Long Term Passive Income With Cryptocurrency Investments

Crypto currency price appreciation could generate us huge profits in a long term, if we find the right altcoins and we invest in the right time. In addition of the price increase we could also make 20%-30% annual yield on our currencies. This method called staking or in another word, we lock our coins for a certain period of time and earn interest on the amount we stake.

It is similar to when we go to a bank and purchase bonds or in a stock market we invest in stocks and earning dividends, that's generated and paid out to us from the company's profit. The only difference, that in the crypto space, our annual profit will be much higher, than for instance we would invest in the bank.

Why Is It Effective

First of all, I would talk about what staking is, what it's technical background is, what the method is, then I would talk about five coins for staking. In the crypto space everything is decentralized, which means, that there is no third party companies, that would control all the transactions. We users make it work and there are two methods are available for us to use. One of them is called "Proof Of Work" (Pow) and the other one is called "Proof Of Stake" (Pos). Proof of work is for mining crypto currencies and Proof Of Stake is for Staking the coins. When it comes to mining, we would have to purchase miner machines, that would solve complicated mathematical operations.

The miner calculates, that which will be the next block on the blockchain. If we are the first, who solve this problem, we will be rewarded by the coin, that we are mining. The more and stronger miners we have and the more energy we consume, the more coins will be rewarded. The disadvantage of mining is, that the miners and the energy we use are very expensive and we only gain profit if we mine more, than we invested. With mining and staking we are part of the blockchain and we help with development, growth and authentication.

Contrarily to mining, staking is a more convenient and a more elegant way to earn crypto coins. Ether (ETH) on the Ethereum blockchain currently is on the Proof Of Work method, but with the Ethereum 2.0 it will change to Proof Of Stake. We are talking about the second largest crypto currency on the market, so we can see from this, that this method will be more promising and long lasting in the future, then mining.

How It Works

To be able to stake crypto coins we have to purchase them first. Our annual profit is depending on the coin we want to stake. From about 5% all the way up to even 30% . Not to mention that, if we pick the right coins, then we will enjoy extra earnings with the price appreciation at the end of our staking period. With staking, the percentage will be always the same, with the chosen coin regardless the amount we stake to eliminate the monopoly situation. This is why it is fair. Not least Proof Of Stake is environment-friendly.

How To Stake

You need to sign up to an exchange or you need a wallet that is suitable for staking. I will go with Binance, but you can find the staking option in most exchanges and some multi coin wallets offer a staking option too such as Exodus or Atomic wallet. On Binance they have currently 49 different coins available for staking.

It doesn't do any harm to have at least a basic knowledge about the altcoins. It is hard to know and keep track of every single altcoins, but I will talk about five coins later in this article, that I personally think they are good investments. Always do your own research, before buying the coin. Check their website and be sure, that they have a good use case, a well written white paper and what is in the road map. If the coin will have a bright future, then it might be a good investment. Make sure, that you do not fall into the mistake, where you see as high as 35% interest for a 90 day period of staking, because that coin might not be the best one to purchase and stake.

It is also very important to see the coin's price and market cap. I use coin market cap to see for instance Cardano (ADA). In the charts below we see its price increased in the last three months from $0.18 to $1.18 and the market cap from $5,812,776,888 to $37,713,563,195.

Now we know, that Cardano (ADA) has been increasing by both price and market cap so you guessed it this would be one of my coin to stake.

Cardano (ADA)

Cardano is a proof of stake blockchain platform, which is and open source project, that aims to create a more secure, transparent and fair society. Cardano was founded back in 2017 by Charles Hoskinson, who was also one of the co-founders of the Ethereum network. Find more information about Cardano on their website.

PancakeSwap Token (Cake)

PancakeSwap is a decentralized finance (Defi) application and a Binance Smart Chain-based decentralized exchange (DEX), that allows users to exchange tokens, providing liquidity via farming and earning fees in return. Cake also can be earned by farming by providing liquidity on the platform. When farming, there is no locked period of time and it can be un-staked at any time. PancakeSwap website.

Cosmos (Atom)

Cosmos aims to solve the complicity between blockchain networks. It is the so called internet of blockchain. Interblockchain Communication protocol makes it easier for blockchain networks to communicate with each other — preventing fragmentation in the industry. Cosmos website.

Polkadot (Dot)

It plays an important role of the personal data protection on a decentralized platform. It is similar to Cosmos. It creates connections amongst the blockchains to communicate between each others in a private way. Polkadot promises, that it will be easier to create decentralized networks.

Binance Coin (BNB)

BNB was launched through an initial coin offering in 2017, 11 days before the Binance cryptocurrency exchange went online. It was originally issued as an ERC-20 token running on the Ethereum network, with a total supply capped at 200 million coins, and 100 million BNBs offered in the ICO. However, the ERC-20 BNB coins were swapped with BEP2 BNB on a 1:1 ratio in April 2019 with the launch of the Binance Chain mainnet, and are now no longer hosted on Ethereum.

BNB can be used as a payment method, a utility token to pay for fees on the Binance exchange and for participation in token sales on the Binance launchpad. BNB also powers the Binance DEX (decentralized exchange). Website

Source: https://coinmarketcap.com/currencies/binance-coin/

Feel free to leave a comment below, what altcoins or tokens do you like and what would you stake.