With much of the world in various stages of lockdown due to COVID-19, many people find themselves with a lot of time on their hands. From reduced commute time due to less traffic on the roads or unfortunately, layoffs, free time seems to have a new meaning. Some folks find that they can work from home and enjoy the fact that they get to spend more time with their families.
Of course, one of the downsides of working from home or being furloughed is the fact that you can experience a drop in your income. Some money-smart millennials with an entrepreneurial spirit have taken to doing side gigs that are Internet-based. If you are going to embark on an entrepreneurial journey, this might be the best time to do so.
But what if there was a way to earn a passive income? Before we move forward, let’s explain the term. Investopedia describes it as ‘[Passive income is] earnings derived from a rental property, limited partnership, or other enterprise in which a person is not actively involved.’ It’s a dream that most people have – to make money from work you’ve done at a point of time, without having to put in effort now! The truth is, that dream can become a reality.
As anyone of an older generation and they may mention investing. Today, although that still applies, a new version has been introduced: cryptocurrency. Here is Merriam-Webster’s definition of cryptocurrency: any form of currency that only exists digitally, that usually has no central issuing or regulating authority but instead uses a decentralized system to record transactions and manage the issuance of new units, and that relies on cryptography to prevent counterfeiting and fraudulent transactions. Could cryptocurrency investment be your ticket to passive income?
What’s to love about cryptocurrency investment?
Cryptocurrency has been around for a few years and gained mainstream popularity with the rising value of Bitcoin. Today, scores of different cryptocurrencies exist globally, and many are gaining traction just like Bitcoin.
Investing in cryptocurrency isn’t as hard as you might think. Plus, there are several ways that you can make money from it, such as:
- Buying several units and selling them in the future at an inflated price;
- Mining for cryptocurrency units using computers with powerful components;
- Lending cryptocurrency to people and getting repaid with interest.
Cryptocurrency is a fantastic way to make a passive income. Plus, you can invest in cryptocurrency all through the convenience of your home computer.
If you wish to invest in cryptocurrency as an ongoing passive income model, keeping a record of your transactions for tax purposes is simple. You can use crytp tax software to generate tax forms for your convenience.
It’s also worth keeping in mind that if you make a significant investment, your actions alone could substantially increase the cryptocurrency’s value! As you can see, there are many benefits to investing in cryptocurrency. But, are there any downsides?
The potential downsides of cryptocurrency investment
While there are many advantages to investing your money in cryptocurrency, you should know about the potential downsides too. First of all, you’ll feel spoilt for choice due to a saturated cryptocurrency market!
When you choose a cryptocurrency for investment, you must do plenty of research before parting with any money. After all: the last thing you want to do is to face a significant loss on your investments.
Secondly, there is the security aspect to consider. As you know, people keep cryptocurrencies in virtual wallets. The problem is some wallets, or rather the wallet providers got hacked in the past.
It’s possible to use a solution that involves a hardware “dongle,” such as a USB stick for added protection. However, if you lose that dongle, you’ve effectively lost your money as there’s no other way to gain access to it!
Last but not least, you need to consider if your computer has the right level of Internet security protection. That’s because hackers can theoretically snoop on your online transactions if your PC/laptop is insecure.
Cryptocurrencies can make great investments, especially when you want to create a long-term passive income. They’re also brilliant for boosting your financial future. But, they can only work if you’ve done the right research first.