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how much do you have to invest to earn a salary

Cryptocurrencies offer different options for those who wish to obtain a passive income for their invested capital. The keys

While the “Bitcoin rush” has dropped a few notches after depreciating 25% from its all-time high of $68,000, Argentines continue betting on cryptocurrencies: there are about five million accounts open in local exchanges to operate.

They not only seek to protect their funds of the effect of inflation and devaluation, but also bet on the passive income, a kind of “living for rent” in a crypto version.

What is passive income and how to get it?

Ramiro Goncalves, financial adviser at RG Inversiones, tells iProUP that the “passive income is what are obtained without having to workLike the dividends paid by a stock.

“In that case you need capital. Then there are other passive incomes for which you don’t need money and are more difficult to obtain: creating a music CD, writing books, etc. Everything that is intellectual property can be turned into passive income”says the expert, referring to the royalty payments.

In the case of financial assets, Passive income is income earned periodically from holding. Before you have to acquire them with money, time or inheriting them, for example.

In the crypto world there are several ways to generate passive income thanks to decentralized finance. Staking is the best known and consists of earn interest in cryptocurrencies“, points to iProUP says Alex Becker, Content Manager at Decrypto.la.

Indeed, staking allows the user to block their assets for a time in exchange for a profit (interests). For example, whether holds USDT (stable cryptocurrency that follows the price of the dollar) for 30 days, you can get a return of 9% per year. It is an operation that can be compared with the traditional fixed term.

Furthermore, the investor decide how long you will block them for: 15, 30, 60, 90 or 120 days, depending on the offer. The longer you hold the principal, the more interest you’ll receive.

These investments have low risk, since yields are guaranteed by contracts smart in different protocols. The greatest vulnerability is in the possibility that these protocols fail or are hacked, so a good practice is to invest in projects that are audited and have high security standardsBecker advises.

Julián García, Data Science in Quantia, affirms indicates to iProUP that these protocols allow the investor to send their stablecoins and start generating profitability from minute 0.

Interest payments are made on a daily basis. on capital at the beginning of the day. At the time you want, the user is free to withdraw their money, as well as trade and earn interest in another cryptocurrency“, Add.

Likewise, he highlights that “this modality gives him the flexibility of use the capital at all times to operate and at the same time be generating profitability”. On the other hand, “currently, on platforms such as Quantia.io interest can be earned at a annual rate of 9.5% on stablecoins, 6% on Bitcoin and 6% on Ethereumamong other alternatives.

“As an example, The minimum salary in Argentina is $33,000. To earn that sum per month passivelyat a rate of 9.5% per annum, must be invest $22,830Garcia adds.

A key aspect is that the base returns achieved on fixed income instruments in the crypto ecosystem are much greater than that of a bankeither in pesos or dollars: with the first alternative you can earn up to 40% per annumwhile with a “green” fixed term in a traditional entity between 0.50% and 1.75%, provided that the funds are immobilized for one year.

What income alternatives do cryptocurrencies offer?

Another of the most used options to earn passive interest is Anchor Protocol, decentralized finance protocol that offers cryptocurrency loans. The users deposit Luna or Ether and withdraw UST, a “cryptodollar”, since it is a stablecoin with a price that follows the greenback. In exchange, he offers a 19% annual rate of return.

Anchor Protocol can be leveraged through a non-custodial wallet (Metamask, Trust Wallet or similar) to invest, request credits or lend cryptocurrencies in exchange for interest.

For it, the following steps must be followed:

  • Buy the Luna cryptocurrency on an exchange
  • Purchase UST on the Terra website (the LUNA and UST blockchain)
  • Connect the crypto wallet to the Anchor Protocol platform
  • Deposit the UST tokens in the section earn
  • The interest will be deposited in the account created for this purpose.

Those who do not know how a non-custodial wallet works can access Anchor Protocol by local exchanges that already began to yield in digital currencies (19% per annum).

What profit does cryptocurrency mining offer?

Another alternative to generate passive income is cryptocurrency mining: Instead of investing in a digital currency, you should allocate capital to equipment that allows “manufacturing” these assets.

As electricity is subsidized in much of the country, more and more people they set up their own “home farm” and they contribute their machines to a blockchain network to receive cryptocurrencies in return. In other words, they invest in equipment at the official dollar, pay for the cheapest energy in pesos and generate an asset that trades close to the blue.

Mining is the process by which transactions are validated and multiple interconnected computers are responsible for writing the data to the blockchain. In order for new operations to be registered, a “consensus mechanism” known as work test (PoW or proof of work), consisting of machines competing to solve a puzzle mathematical.

Those who do it first will receive the reward: the higher the processing power, the greater the chances of winning more. Therefore, the investment will depend on the magnitude that the investor look around, but there are always base costs to consider:

  • Equipment for mining: the price ranges between 800 and 20,000 dollars
  • The place: in the home itself if there are few teams and the room is soundproofed
  • The cooling of the machines: there is equipment to lower the temperature
  • Employees, if the operation scales

Another issue to consider is the taxes to carry out the activity legally, namely:

  • Profit: 25% on the difference between the purchase and the sale, as long as there is a return
  • VAT: the activity is not reached
  • Personal Property: the value of the equipment must be declared, which will determine the category
  • Gross Income: the rate depends on each provincial tax code

It is estimated that the recovery of the investment occurs within a period of eight months to two years. For example, two specific ASIC equipment to mine Bitcoin, with computing power of 13.5TH/S and a value less than u$s1,600will generate some $240 gross monthly income ($44,000)

A clear benefit of owning an asset is that after the creation/acquisition stage you don’t have to spend a lot of time or energy on it: once it’s “up and running”, you just have to make sure everything goes according to plan. Unlike a job, in which a employee must grant their time during a certain workload in exchange for a fixed remuneration.

For those who wish to enter passive income crypto instruments, Goncalves recommends “study and train. Learn about investments, marketing, sales, managing emotionsdealing with people, accounting, taxes, law, IT, web development, etc.

“You have to know a little bit of everything and that’s when the ideas start appearing and you’re going to reach a point where you say: ‘Look at all the opportunities to make money out there.’ Having multiple sources of income is important because decreases the risk: if a fountain falls you have others. So the education seems fundamental to me“, complete.

The crypto economy offers several options to earn some coins passively and have an income to reach the end of the month more comfortably. Educating yourself and encouraging yourself will be the keys to doing it in the most efficient way.

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