Cryptocurrencies are a great way to have an extra or main source of income. However, many digital currency users would like to convert their transactions into passive income rather than focus on this business entirely. Thankfully, there are seven great cryptocurrencies for passive income.
NEO is a project and cryptocurrency also known as the Chinese Ethereum. The algorithm it uses is called the Delegated Byzantine Fault Tolerance and the currency offers the possibility of staking. The current yield is said to be 2.3% per annum.
The main difference between NEO and other cryptocurrencies is that it is indivisible. This means that 1 NEO cannot be separated into parts like some other currencies. There is also a “fuel” model in use that comes in the form of GAS tokens. When you find the next block, 7 GAS are immediately distributed among the NEO holders.
2. VET & Thor Power
Both VET and Thor Power are a part of the VeChain project. VET is the main type of VeChain tokens. Both of the cryptocurrencies are similar to NEO and GAS with VET holders receiving THOR Power tokens like NEO holders receive GAS.
The main aim of VeChain Thor is to become a platform for the development of decentralized applications on an enterprise level. Ethereum is only secondary in this case. Another advantage is that there are no minimums for stacking with some exchanges supporting THOR generation for VETs stored in their wallets.
WAVES is extremely suitable for mass-market applications. This is due to the concept that lies within which focuses on creating a consensus algorithm that would be capable of supporting up to one hundred transactions per second.
This cryptocurrency uses the Leased Proof-of-Stake (LPoS) algorithm which is basically an advanced and more developed version of the common Proof-of-Stake. Users can rent WAVES from the wallet to various contractors that pay a percentage back. In order to participate in the mining process, the user must stake at least 1000 tokens. The yield per annum is said to be 7.5%.
Unlike other cryptocurrencies on this list, DASH is not based on the Proof-of-Stake algorithm. Nevertheless, its masternode system is still great as it lets owners receive dividends. In order to receive these dividends, a user must have a masternode with 1000 coins in their wallet. This makes DASH’s system quite similar to the standard PoS coins.
DASH’s annual profit is about 7.5-8.4% which makes it one of the highest. On the other hand, the issue price may be too high for some users.
Users can vote with their LSK tokens for delegates with blocks created by 101 delegates with the minimum number of votes. The selected delegates then receive all the rewards for stacking, but they can also share dividends with the users who support them.
Each vote costs 4 LSK, but there are no technical restrictions on the amount of LSK required for voting. This means that users with at least 200 LSK will be more likely to minimize the share of costs and get good income. Once you have such an amount, you can start participating in the elections.
XTZ belongs to Tezos which is pretty young having been launched only in September 2018. It uses the Liquid Proof of Stake algorithm. Tezos positions itself as the network protocol for time-tested and safe smart contract systems. The annual yield is around 7%.
You have to “freeze” at least 10,000 XTZ in order to become a Tezos validator. On the other hand, you also have the delegation possibility meaning that any number of your coins can be entrusted to a miner (also known as a baker).
DCR belongs to Decred which uses a hybrid PoW/PoS engine that reduces the possibility of decentralized mining. Decred’s top priority is decentralized management and the current annual yield is over 10% (of course, with a minimum staking requirement of 5 DCR).
You can purchase “tickets” to vote on key issues related to the management of the Decred network. This way, you can earn passive income. You can also receive a portion of block mining (around 30%) by holding a certain number of coins in your wallet. The reward depends on your participation.
KCS or KuCoin Shares is an exchange cryptocurrency that gives its shareholders dividends. KuCoin is actually an exchange platform but it’s different from other such platforms in a few ways. KCS holders get a discounted trading fee rate, participate in giveaways, and so on.
After you register on KuCoin Exchange, you will only need to deposit the preferred amount of your chosen cryptocurrency (BTC, ETH, LTC, etc.) and purchase KCS. Then, you will need to transfer the coins from the Trading to the Main Account and that’s pretty much it.
Other Ways to Use Cryptocurrencies for Passive Income
Other ways of having passive income with the help of cryptocurrencies include lending on exchanges such as OKEx, Poloniex, and BitFinex. Alternatively, you could check out Binance’s lending program.
With Binance, you will be able to earn interest income by lending out your holdings for a certain period of time. BitFinex and Poloniex allow you to lend to people for margin trading purposes, while OKEx works in a similar way.
All in all, cryptocurrencies are already popular enough and will gain even more recognition in the future. This is why it is important to get started with them as soon as possible. Choose the best cryptocurrencies for you on this list and start earning passive income.
Bio: Gregory is passionate about researching new technologies in both mobile, web and WordPress. Also, he works on writing service review websites Online Writers Rating. Gregory is in love with stories and facts, so Gregory always tries to get the best of both worlds.