Earn Passive Income in Cryptocurrency – part 6
The sixth part of the cryptocurrency passive income guide will talk about Masternodes and Work Tokens as a way of providing passive income.
Our previous videos have talked about Proof of Stake as a method of earning passive income. Masternodes work in a similar fashion, though they are not the same.
A masternode is a form of a node that is well-connected. It is mandatory that this node has a set minimum amount of collateral in coins that is usually quite large. These coins must be staked in order to become a Masternode. Masternode staking is often paired with regular consensus algorithms such as Proof of Stake or Proof of Work. There quite a few masternode hosting as well as shared masternode services such as Gentarium and Gin.
One thing to note is that you have to be cautious with masternodes because coins that use these kinds of nodes often have extremely high inflation. This is because the earnings of a masternode are usually instantly sold off for quick profits, as masternode investors put so much in being eligible to become a masternode that they want the returns ASAP.
There are quite a few websites that track masternodes, their profitability, and volume. The most well-known examples of masternode cryptocurrencies are DASH, PIVX, Horizen, Zcoin, and Waltonchain.
Work Tokens and Resource Provision
Work tokens are, just as masternodes, a form of staking. They represent a combination of staking alongside the ability to perform various tasks or provide certain resources to the network. The aforementioned work or resources include storage, transcoding, data, and computational resources provision. A provider of such work or resource earns fees in the form of rewards or fees.
Work tokens create a blockchain-powered marketplace that connects supply (which includes the aforementioned storage, transcoding, data extraction, computation) with the demand.
Most of these cryptocurrencies have relatively high inflation rates as an incentive to bring resources and work supply to the network as well as to accommodate future scaling.
The most well-known examples of masternode cryptocurrencies are Storj, Livepeer, Chainlink, Golem, Augur, and Wagerr.
Check out our next cryptocurrency passive income guide to learn more ways of creating passive income by leveraging your cryptocurrencies.