also need to consider the electricity costs associated with mining, as this will have an impact on your profits.
If you plan on mining popular cryptocurrencies, such as Bitcoin, I suggest you learn more about mining pools as well, since the chances of getting Bitcoin rewards when mining on your own are slim to none.
All in all, mining Bitcoin (and other cryptocurrencies) is still a great way to earn passive income.
Staking your coins
Staking is probably the closest you can go to effortless passive income from your crypto holdings.
The idea behind staking is pretty simple. Hold a certain amount of cryptocurrency in your wallet and you will be able to get rewards by validating transactions. Instead of having to buy expensive miners, all you need to do is not spend a certain part of your holdings.
The more coins you choose to stake in your wallet, the higher your rewards will be. Depending on the network (cryptocurrency), your rewards will vary.
When looking at the current situation of the crypto market, my top-3 picks when it comes to staking are the following:
Tron introduced staking rewards a while ago, and users are able to participate in the process by voting for Super Representatives.
These elected Super Representatives receive the majority of the block rewards which they are able to share with their voters.
When the process first started, there were a few issues related to the honest distribution of rewards due to Binance’s enormous voting power (more than 12 billion votes/TRX), but the exchange has since announced support for TRX staking, distributing their rewards among users.
Both Tron and Icon are Chinese cryptocurrencies. The reason I chose them as my top staking options is not just because of their popularity in the space but also because of the country’s recent developments related to cryptocurrency.
ICX is extremely low priced at the moment, (-98% since its ATH) and offers a staggering 13-20% annual staking reward.
I expect this, and other Chinese cryptocurrencies, to see an enormous price increase during the next bull market cycle. This is, of course, an assumption, but I am willing to take a calculated risk.
Starting from January 2020, Ethereum will finally fulfill its long-awaited promise to become a PoS token. ETH’s popularity, paired with the high-end entry barrier (32 Ethers), will make Ethereum Staking a very interesting way to earn free cryptocurrency.
To this day, there is no exact information regarding the expected rewards, but the range we are looking at is between 4,45% and 10,4% in annual interest.
How much interest are you earning on an annual basis for your savings account? The banking system has been working with interest-bearing accounts since forever and the process of earning interest looks as follows:
1 – Deposit money in your savings account
2 – Allow the bank to use your money in order to earn more money
3 – The bank keeps a large number of their earnings while paying you a small, pre-determined amount on an annual basis.
The same model is now being used by cryptocurrency lending platforms. Investors are now able to deposit Bitcoin and other cryptocurrencies into an interest-bearing account, making up to 14% interest on an annual basis.
And before you think that 14% per year is a small amount (hello Bitconnect investor!), remember that banks pay about 0,01%-0,02% per year. And that is the best-case scenario.
Companies like NUO and BlockFi are paying investors up to 14% annual interest and fully insure their deposited funds.
Check the graph above and specifically, the “Interest offered” tab. As you can see, the % of potential returns varies and it is best to assume you will receive the low-end of your rewards (remember, in the crypto world, what is too good to be true, usually is not true).
This may quickly offer some overview when it comes to the platform you choose to work with.
Aside from that, as with all methods, this one is very risky and you should do extensive research before you make a decision. After all, you will be sending all your coins to an unknown service, hoping that they deliver on their promise.
Lending for Margin Trading
A relatively new model that started back in the day with Bitfinex is the concept of lending your Bitcoin to a trusted exchange platform to fund the activities of margin traders.
Since then, many exchanges, including Binance, have introduced this lending option to allow Bitcoin holders to earn passive income simply by “locking” their funds for a given amount of time.
If you want to learn more about this lending option, you can read our article on Bitcoin Lending, where I explain the process in further detail.
Before we move on, here are the rewards you can expect on an annual basis when lending your crypto to popular exchanges:
- Binance – Up to 10% on fixed deposits
- Poloniex – Up to 13.5% per year, calculated on a daily basis
- Bitfinex – Up to 11,6% per year, calculated on a daily basis
The most popular way to earn free cryptocurrency, but also the one where you will need lots of luck, are airdrops.
An Airdrop is a calculated distribution of a new cryptocurrency to wallets of a specific blockchain. Coin creators usually make airdrops for the following reasons:
- To increase the popularity and value of their coin by distributing it to a community of active users
- To increase awareness among an existing community of a bigger, already existing community (e.g. Tron – BTT airdrop)
- To reward users that trade a specific cryptocurrency (airdrops made on exchanges)
- Get personal information of users (rewarding them with tokens to go through KYC)
In order to take part in an airdrop, you will need a cryptocurrency wallet that supports the coin you are looking to receive (for example, you might need an ERC-20 wallet if the coin you receive is running on the Ethereum Blockchain).
After doing so, register to online services that provide accurate and timely information about crypto-related airdrops. The ones I have found to be most accurate are:
Services like the one shown above will assist your research and keep you informed regarding upcoming airdrops, allowing you to participate as soon as the process starts.
Keep in mind that anyone and everyone is able to create a cryptocurrency and host an airdrop. For that reason, your chances of actually getting a coin that may increase in value over time is very slim. This, however, does not mean it’s impossible.
Recently, a cryptocurrency named Energi rewarded hundreds of people with more than $245 worth of their token. This can be a life-changing amount for citizens of some less developed countries.
Cryptocurrency bounties are a great way for tech-savvy “bug finders”, creative content creators and influencers to earn free crypto.
In essence, these reward programs allow participants to earn free cryptocurrency by performing certain activities (usually promotional). They are most often associated with ICO’s or IEO’s and aim on increasing awareness and improving the value of their offer.
Users receive their tokens once the bounty process is completed and the amount they receive depends on the value they provide.
Most people browse through BitcoinTalk or Bounty0x to discover the current popular bounties. The latest used to be very popular with larger projects (due to the $5000 pricetag required for listing) but has since created free listing options, lowering the overall quality of the offer.
For that reason, you might want to start looking at the popular bounties in BitcoinTalk and check the coin’s whitepaper and team before you decide to invest your time in it.
Earn.com is a platform that allows businesses to pay members in cryptocurrency for completing simple tasks, such as answering emails or reading whitepapers.
If you have some free time on your hands and want to learn more about cryptocurrency, this can be a great way to get paid doing what you love.
The platform was acquired by Coinbase a while ago, allowing users to earn cryptocurrency by performing activities directly through Coinbase (up to $50 to simply learn more about a coin). While $20-$50 may not seem like a large amount, users are able to repeat this activity for several coins, earning more crypto over time.
Crypto earning opportunities to fuel the future of finance
When looking at all the methods above and really analyzing how they work, one thing becomes very clear:
Earning money is no longer tied to one’s location, political situation, age or legislation. As time progresses, money is slowly becoming boundless.
This is incredibly bullish for crypto and positive for the future of the world. People will no longer need a bank, a “golden passport” or anyone’s permission to handle their money. All they will need is a smartphone or a computer and an internet connection.
Now, we are still very early in the process. You could even go as far as saying that we are early adopters. For that reason, certain regulations surrounding a few of the methods above are still unclear. However, with time, we expect the ability to earn free cryptocurrency to become a lot easier.
And, as more and more people learn about the potential to earn crypto online, the world will naturally become more interested in the positive impact of cryptocurrency.
More people will start creating blockchain-based companies and even more will pay for their day to day expenses using cryptocurrency.
When looking to the future of our economy as a completely digital, transparent financial system, the question we need to ask is not if its possible, but rather when the switch will happen.
The ability to earn money through cryptocurrency is a very big benefit of the industry. As the reputation of Bitcoin grows, so will the efforts of companies to acquire new users/investors. As such, we expect to see a lot more options to earn free cryptocurrency in the future. For now, however, we identified seven.
In short, here are the methods that can “bump up” your passive income:
- Cryptocurrency Mining
- Staking your coins
- Lending platforms
- Lending for Margin Trading
We hope you enjoyed this post. If you know of additional ways to earn cryptocurrency, feel free to post a comment below. We will be updating the post to add more sections soon.