The Cryptonairz team aims to provide educational and information content. Specifically, we are, in no way, offering investment advice. Importantly, any investment strategy or project mentioned is purely for informational purposes. So, please do your own research. Finally, just because we mention a project or strategy, does not mean we are recommending it.
The key to earning passive income in cryptocurrency is to understand all the potential investments available. Only then can you do the proper research to judge their potential. Ethereum has unlocked a host of options when in comes to viable investments in the crypto. We’re specifically talking about DAOs, NFTs, nodes, mining and DaaS. With that said, let’s take a look at a some of the available options to earn passive income.
DAOs have come to popularity with the rise of Cryptocurrency. But what is a DAO? They are an organization that is coded into a computer program and meant to be transparent. Importantly, the members of the DAO have the majority of control within an organization. Therefore, DAOs are not controlled by a central governing body. Importantly, the DAOs financial and organizational records are maintained on the blockchain. This makes the organization truly transparent.
DAOs can in theory be ran without human influence. However, it requires that the smart contract enabled to operate the DAO can be used to simulate any Turing machine. While not always, DAO governance is generally coordinated using NFTs. These are purchased and verified by a crypto wallet. Lastly, DAO members can be rewarded with crypto in exchange for their support, along with an initial investment.
Bored Apes, Crypto Punks, Cool Cats and The Salty Pirate Crew. These are some of the most popular NFTs. They represent digital assets that carry a market-driven value. Value can be derived either from their utility, scarcity or some other intrinsic feature. Technically, the NFT is a non-interchangeable unit of data on a blockchain. NFTs can be bought and sold. They are also uniquely identifiable and verifiable on a blockchain. Generally, they also are associated with a digital file, such as an image, an audio file or a video. Because each NFT is uniquely identifiable, they differ from a traditional cryptocurrency. Finally, NFTs have gained popularity for their use in art and gaming.
Mining is fundamental to the existence of crypto. In order to mine, you need to create a node utilizing sophisticated hardware and software. The node is used to solve an extremely complex math equation. Specifically, when a computer solves the problem, a new block is added to the blockchain and the process continues. Therefore, mining is essential to the blockchain by both supporting its existence and growth. Generally, those that “mine” by allowing their hardware to create blocks are rewarded. Most often the reward is in the form of the currency they are mining. Of note, the reward itself is a portion of the fee taken in order to complete a transaction.
While mining can help a user generate income, it is also extremely costly. For example, miners have to deal with the cost of hardware itself. They also deal with the cost to both operate and maintain the hardware. The cost of energy and network requirements are also variables to be factored in. Lastly, on top of earning coins from mining, a miner can also have voting powers. These are useful when changes are proposed to a protocol.