Latest news about Bitcoin and all cryptocurrencies. Your daily crypto news habit.
Why do people ride the crypto roller coaster? Either they really like roller coasters, or they believe that the ride will ultimately end in a profitable place. Wouldnât it be nice if there was an alternative way to make money with crypto? Maybe something that was less unnerving or volatile?
For those who are intrigued by the promises of crypto, but turned off by its volatility, there are ways to grow your holdings regardless of market conditions. Opportunities for passively growing crypto holdings are multiplying as the crypto universe expands. Here are a few examples of ways your crypto can grow regardless of whether the rollercoaster is climbing or plunging.
Staking: a high-yield savings account for crypto
As Proof of Stake (PoS) networks grow in popularity, so has the need for those who are willing to participate in the staking process. To encourage participation, PoS blockchains offer rewards to coin holders for staking.
PoS is a system for verifying transactions. The technical term is âconsensus mechanism.â PoS has grown more popular as Proof of Work, another method for verifying transactions, has received criticism for being environmentally unfriendly. There are a number of popular coins that offer staking opportunities.
When a coin holder agrees to stake coins, they become a âvalidatorâ entrusted with the task of reviewing transactions. If a validator confirms that a transaction is accurate, they process it by adding a new block to the chain. In return, they are rewarded with more crypto.
Theoretically, while anyone can be chosen as a validator, most PoS networks have protocols that favor those who stake more and longer. To increase their chances of being among the chosen and rewarded, some crypto holders have set up staking pools that aggregate funds.
Staking, however, often means locking your coins down for a period of time, which means you cannot sell them should you decide selling would be a more profitable short-term move. Additionally, because your reward from staking is more coins, if their value starts tanking, your rewards do, too.
Rewards: the âcash backâ of the crypto world
In 1986, the Discover card introduced the concept of âcash backâ to the world of credit cards. By simply using the card for your normal purchases, you could earn cash equal to a percentage of the purchase.
Today, there are a growing number of rewards programs that give users their cash back in crypto. This means you can grow your crypto just like you grow other loyalty rewards when shopping for groceries, gas, or golf clubs. The rate of rewards varies based on a variety of factors, but some of the programs can give you better than 5 percent back depending on the coin. In some cases, a particular credit card is required to participate, but there are platforms that allow you to bank crypto regardless of the card you use provided you establish an account.
The downside of rewards programs are similar to those of staking, namely your reward is in crypto, which puts you back on the roller coaster. Still, itâs a pathway to passive growth, which means when the coaster climbs, you will have more crypto to cash out.
Author Bio
Jacky Goh is the CEO and Co-founder of Rewards Bunny, an online platform that rewards shoppers with cashback in crypto or US dollars. As a serial entrepreneur, Jacky loves connecting people with a purpose. Having been in the crypto space for a long time, he understands what makes a project attractive and loves the idea of people earning rewards that multiply like bunnies.
Disclaimer
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.