Best way to put my Crypto to Work, Passive Income?

[very_452001]

Like for example earn interest on my crypto or loan it out or what other ways are there that I don't know yet?

These services above that I mentioned, is there a decentralised service, where I still control the keys and also there is no 3rd party/middle man/counterparty risk?

For example I see ads everywhere like deposit your Bitcoins into so called platforms and earn up to 10% interest. For example if someone has 10 bitcoins worth $400k now and deposited their bitcoins into this service for $40k a year on interest return. Sounds great however what if the platform gets hacked or platform freeze your account or platform goes bankrupt or whatever counterparty risk it is, the depositor will lose their 10 bitcoins correct?

What's the best decentralised services out there?

Lastly can a hardware wallet like ledger nano offer such services through their ledger live app and you still have control of your keys on your crypto right?

Otherwise who's crazy enough to take huge risks to sign up for these such services?

If there's no decentralised service exists yet, when will we get such decentralised services?


Finally in the meantime if there's no option except for centralized services then which one is the best on the market now and also are they covered by FDIC or SPIC programs?

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[mk4]

I don't think you really have a choice but to hand over custody of your funds if you want to use services such as BlockFi. They make money off your coins by loaning them to people, and obviously they definitely need total access to your funds.

And yes, there definitely are risks. If you want to use these services, the trick is to just not hand over 100% of your funds to such services. What percentage of your funds should you hand over? Well, it's going to totally depend on you. What percentage of your funds are you fine risking?

Personally I just prefer holding my bitcoin in my own non-custodial wallet, and simply just focus on earning money(may it be fiat or btc) through businesses.

[Jawhead999]

Lastly can a hardware wallet like ledger nano offer such services through their ledger live app and you still have control of your keys on your crypto right?

Yes, there's only 2 coin with no risk to invest trough ledger live app
1. https://www.ledger.com/staking-tezos/
2. https://www.ledger.com/staking-tron/

They also offer another coin, but there's a risk from the validator if he's doing misbehaves.
1. https://www.ledger.com/staking-cosmos/
2. https://www.ledger.com/staking-algorand/

Finally in the meantime if there's no option except for centralized services then which one is the best on the market now and also are they covered by FDIC or SPIC programs?

Binance.US has FDIC insured, but I think it's only for the deposit not for the interest/saving account [1] So, your saving account in Binance aren't covered with FDIC.

[1] https://cointelegraph.com/news/dollar-deposits-on-binanceus-now-have-fdic-insurance-coverage

[cryptoaddictchie]

Binance.US has FDIC insured, but I think it's only for the deposit not for the interest/saving account [1] So, your saving account in Binance aren't covered with FDIC.

This is good but how about the crypto(stablecoin) that is used for savings account on Binance do they have any FDIC insured on this, or primarily only those whom deposited USD. But I'm afraid there should be something like this for global users with stablecoin on their exchange. Cause based on the article its only on Binance US.

[pawanjain]

If it would have been so easy, everybody would have been doing it. Even I had earlier tried to find out such ways to keep my bitcoin balance growing but I wasn't able to find one which I could trust completely.
The only best option I found was to start staking with ETH2 but I didn't have that kind of balance (32 ETH is minimum required).
There are third parties which let us start staking with small amount of ETH balance but then I wouldn't want to trust them at this early point.
If you have 32 ETH or more then you can start staking which would be the best bet but otherwise it's better to keep holding the bitcoins and remain it safe and secure.

[Lucius]

It’s hard for me to understand that people still think they have to invest their Bitcoin to make some profit, and at the same time they can make the same just by holding coins in their non-custodial wallets. Just a few months ago the price of 1 BTC was around $10 000 (now it is almost 4 times more), and a little less than a year ago the price dropped below $5000 which is almost 8 times less than now.

Isn't that more than a great passive income without the risk of someone else owning your private keys?

For example I see ads everywhere like deposit your Bitcoins into so called platforms and earn up to 10% interest. For example if someone has 10 bitcoins worth $400k now and deposited their bitcoins into this service for $40k a year on interest return. Sounds great however what if the platform gets hacked or platform freeze your account or platform goes bankrupt or whatever counterparty risk it is, the depositor will lose their 10 bitcoins correct?

It's a risk you have to take if you want to invest that way - haven't you learned anything from the Mt.Gox example? Specifically as far as your example is concerned, do you think at this point that it would be wise to risk 10 BTC worth around $400 000 to earn only $40 000 after a year - and at the same time those 10 BTC can very easily increase their value by at least 100%?

[cheezcarls]

You can do staking if you want, as long the coin or token is legit and not some kind of hype projects that would rug pull later on. Some tokens that are worth staking are ETH (if you can provide 32 ETH for launching the 2.0), NWC, IRIS, CORX, etc. You might not want to end up in those “guaranteed profits” opportunity like “Turning your 1 ETH into 30 ETH in 30 days” or so.


But the safest way is to buy and HODL until you are satisfied with the profits on whatever cryptocurrency you are holding.

[very_452001]

Lastly can a hardware wallet like ledger nano offer such services through their ledger live app and you still have control of your keys on your crypto right?

Yes, there's only 2 coin with no risk to invest trough ledger live app
1. https://www.ledger.com/staking-tezos/
2. https://www.ledger.com/staking-tron/

They also offer another coin, but there's a risk from the validator if he's doing misbehaves.
1. https://www.ledger.com/staking-cosmos/
2. https://www.ledger.com/staking-algorand/

Finally in the meantime if there's no option except for centralized services then which one is the best on the market now and also are they covered by FDIC or SPIC programs?

Binance.US has FDIC insured, but I think it's only for the deposit not for the interest/saving account [1] So, your saving account in Binance aren't covered with FDIC.

[1] https://cointelegraph.com/news/dollar-deposits-on-binanceus-now-have-fdic-insurance-coverage

Okay to confirm there's no risk getting rewards through the ledger live app as I still have control over my keys?

Beginner question: what is a Validator and how does a validator misbehaves and is this misbehaving a risk to my coins on my ledger hardware wallet?

Great, Binance US is FDIC insured but its only insured for crypto deposits deposited into their wallets not for interest/savings rewards programs right?

Lastly can a hardware wallet like ledger nano offer such services through their ledger live app and you still have control of your keys on your crypto right?

Yes, there's only 2 coin with no risk to invest trough ledger live app
1. https://www.ledger.com/staking-tezos/
2. https://www.ledger.com/staking-tron/

They also offer another coin, but there's a risk from the validator if he's doing misbehaves.
1. https://www.ledger.com/staking-cosmos/
2. https://www.ledger.com/staking-algorand/

This is what I've also thought of. You hold your keys and you earn from staking. You can also do your own research for other wallets that are offering the same.

I think there are many of them.

Okay Staking means you have control over your keys on your crypto and still get rewards like interest? Stupid question but POW coins like bitcoin cant be staked but only POS coins and which POS altcoins in the top 200 coinmarketcap ranking allow staking?

Lastly can anyone stake or do you have to become a Validator first to stake?

Finally does the Validator is required to put up collateral 1st?

Basically what you're looking is PoS-based cryptocurrency, currently the most popular option is ETH where you become validator (if you decide to stake 32 ETH) or use 3rd party who will stake with coin of multiple user (if you decide to stake less than 32 ETH).
See https://ethereum.org/en/eth2/staking/ and https://launchpad.ethereum.org/ if you're interested.

Yes, there's only 2 coin with no risk to invest trough ledger live app
1. https://www.ledger.com/staking-tezos/
2. https://www.ledger.com/staking-tron/

While the risk is smaller, the risk is still exist since tou need to choose other validator and trust them not to misbehave.

What benefits/rewards can only a Validator get over normal staking by any crypto bag holder?

When you say use 3rd party to stake then there's that counterparty risk as 3rd party will control the keys?

I like to know how does a Validator misbehave, is it like committing fraud so Validator benefits more?

It’s hard for me to understand that people still think they have to invest their Bitcoin to make some profit, and at the same time they can make the same just by holding coins in their non-custodial wallets. Just a few months ago the price of 1 BTC was around $10 000 (now it is almost 4 times more), and a little less than a year ago the price dropped below $5000 which is almost 8 times less than now.

Isn't that more than a great passive income without the risk of someone else owning your private keys?

For example I see ads everywhere like deposit your Bitcoins into so called platforms and earn up to 10% interest. For example if someone has 10 bitcoins worth $400k now and deposited their bitcoins into this service for $40k a year on interest return. Sounds great however what if the platform gets hacked or platform freeze your account or platform goes bankrupt or whatever counterparty risk it is, the depositor will lose their 10 bitcoins correct?

It's a risk you have to take if you want to invest that way - haven't you learned anything from the Mt.Gox example? Specifically as far as your example is concerned, do you think at this point that it would be wise to risk 10 BTC worth around $400 000 to earn only $40 000 after a year - and at the same time those 10 BTC can very easily increase their value by at least 100%?

Yes I totally agree! The Risk to Reward Ratio that is for example $40,000 annual yield return for $400,000 deposit is too high risk unless of course its covered by Government FDIC or SPIC right?

You can do staking if you want, as long the coin or token is legit and not some kind of hype projects that would rug pull later on. Some tokens that are worth staking are ETH (if you can provide 32 ETH for launching the 2.0), NWC, IRIS, CORX, etc. You might not want to end up in those “guaranteed profits” opportunity like “Turning your 1 ETH into 30 ETH in 30 days” or so.


But the safest way is to buy and HODL until you are satisfied with the profits on whatever cryptocurrency you are holding.

Why with all this De-Fi hype we going through now (Decentralised Finance)?

I thought Decentralised Finance is suppose to eliminate these such risks mentioned on this thread because its decentralised right?

Is there no De-Fi projects or Dapps out right now or will be released soon that offer such services at no risk?

Otherwise what's up with all this De-Fi hype 

[moderator's note: consecutive posts merged]

[xenodata]

The risk seems great for interest accounts, but I think I'll try it with some small amounts.  I'm curious how this will work and what kind of 1099 I'll get next year at tax time.  You're getting interest, but they're paying you in more crypto.  Which is property according to the IRS.  So... I guess you'd have to claim it and pay on what the 'property' is worth.

Anybody already do their taxes with interest from BlockFi?  How did you account for it

[Theb]

I'm just gonna say it right from that start I'm not recommending this website but it has been featured in articles in both Forbes and Reuters and the company name is BitBond which its main service is to be a lending platform for both lenders and lendee where the lender of the money will also earn a certain percentage from each transaction they do. BitBond I think has gained a lot of reputation especially since even small and medium enterprises are also using their platform to earn money or just rather skip the hassles of loaning money from traditional banks as it was originally intended to do so. And IMO not unless you have a substantial amount of capital (maybe in the hundreds of thousands) I don't think you can rely on the passive income you will be earning from these interest bearing platforms, It may depend on your risk tolerance but for people who wants to maximize their limited capital buying cryptocurrencies is the most rewarding way to go.

[very_452001]

I'm just gonna say it right from that start I'm not recommending this website but it has been featured in articles in both Forbes and Reuters and the company name is BitBond which its main service is to be a lending platform for both lenders and lendee where the lender of the money will also earn a certain percentage from each transaction they do. BitBond I think has gained a lot of reputation especially since even small and medium enterprises are also using their platform to earn money or just rather skip the hassles of loaning money from traditional banks as it was originally intended to do so. And IMO not unless you have a substantial amount of capital (maybe in the hundreds of thousands) I don't think you can rely on the passive income you will be earning from these interest bearing platforms, It may depend on your risk tolerance but for people who wants to maximize their limited capital buying cryptocurrencies is the most rewarding way to go.

Do you mean BlockFi?

[Lucius]

Yes I totally agree! The Risk to Reward Ratio that is for example $40,000 annual yield return for $400,000 deposit is too high risk unless of course its covered by Government FDIC or SPIC right?

If the funds were secured in the right way, then such a way of investing would make some sense because it would reduce the risk that you could lose your initial investment. But what should always be kept in mind is that one of the ideas behind Bitcoin is decentralization, which from an individual point of view means that everyone should be their own bank (control their private keys), and all these centralized services are the complete opposite of that idea.

Just holding Bitcoin has always been profitable, so on the example of someone who had 10 BTC in a non-custodial wallet yesterday - their value increased by as much as $100 000 overnight. I will never tell anyone to do this or that with their money or any other property - everyone is responsible for their actions - but I will say that I would never give someone complete control over something like BTC regardless of all possible insurance and interest.

[Theb]

~snip

Do you mean BlockFi?

Nope BlockFi is a similar service and when I say BitBond I am saying BitBond. I don't know the similarities between the two but I think when I describing BitBond just to make it sure don't apply it as well with BlockFi since they might have big differences with regards on how loand will be match with each other as well as the interest rates you will have from the both of them. Also if you are asking specifically about passive income earning methods particularly on interest rates I think it would apply on any platform as if you are expecting to make a living out of interest rates then you should have a big capital to begin with. But if you are here who just wants to maximize your earnings while hodling I think this is a good way to earn a little more.

[very_452001]

Okay what bout Crypto.com De-Fi wallet I see on their site, any good?

[mk4]

Okay what bout Crypto.com De-Fi wallet I see on their site, any good?

Based on the Crypto.com DeFi Wallet page[1], I'm pretty sure it's just a typical non-custodial wallet. No passive income whatsoever besides the potential long-term value increase of your assets.

[1] https://crypto.com/en/defi/wallet/

[libert19]

There are lot of defi platforms but almost all of them wash their hands of with 'vulnerable to smart contract hacks/risks', so there isn't really anything that is risk free.

[very_452001]

There are lot of defi platforms but almost all of them wash their hands of with 'vulnerable to smart contract hacks/risks', so there isn't really anything that is risk free.

Okay I thought De-Fi was like peer 2 peer networks or like torrents where there's no centralised point on the map to hack or target.

So you saying the smart contract part of de-fi is exposed to hacks? How can a de-fi coin get hacked or targeted?

Xrp Ripple for example is centralised where the SEC can easily target them like they did.

Please explain.

[libert19]

There are lot of defi platforms but almost all of them wash their hands of with 'vulnerable to smart contract hacks/risks', so there isn't really anything that is risk free.

Okay I thought De-Fi was like peer 2 peer networks or like torrents where there's no centralised point on the map to hack or target.

So you saying the smart contract part of de-fi is exposed to hacks? How can a de-fi coin get hacked or targeted?

Xrp Ripple for example is centralised where the SEC can easily target them like they did.

Please explain.

The centralized party is replaced with smart contracts in defi, and those smart contracts are codes which are not perfect, they can get hacked, wallets can get drained.

[akirasendo17]

there are some exchange where you can lend your token to bitcoin, from other traders, or stake your coin, these are some of the ways to earn passive income, although it's not that big, why not try ico, and ido investments, which are currently the craze there is a risk, of course, all investment have risk, but if you want income to choose the best one, try ethereum staking for example and others.

[xenodata]

Is ethereum staking live and paying interest? Thought that was still pending 2.0.

[bakasabo]

Is ethereum staking live and paying interest? Thought that was still pending 2.0.

You can easily join Ethereum staking program on Binance. I just dont know if you are obliged to pass KYC to join staking program (because I have verified account). It has easy step-by-step guide how to start and all the FAQs. (I havent experienced Ethereum staking, cant help you if you have questions.)
You can also get passive income from staking different Binance programs also. Kucoin has staking programs also.

[Slow death]

you need to take some thing into consideration:

1 - cryptocurrencies are very volatile, just as they increase a lot in price, they can also fall a lot in price.

2 - in the particular case of altcoins that in most cases their owners are not anonymous the risk becomes very great

by this I want to tell you that it is better that you buy and hold and set a price target that you want to sell

example:

bitcoin purchases for $47,000 and decisions you will sell when the price reaches $70,000

you will have control of your investment.

[very_452001]

There are lot of defi platforms but almost all of them wash their hands of with 'vulnerable to smart contract hacks/risks', so there isn't really anything that is risk free.

Okay I thought De-Fi was like peer 2 peer networks or like torrents where there's no centralised point on the map to hack or target.

So you saying the smart contract part of de-fi is exposed to hacks? How can a de-fi coin get hacked or targeted?

Xrp Ripple for example is centralised where the SEC can easily target them like they did.

Please explain.

The centralized party is replaced with smart contracts in defi, and those smart contracts are codes which are not perfect, they can get hacked, wallets can get drained.

Okay when do you think smart contracts will mature and be used everywhere after the coding gets better or after debugging smart contracts?

there are some exchange where you can lend your token to bitcoin, from other traders, or stake your coin, these are some of the ways to earn passive income, although it's not that big, why not try ico, and ido investments, which are currently the craze there is a risk, of course, all investment have risk, but if you want income to choose the best one, try ethereum staking for example and others.

Do you mean lent my alts for bitcoin collateral?

I know the ico craze back in 2017 but whats a ido?

Love to stake Eth but cant afford to buy 32 Eth which is required for staking 

Okay which exchanges you speak of, do you mean decentralized exchanges?

you need to take some thing into consideration:

1 - cryptocurrencies are very volatile, just as they increase a lot in price, they can also fall a lot in price.

2 - in the particular case of altcoins that in most cases their owners are not anonymous the risk becomes very great

by this I want to tell you that it is better that you buy and hold and set a price target that you want to sell

example:

bitcoin purchases for $47,000 and decisions you will sell when the price reaches $70,000

you will have control of your investment.

Yeah crypto is volatile and obviously the next bear market cycle will come that will last a few years.

For All Time High buyers that bought crypto at the top price and soon after experience a follow up crash that crashes into that new bear market cycle, these ATH buyers have 2 options:


- Sell their crypto at a loss.

- Or HODL their crypto and putting their crypto to work by getting Passive Income on it during the bear cycle and thus making more money at the next new bull cycle if they sell at that.


So I'm hoping this thread can help crypto bag holders with their decision.

However risk losing all your crypto with a counterparty is much worse than selling all your crypto at a 80% loss

Surely there must a proven reliable de-fi or a true decentralised service with no risk where bag holders can get passive income on their crypto. Theres 6000 coins in the crypto space, surely there's must be at least 1 offering such service 



[moderator's note: consecutive posts merged]