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Midas.Investments started with one simple goal: use the emerging crypto-economy to help people find financial freedom. To do this, Midas has become a crypto asset management platform that offers people a range of ways to earn passive income through cryptocurrency.
Like all investments, it is important to understand what you’re investing in and the factors that can affect those investments. To help you better understand how you can make money from crypto, we’ve put together this guide to earning passive income with cryptocurrency.
1. Earning Interest On Crypto Accounts
You can earn interest on Bitcoin, Ether, and other cryptocurrencies by placing them in what are known as crypto savings accounts. Several platforms offer this service, but they all, at their core, do the same thing—provide you with passive income, in the form of interest payments, in exchange for you lending them your cryptocurrency.
What is the interest rate?
The interest rate you can earn depends on the platform you choose as well as the type of cryptocurrency you choose to invest in.
Let’s assume, for convenience sake, that you’re starting with Bitcoin. Here’s how it works: you sign up for an account with the platform, then transfer some of your Bitcoin into the account you’ve created on that platform. The platform then lends out your crypto, similar to how a bank provides a loan. The platform charges an interest rate for this “loan” then pays you a portion of that interest.
About the assets BTC, ETH, USDT
Bitcoin (BTC), Ether (ETH), and Tether (USDT) are cryptocurrencies. Tether, on the other hand, is referred to as a stablecoin. It differs from other types of cryptocurrency in that it is designed to keep crypto valuations steady. For that reason, Tether isn’t subject to the same volatile nature of currencies like Bitcoin and Ether.
Regardless of the type of cryptocurrency, they are all referred to as assets. And, like other assets, the goal is to have them rise in value so that they can be sold for a profit.
Cryptocurrencies use peer-to-peer technology for payments rather than banks. It is considered a decentralized currency, with no single business, person, or authority in charge of it. Each cryptocurrency is created using blockchain technology.
Bitcoin (BTC), the very first cryptocurrency, was created in 2009. It uses peer-to-peer technology for payments. Today, it is the largest cryptocurrency by market cap, at 622 billion euros. A single Bitcoin, in June 2021, is worth 33,898.89 euros.
Bitcoin can be used as a currency to buy and sell things, or it can be used as an investment with a long-term hold approach. This investment strategy is based on the idea that Bitcoin will gain in value over time.
Tether (USDT) is a stablecoin, a type of cryptocurrency made to keep valuations steady. As such, it isn’t subject to the same wild fluctuations that other digital currencies are prone to.
Tether is different from cryptocurrencies like Bitcoin in another significant way: it’s backed by physical gold. It was launched in July of 2014 as RealCoin, before being rebranded as Tether in November of that year.
Earning interest platforms:
There are several platforms that offer interest payments on your Bitcoins.
Midas is a crypto investment platform and exchange. It has several aspects, including stable yield automated portfolios, masternode yield automated portfolios, a trading bot named Fline, and interest rates for various cryptocurrencies. The platform places a strong emphasis on security, which is why they chose to use Gmail and Discord as login methods. Both offer two-factor authentication and several other security features, making them a safe and secure way to log in to Midas. In addition to that, Midas has several layers of security built into its platform to ensure your funds stay safe and protected.
What assets are available?
There are more than 40 different cryptocurrencies available on Midas.Investments that can be used for earning interest. Interest rates vary depending on the currency chosen. Here are the rates for the most popular currencies:
- BTC – up to 17%
- ETH – up to 17%
- USDT – up to 17%
Binance is an exchange for trading cryptocurrencies. It provides a crypto wallet for users to store their coins. Founded in 2017, it primarily focuses on currencies other than Bitcoin, collectively called altcoins. Currently, there are more than 9,000 cryptocurrencies, totaling 40% of the cryptocurrency market.
The site has a markets section for currency values and shows the high, low, and change of each currency over a 24-hour period. As a trading platform, the way to earn money on Binance is to buy and sell cryptocurrencies, similar to how you would make money on traditional currency exchange.
BlockFi is a platform that lets you buy and sell crypto as well as earn interest at a rate of up to 8.6% APY. TO earn interest, a user signs up for a BlockFi Interest Account. They then place their crypto into the account to earn daily-accruing interest, paid monthly.
Mining is the practice of using computers to solve complex mathematical problems. Users earn rewards by solving problems. This seems easy but has some complications. With many other people also trying to solve the same problem, it becomes a race to see who finishes first. Solved problems add to that currency’s blockchain, and the reward is handed out in the form of coins or portions of coins.
In the early days of cryptocurrency, a person could mine using a home computer. Then a computer arms race began, with people building ever more powerful machines to do the mining. The development of integrated circuit chips designed explicitly for mining crypto has made it nearly impossible to mine Bitcoin with a regular home computer. Even with a powerful, custom-made machine, it is difficult.
While mining Bitcoin used to be profitable, the cost of a capable machine has now priced most individuals out of Bitcoin mining, with the bulk of miners now being either businesses or groups of people who pool their computing resources and split the profits.
Another popularized coin, Ether, has also reached the point where it’s difficult for individuals to make money from mining. Joining a group of miners, known as a pool, is the best option for seeing returns from mining popular coins.
For this reason, many people have moved over to other, lesser-known cryptocurrencies. The payout is lower, but so is the competition.
As a way to earn passive income, mining is a relatively low effort once it’s up and running. However, it requires a fair bit of technical know-how to get started. For those looking to get into mining cryptocurrency, the site WhatToMine shows which currencies are worth the effort.
Decentralized lending platforms
A decentralized lending platform, also known as decentralized finance, or DeFi for short, is based on blockchains. It doesn’t require the use of an exchange. Instead, transactions are made directly between users without the need for an intermediary. This is done using decentralized applications that make use of blockchain technology and smart contracts. The software used to make transactions is open source.
Aave describes itself as “an open-source and non-custodial liquidy protocol for earning interest on deposits and borrowing assets.”
But what does that mean?
To earn money on Aave, you make your funds available for people to borrow, then collect interest. Aave, which has become highly popular with people looking to lend or borrow altcoins and stablecoins, runs on the Ethereum blockchain, which means its operations are decentralized.
Funds are placed into a pool and an algorithm controls borrowing. The result is that your funds aren’t directly connected to a specific lender, but rather become part of a larger amount than the program then distributes to borrowers.
Compound is also built on Ethereum. Like other lending platforms, users lock in assets, or cryptocurrency, for lending. The interest rate is based on a supply and demand model. A lower supply of available funds for borrowing leads to a higher interest rate. This system is intended to incentivize people to deposit funds for lending. Accessing Compound is done through a browser interface.
Cream is an acronym for “crypto rules everything around me,” which gives it a hint of being a lifestyle as much as it is a lending platform. Like the others, it is built on the Ethereum blockchain. It is also available on the Binance smart chain.
Creator Jeffrey Huang has combined the best parts of other DeFi platforms to create Cream. The lending platform is a fork of, or based on, Compound, Balancer, and Curve. These multiple sources are part of an effort to make Cream more than just a lending platform.
3. Setting up a Node
To start mining crypto, you will need to be a node (along with other requirements). A node is the infrastructure of a blockchain. Blocks of data within the blockchain are stored on nodes – typically a computer, server, or even a laptop computer and the nodes are all connected to each other.
If it helps, you can think of nodes as the hardware on which the blockchain computer code resides. If the entire transaction history of the blockchain resides on a node, it is referred to as a full node.
A miner or a computer being used to mine blockchain, by necessity must also be a full node. But the host of a full node does not have to be a miner. Instead, it acts as a host to the data and helps strengthen the system. The security of a blockchain exists in part through having many nodes, essentially copies of each other spread across many devices.
Who can run a crypto project node?
Anyone can download a blockchain’s transaction history and begin running a node. There are no permissions required, and it doesn’t require the computing power that is needed for mining blockchain. For anyone with the tech know-how – or the willingness to learn – this makes running a node fairly accessible. That said, it should be noted that you will need a lot of memory for some blockchains, as the more popular ones have a large amount of data.
How to do that?
Setting up a node requires a computer (of course) and what is referred to as client software. Unlike a mining setup, it doesn’t require a supercharged and highly powerful computer. This can be done on a regular consumer-grade computer, like what most people use. For this walkthrough, we’ll use setting up an Ethereum node as an example, but the process is the same for other blockchains.
You’ll need to download the software required for running your blockchain. Because the software is open source, building your own client is also an option, if you have the coding skills.
Before firing up the software, double check your system to make sure you have enough space, and that everything is up to date. You’ll also need to set the correct time and date on your system, if that was altered for any reason.
You’re now ready to run your node. It’s a good idea to keep it online as much as possible, and to follow proper shutdown procedures if you need to restart, so that you don’t corrupt the database.
By now, you should have a pretty good idea of how to start earning an income through cryptocurrency. From mining to lending, there are a variety of ways to make some crypto cash.
Opportunities in crypto
Following crypto-related threads and groups on social media, Reddit, Discord, and Twitch is a good way to stay informed of potential opportunities, and a good way to broaden your knowledge, as well. The key is to learn as much as you can so that you can make informed decisions. Knowing how cryptocurrencies function is just as important as knowing how to invest in them.
Be careful choosing DeFi solutions or projects
The nature of DeFi exposes your crypto to an increased level of risk due to coding errors, bugs, and hacking in the DeFi platforms. Be sure to choose a provider that places a premium on security. Again, research is crucial before committing funds.