I know what you are thinking. We are in the midst of a ‘bear market’ and you are talking about Cryptocurrencies that will earn you passive income? Are you insane?
Hear me out for a second. If you truly believe in Cryptocurrencies and the fact that this bear market won’t last forever, then wouldn’t it be great to be informed about the ones that earn you a passive income, whilst their value appreciates, when the market turns around?
Additionally, I couldn’t ignore the positive feedback this series has received. I had to oblige to the countless of readers asking for a Part 4!
In Part 4 of my series, I will highlight another 3 Cryptocurrencies that allow you to earn a passive income. If you haven’t got the chance to read my previous ones, you can find an aggregated list here and some convenient links for: Part 1 | Part 2 | Part 3
“If you don’t find a way to make money while you sleep, you will work until you die” — Warren Buffett
Tezos is a blockchain that can evolve by upgrading itself. Stakeholders vote on amendments to the protocol, including amendments to the voting procedure itself, to reach social consensus on proposals. Tezos supports smart contracts and offers a platform to build decentralized applications.
Tezos uses a consensus mechanism called Liquid Proof-of-Stake (LPoS). To understand LPoS, we firstly need to understand Proof-of-Stake (PoS) and Delegated Proof-of-Stake (DPoS).
PoS is a category of consensus algorithms for public blockchains that depend on a validator’s economic stake in the network. In PoS-based public blockchains, a set of validators take turns proposing and voting on the next block, and the weight of each validator’s vote depends on the size of its deposit (i.e. stake).
DPoS requires coin holders to vote for delegates, who are responsible for validating transactions and maintaining the blockchain. The delegation to a fixed number of validators is a requirement. It is quite similar to PoS with the major difference that in DPoS we consider the vote weight instead of economic weight.
On the other hand, in LPoS delegation is optional, unlike DPoS. As mentioned before, DPoS requires an election of a fixed set of delegates for network consensus. LPoS aims to maintain a dynamic validator set, facilitating token holder coordination and accountable governance.
Tezos calls the process of block production as Baking and validators as Bakers.
There are 2 ways to passively earn XTZ:
Very briefly, to earn XTZ as a staker, you must follow these steps:
To find out how much you can be passively earning with staking, you can use MyTezosBaker’s calculator, here.
If you wish to become a Baker, you need to follow a different set of steps, which I won’t go into details in this post. If you are interested in Baking, you can follow the instructions, here.
Please note that despite Tezos having one of the largest Initial Coin Offerings (ICO) to date, it has since found itself amidst a storm of controversies, so keep this in mind should you want to purchase XTZ.
SpankChain has received significant support from those who recognize the adult entertainment industry as a driver of innovation and those who understand that the communities most motivated to switch to a new economic platform are those marginalized by the existing one.
The SpankChain mission is to bring the core benefits of blockchain technologies — privacy, security, self-sovereign identity, and economic efficiency — to the adult entertainment industry. Our goal is to do this while remaining maximally compliant with legal codes.
SpankChain just recently launched its multi-token economic model which is “designed to abstract away ecosystem-wide coordination processes from mechanisms which meter platform usage rights”. The two tokens used in its economic model are:
Earning BOOTY is extremely easy. In order to do so, you must follow the steps below:
You can find more detailed instructions on how to do so, here.
The amount of BOOTY you can passively earn depends on various factors, including, how long you stake your SPANK for and how much use the SpankChain ecosystem has. Given SpankChain has just recently launched their staking mechanism, it’s still to be determined what the amount you can passively earn is.
Golem is a global, open source, decentralized supercomputer that anyone can access. It is made up of the combined power of users’ machines, from PCs to entire data centers.
Golem is capable of computing a wide variety of tasks, from CGI rendering, through machine learning to scientific computing. Golem’s limitations are only defined by our developer community’s creativity.
Golem creates a decentralized sharing economy of computing power and supplies software developers with flexible, reliable and cheap source of computing power.
Essentially, the Golem Project is the open-source, decentralized, blockchain-based counterpart of Amazon Web Services, Microsoft Azure, etc. Traditional centralized solutions have a number of drawbacks (privacy, security, outages, etc.) which Golem solves using the blockchain and peer-to-peer networks.
It connects computers (and users) in a decentralized, peer-to-peer network, enabling both application owners and individual users (“requestors”) to rent resources of other users’ (“providers”) machines. These resources can be used to complete tasks requiring any amount of computation time and capacity. You can read more about Golem, which has featured in my “Real World Applications of Cryptocurrencies”, here.
Akin to Storj, featured in Part 3, you need to contribute resources for something in return. Contribution to the Golem network comes in the form of computational power. Given how easy it is to set-up and get started with Golem, if you have unused computational power, this essentially becomes passive income.
A tutorial on how to setup and start contributing your unused computational power on the Golem network, can be found here.
Unfortunately, it’s still hard to estimate how much you could be earning, as there are numerous parameters to take into consideration. Having said that, you can find details on how the calculation works and how payments are made in their whitepaper, here.
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