What have I done!? - sobs
Let's get Passive.
I've had this thing with passive income for some time now, and have been chasing this goal for awhile now.
Tried many many different strategies in reaching this particular end. And today I will start to share some of them with you.
Just so you don't make the same mistakes I did investing in some dodgy cloud mine, or hardware that never pays itself off.
Today we will be covering a few methods.
Masternoding it up.
When running a Masternode. You are part of the network infrastructure of a particular coin. You help secure the network, provide a service (like coin mixing, anon send, hosting apps and so on) and in return you get some coins.
- Nice & passive. Once set up you can leave it going for the duration.
- Fairly predictable. By calculating how many coins are produced per day/week/month and dividing that by the amount of nodes online, you can estimate how much reward you will get, rate of return, and so on.
- You own a coin/token that can appreciate in value. If the price of the base-pair (usually btc) or if the coin itself increases in value. You can absolutely make more money just holding the coins on the Masternode compared to the produced coins.
- Controlling multiple Masternodes from a single wallet is a possibility so this makes leveraging multiple nodes together possible.
- Some coins have a rather high collateral requirement, for example Dash and NEM. Masternodes can run into the tens of thousands of dollars.
- Risk that the coin you back drops in value.
- Return gets diluted by many new nodes coming online.
- Ongoing cost if you hire a VPS to maintain 24/7 operation.
- Some technical skills required.
All in all it is my opinion that running Masternodes can be a very profitable and quite passive venture, but please, remember to DYOR before investing!
Get your Stake on.
Staking has been around for some time. The easiest way for me to explain the concept of staking is in two ways. First is, it's somewhat like an interest rate on a traditional bank account. You have X amount of coins, you generate a certain amount of new coins each day/week/month, usually a percentage of your total, but some are fixed amounts.
Alternatively it is like a lottery, where each token/coin is similar to a lottery ticket. If your number is chosen, you are awarded with the 'win' (The block reward) and the network continues on. The more coins you hold, the more tickets you have, and the better chance you have of 'winning'.
This was developed as an alternative to the rather centralized, hardware, money, space and electricity hungry method called PoW, oh and lets not forget all that hands on maintenance cleaning that hardware, sending it off to be replaced upon failure and setting it all up!
In order to stake a coin, all you have to do is hold some amount of them in a (usually running) wallet, and wait. Sometimes a long time, sometimes a short time. Due to the probability involved in the selecting of the 'winner', you can even stake multiple times in a short duration, or perhaps be waiting only a little while! Best way to mitigate this is to get a couple more 'lottery tickets' or in this case, more coins!
Best part is you don't burn the tickets by using them, they just stack up higher and higher! Very cool.
- Easy to understand, easy to deploy.
- No need for additional cost of a VPS, most staking wallets only use a small amount of resources and can be run on something as small as a Raspberry Pi.
- Simple to manage, no need for multiple wallets in a single coin as like Masternodes.
- Possibility of an attack by someone buying up a majority share in a coin.
- Can lead to further centralization of the value store due to 'whales' staking all the coins.
- Leaving a large amount of coins in an active wallet can be distressing!
Personally I find staking and masternodes to be some of the most secure and safe ways to achieve financial independence through passive income. I throw a 100% vote behind the two of those methods.
Of Man and Machine.
Now for one of the favorites, one of the most powerful but in my opinion slightly riskier method of achieving passive income generation.
Many people have heard of the term, daytrader. A flat out no holds barred user who sips coffee through an IV line and smashes Polo or Trex a few minutes a day flipping those coins and making bank.
Now imagine if you could do that, 24/7, 365 days a year, tirelessly seeking profit and never selling at a loss.
Well this is where the bot comes in.
There are many popular bots out there, leonardo, hassbot, gunbot, c.a.t and more. I am not making a suggestion for any of them, actually my suggestion involves figuring out your own 'winning' strategy, and automating it.
When more people are doing the exact same thing (In the trading world anyway), this actually makes that 'method' less effective. So I suggest working out a winning strategy, finding a knowledgeable coder who you trust, and having a bot made up. I suggest staying away from pre-compiled binaries and running your own code in say node or python. This lowers the attack vector.
- Fastest way to earn (in my opinion).
- Customization to the current trading environment. (if built right)
- Easily adaptable and scales out to any amount of value or coins chosen.
- Relentless, logical, never sleeps.
- Never trade at a loss!
- Leaving coins on an exchange to trade with is a risk factor.
- Bot may go rogue and end up blasting your bankroll on something. (If controlled by third party or has a bug in the code intentional or otherwise)
- Endless configuration and steep learning curve.
My opinion is that the best strategy involves using all strategies, and running a bot is one part of my multi-pronged approach to passive income. Very exciting stuff.
Now for the finish!
I wonder if you made it this far.. Because if you did I have something special for you. As I keep an ear to the ground and an eye on the radar sometimes I see an up and comer that has some potential, or a long shot that could make some coin. I urge you to do your own research and only invest that which you are comfortable to leave for some time (until you make a profit! then SELL SELL SELL!!).
I suggest to you, Exclusive coin, otherwise known as EXCL.
Two of the most important things you will ever look at as a trader are the market depth and the price/volume charts. As you can see the price stayed fairly constant for the longest time. Now interest is picking up, I am are seeing volume / demand, and as a result the price is indeed increasing due to demand being greater than supply. Speaking of supply this particular coin has a very low coin cap which I find quite interested, scarcity has its own value.
I could dive into a math hammer approach about how there are less coins compared to others, and the price of the other coin is such and such, and give you compelling reasons to invest. However, this doesn't really interest me and will likely cause you to glaze over. So let's come at this from another approach. The most important thing in Crypto (again my opinion), is having a diverse portfolio, given the data above I believe that there is reason enough already to pick up a few of those so very exclusive coins. If you would like to learn more here are some links.
Diversify your portfolio, never go above 10% into any one particular coin. And think about picking up some elusive exclusive coins because I believe it's a solid choice. And always DYOR DYOR DYOR!!!
Thanks for taking the time today dearest readers.
I hope you have a fantastic day, much love. <3
passive income would be my dream!
Check gridcoin ;-)
Wow this is a top notch post with all types of useful original material. I've been meaning to read up on the mechanics of masternodes, so this is a start.
I can't say I agree on the 10% in any one coin because not all coins are equal.
Do you think EXCL will hold its gains? It looks like it just had a nice run up. Consolidate at a level point or slide down? What's your call?
I'm thinking that this run up may slow, but continue for a while. keep in mind this coin has been increasing in value all through the hardfork and segwit drama when everything else bled in the streets. Honestly markets are super hard to predict, but I feel with such a low coin cap, you can't go wrong with picking up a couple of them.
Cost average your way in, pick 20 coins and grab a couple $$ a day for a year or two. Just don't have that fancy cup of coffee or lunch roll from the corner store and bring something from home instead.
Interesting i will make a double check now. Noce article Man!:)
I'm staking a couple of coins. It's good.
I do enjoy watching coins have little coin babies.
Thanks for this post a lot bite size knowledge that was easily digested. Will research that coin as well. I think you can make a decent amount by doing research, setting up buy and sell orders and investing what you can lose. This is all basic knowledge but I am amazed at those including myself who dont do this in times of weakness.
Great post thank you for sharing
You are welcome. <3
Thanks for the info.. a lot to digest on a friday afternoon but will get the crypto brains trust (hubby) to go through it.. he's always looking for passive income as well :)
Well, I have invested a small amount in crypto currencies. But most things you mention here is a bit hard for me to grasp. Or maybe I lack in interest. I sort of just hold my coins and well that pretty much is the case LOL. This post actually made me a bit more interested to at least TRY to look at ways to generate some more money from my coins, thanks Sammo <3
I agree, my knowledge is limited. But good to know from reputable sources more or less what is going on.
Exclusive and elusive. Sure fire winners for an increase in value!
Spammers be gone!!!! POOF
An excellent write-up @sammosk
The concept of passive income has been haunting my thoughts for good long time also. I've not come any closer to that dream - and I've figured out that any passive income strategy shall require a many-layered approach as no single source could be considered 'sure-fire' or 'reliable' enough to depend upon long-term.
Thank you for sharing information about these crypto-based methods however. :c)
I have been looking at passive income. I invest in property but that is the tradition method. Looking for something different at the moment. I find your suggestions very useful.
Thank you very much for making this lovely Article
Very good info
And thanks for the tip!
I think the biggest reason people have problems with passive income is because for almost any source of passive income, you have to be active in the beginning. It's not at all passive in the beginning.
For example, with the bot, if you REALLY want to make a profit, you have to have a reasonable understanding of how bots work, the internals of your particular bot, and perhaps more importantly, the edge cases where the bot may make bad decisions. You don't need to be an expert, but you have to be reasonably knowledgeable and up-to-date
I agree, same with network marketing. I takes time to learn the skills so you also have to be patient. Also maybe it helps to be clear in your mind what you want exactly and what one's definition of passive income is.
If I were to start mining can I ask you for advice please?
I am interested in staking and also with the exclusive coin.
Thanks on the informative post @sammosk!
My my, so much more to learn! Shucks, I'm just gonna let you guys handle the tough stuff for now. I'd rather be exploring, photograhing, videotaping and chatting with new friends and STEEMING! MAHALO for sharing your knowledge!
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I like the analysis and layman-speak that you use to interpret the technical side to those that are only lightly-versed in the Crypto Market. I, personally, have a bit of coin (very little) in about 5 different coins and have a few small BTC cloud contracts. I have put only a small amount of coin into the pursuit, so I'm pleased.
Obviously one of the next steps is the actually fund some into STEEM, which I plan to do.
A possibly rhetorical question (or 2): If I have $20 extra and were to buy in, the worst that happens is that I lose $20, correct? It's not like some of the Stock Market plans where you can actually owe in at the end of the day, right?
Correct. It's not like playing with leverage with a broker where you could straight up go into debt by running 100x leverage on a trade and getting burnt for $500,000.
You can run margins/leverage with trading and you can get burnt, I will not be going into a discussion on that.
The worst thing that can happen is you lose value, however, it is my opinion that only a foolish trader 'trades at a loss' if something is lower today, that's okay, just wait for it to recover again.
Look at btc after the mtgox thing, took 2-3 years to get back on an upward trend. :)
Yeah, I figure I'll add into my Crypto to some degree, but I won't care enough to try to ride the waves of day trading. I just want to fund and wait... hopefully it drops some for a bit so that I can buy in with less, but then as I keep pushing in a bit here and a bit there any upward trend is going to be profit.
I think my personal plan would be to fund it and then maybe fund a bit more on a downward trend, then try to sell enough to recoup the losses of the buy so that all the Crypto at that point is at a $0-loss value. At that point it becomes a win-win.
Then again, I may not even do the sell and just accept that buy as the value-loss and the rest is just icing on the cake. As long as it's not money I'm counting on, it won't be a big deal if it's gone.
I call that bounce trading, buy in hard at the bottom of a flashcrash or just before big news hits, wait for pump, sell 2-3 mins later just the investment you put in, getting back the value and leaving any 'profit' in the coin chosen, now you can play 'for free and with no risk'.
Pretty exciting stuff dumping a few k into a 5 minute trade and walking with $500.
Can burn you as well. Still exciting. :)
I really appreciate that you write in layman's terms. I learn a lot from each of your posts.
Excellent Post! I am now your Follower! Up-Voted
Thanks for this post. I don't know much about this stuff but it makes sense that a bot could do at least some of the stuff you do just as well if not better. There was a time in normal financial markets when there was this big negative hype about algorithmic trading. Thanks for the tip on EXCL. I hope you have a wonderful day!
Deep onion is having a 40 week airdrop for those of you that have a bitcoin talk account. It's fully anonymous and designed to run thru the tor network. The Dev team and marketing strategy are on another level with a full team of friendly moderators ready to answer any questions at a moments notice. With it's unique distribution It's a great long term hold with zero financial risk. If you don't have a bitcoin talk account you can put that miner to work or pick some up at novaexchange and stake them for interest. To apply you just need your Bitcoin talk ID number and a Deep onion wallet.
I love staking coins. I'm not making a lot right now, but everyday I stake some new coins in my wallet. I wanted to get into mining, but the cost of equipment is so high for the return that I feel like I might just be better off investing that money in more staking coins instead.. : (
I soooo appreciate you breaking it down into terms that I can understand. Thank you! <3
Stop spamming thanks.
Why are you spamming gifs on my post?