The two aspects of having a crypto coin are either holding it or investing it - Just holding crypto without gaining anything out of it really does not make any sense or even when you invest in crypto, you are always worried about the fluctuation and risks it brings. But what if you could earn passive income?

Let’s take this, for instance, imagine you have 1 BTC which you bought for $6000 and now if you do something about it you could turn the same amount to the worth $10,000, but if you don’t then it would remain as it was. 

The concept of earning interest on cryptocurrency is just like earning interest on traditional fiat, stocks, bonds, real estate and so forth.

Stated below are few of the ways for you to earn interest on cryptocurrency

• Lending cryptocurrency

The factors that make the lending cryptocurrency preferable are the security, insurance and interest rate of your cryptocurrency funds.

Given below are three known websites for cryptocurrency lending.

Nexo: It was founded in the year 2017 while it is backed by the founder of TechCrunch whose name is Michael Arrington. It is one of the most popular bitcoin lending sites and was profiled by Forbes. The site consists of its payments in 45 fiat currencies and is also facilitated by BitGo.

Website: https://nexo.io/

BlockFi: It was founded by Flori Marquez and Zac Prince and has raised from firms about more than $20 million. It is known for its interest rates on ETH and BTC. The crypto assets are stored in Gemini with licensed custodian and insurance while with BlockFi no minimum deposit is required.

Website:  https://blockfi.com/

Celsius Network: It was founded by Alex Mashinsky in the year 2018. Celsius Network has been listed in the year 2018 as the ‘Top 10 companies to watch’ by Forbes stating it to be as “they are primed to disrupt traditional banking” and offers amazing interest rates on cryptocurrency. 

Website: https://celsius.network/

Also Read, What is Cryptocurrency Lending?

• Loans with or without collateral

Many platforms allow the borrowing procedure of the cryptocurrencies without collateral however only the verification of the user’s details is required. Various platforms such as BlockFi utilize collateral form for borrowing fiat over BTC and ETH. It is stated to be not the go-to choice as collateral’s volume could be 2:1 meaning the user over every $1 of the loan pays $2 worth Bitcoin and if the price of the crypto falls, the user (here borrower) might have to pay the additional collateral amount. However, it is very much convenient for the one who lends even if there is a fluctuation in the crypto market.

• P2P and centralized crypto lending platforms

With this one that has to borrow would require to register and advertise its loan requirement with the online crypto exchange and submit its application and the rest is left on the users if they want to grant you the loan or not. It is important to study the regulations, risks, reviews, and the number of deals that have been closed before making any decisions of borrowing from this source. The loan can be provided by a single person or a group of investors. 

• Bitcoin Interest Saving Account

The other form of way to earn passive income is by opening crypto or bitcoin savings accounts along with known services of cryptocurrency lending. Sites such as YouHolder, BlockFi, Nexo and Celsius Network facilitate this service and you might end up earning an interest of anywhere between 4% to 10%.

With so many opportunities that flourish for your passive income and might make you earn that extra income. It is yet important as a lender and a borrower to conduct an in-detail study of the websites before investing or borrowing because there are ‘n’ number of fraudulent companies and Ponzi schemes out there to make the offer look exciting but will eventually be a downfall.

As Keerthi Naidu said, 

“The value of money is the difference between the person who is lending it and the person who is borrowing it.”