Trading is not the only way to earn with crypto. There are another easy ways to earn a good passive income with crypto. For those looking to generate passive income, there are several viable methods that can yield significant returns. This article delves into the top five ways to earn passive income with cryptocurrency in 2024. Explore these strategies to make the most of your crypto investments.

Best 5 Ways to Earn Passive Income from Cryptocurrency

1. Staking

Staking allows users to earn by holding tokens and validating transactions. Token holders can become validators in a Proof of Stake (PoS) consensus mechanism by staking their tokens in a specific smart contract. However, some steps of this process can be done automatically or with third parties. The more a validator stakes their cryptocurrency assets, the higher the chance of being randomly selected to validate and process a new block.

The adventage about staking is that validators lose the crypto if they try to validate fake transactions, guaranteeing the stability and security of a proof-of-stake blockchain network. Validators lock cryptocurrency in a smart contract, so they often earn proportionate rewards for the number of cryptocurrencies they hold. The value of these rewards rises if the blockchain grows and becomes more popular.

2. Play-to-earn Games

Play-to-earn games allow players to earn crypto while playing games. The games create a digital economy based on the blockchain and NFTs. Users can buy and sell virtual items within the game. Players can acquire real-world value through quest completion, achievement of in-game milestones, or participation in the game's economy. The players' activities, decisions, and interactions drive the in-game economy, including asset trading, governance stake, and ecosystem contribution.

Although some play-to-earn games may contain decentralized finance (DeFi) elements, players can earn bonuses by staking in-game assets or participating in liquidity pools .

3. Crypto Mining

Cryptocurrency mining is the process of creating certain digital currencies, such as Bitcoin. Mining employs dedicated computational resources to append blocks to a proof-of-work (PoW) network. When a new block is added to a blockchain, it verifies the most recent transactions and creates new digital tokens.

There are various mining methods. During the initial stages of technology development, CPU mining was the preferred choice for most miners. However, CPU mining is widely seen as sluggish and unfeasible today due to the extensive time required to accumulate even a modest return, considering the substantial expenses associated with electricity and cooling and the overall level of difficulty.

GPU mining enhances processing capacity by consolidating a group of GPUs into a single mining setup. The rig must have a motherboard and a cooling system for GPU mining. Cloud mining allows individual miners to leverage organizations' resources and dedicated crypto-mining centers. Cloud mining is rising because the costs of mining through GPUs and ASICs are increasing .

4. Yield Farming 

Yield farming is a method to reward users for lending their digital assets to a DeFi protocol. The process involves giving liquidity to a protocol. In return, you receive a token. Then, you put that token back into the protocol to earn more rewards.

While yield farming can generate high returns, it carries risks such as impermanent loss and smart contract flaws. Yield farming has the potential to generate passive income and high yields, which can outperform traditional passive income methods. Many DeFi protocols reward high-yield farmers with governance tokens. These tokens can be used to vote on platform decisions and are tradeable. This increases the potential earnings for yield farmers because they receive rewards for providing liquidity and have a say in the protocol's future direction .

5. Master Nodes

A master node is a server that operates on a decentralized network. It carries out tasks that are typically not attainable with the other nodes connected to the network, such as direct and private transactions. These master nodes can be relatively complex and expensive, making them inaccessible to typical node operators. However, they receive a portion of the block reward for operating the master node. The pay-out times vary depending on the coin.

Those who operate masternodes can earn cryptocurrencies continuously without having to get engaged in the process of mining the coins themselves. This is the primary advantage of the masternode option. Various elements affect the amount of money you make as a master node, including the specific protocol used, the price increase in the coin selected, and the individual currency chosen.

Because you are staking coins, you are still vulnerable to the price decrease in your holdings. Furthermore, because you are earning your returns in the cryptocurrency coin itself, the return on your investment in fiat currency is also subject to change. Therefore, one will operate a masternode based on the prospective fixed return on investment (ROI), but users will also need to consider their perspective on the price of the coins .

Conclusion

In conclusion, earning passive income with crypto is possible and is one of the easiest ways to do it. Lastly, remember that this is not financial advice. This article is just an overview of how to earn passive income with crypto in 2024. So, do your research before investing in such coins. To read more informative blogs like this, head to our blog section and learn more about trending cryptocurrencies.

How to Buy The Tokens on CoinEx

CoinEx is a global cryptocurrency exchange trusted by 6+ million users worldwide and has 100% reserve. Users can now trade quickly and seamlessly with its 1000+ supported tokens, including the mentioned meme coins. 

To purchase any token on CoinEx, follow the steps below. 

1. Sign up for an account: Create a CoinEx account first. 
2. Log in to your account. Now, fund it using deposit methods or cryptocurrencies. With funds in your account, you can quickly complete deals.
3. Go to the Trading Page for the Token: Once your account is funded, proceed to the specialized token's trading page on CoinEx. Use the search box to find your preferred token. 
4. Choose a Trading Pair: Select the desired trading pair that matches another cryptocurrency.
5. Specify the Purchase Amount: Determine the quantity of the tokens you want to purchase. Input the amount in the trading interface, which will calculate the corresponding cost based on the current market price.
6. Execute the Trade: Execute the trade with the specified amount. Confirm the details, and if you are satisfied, submit the order. 

Q1: What are the best ways to earn passive income with cryptocurrency in 2024?

A1: The top ways to earn passive income with cryptocurrency in 2024 include staking, play-to-earn games, crypto mining, yield farming, and running master nodes. Each method offers unique benefits and potential returns, depending on your investment and involvement level.

Q2: How does staking work in generating passive income with cryptocurrency?

A2: Staking involves holding and locking up your cryptocurrency tokens to support the network's operations, such as validating transactions on a Proof of Stake (PoS) blockchain. In return, you earn staking rewards, typically in the form of additional tokens. The amount earned depends on the number of tokens staked and the overall network performance.

Q3: What is yield farming, and what are its risks and rewards?

A3: Yield farming is a process where users lend their digital assets to DeFi protocols in exchange for rewards. This involves providing liquidity to a protocol and earning interest or tokens in return. While yield farming can generate high returns, it also carries risks such as impermanent loss and smart contract vulnerabilities. It is essential to understand these risks before participating.

These FAQs are designed to address common queries about generating passive income with cryptocurrency, providing clear and concise information to enhance understanding and engagement.