You may not realize it, but in addition to allowing for active trading, cryptocurrencies also provide plenty of opportunities to make passive income. There are a few more common methods of earning passive income with your cryptocurrencies as well as methods that are a bit less common.
Staking
For this method of passive income to work, you need to choose a cryptocurrency that uses a Proof of Stake (PoS) consensus mechanism. If you find one you like, this will be the simplest way to get passive income from crypto you already own. The PoS coins must be in open wallets, and you must leave them there for as long as possible. NEO is the most popular Proof of Stake coin that this will work for, but others include Neblio, Komodo, PIVX, NAV Coin, BirdgeCoin, and Decred. A quick online search can show you others.
HODLing Cryptos That Pay Dividends
Staking is not the only way to make passive income from HODLing cryptocurrency. Some cryptocurrencies will also give you dividends simply for holding them. Some cryptocurrencies that are known for giving out dividends and actually being worth it are NEO, KuCoin Shares, CEFS, and TenX. You can also find other great options by searching online.
Running a Masternode
Another great way to earn some passive income is to run a masternode of a cryptocurrency that uses either PoW or PoS. Remember that masternodes are full computer wallets or nodes that store the full blockchain copy in real time. They must always be running and perform tasks like conducting instant transactions, increasing the privacy of transactions, and participating in voting and governance. There will, however, be eligibility requirements to run a masternode, and the hardware you need may also vary, sometimes requiring a significant upfront investment.
Lend Your Crypto
If you already have a reasonable amount of cryptocurrency, consider lending it out to earn interest. There are many different lending platforms available for exactly this purpose. The important thing to keep in mind if you plan on lending crypto, however, is that you should always do so through a reputable provider. If you were to lend crypto to an individual yourself, there is no guarantee they will actually return the digital currency.
Mining
Depending on your resources, you may also want to look into mining as a way to earn passive income. Mining can require a reasonable amount of hardware and does consume a fair amount of electricity. Even so, those with the right rigs and low-cost electricity can make a profit mining certain currencies. Just be sure to carefully research which one you will mine beforehand. Mining certain coins is simply no longer profitable for individuals.
Pay Attention to Airdrops
If you are willing to put in a little bit of effort to pay attention, you can also get some passive income for doing almost nothing via an airdrop. Public blockchain wallets tend to have irregular and random airdrops. The best way to take advantage of them without any effort is to just keep your crypto in a wallet instead of an exchange. Or you can go out of your way to learn about airdrops and do what you can to participate.