Two Ways to Easily Earn Passive Income With Ethereum
As a proponent of dividend investing, I am a big fan of earning passive income and the compounding results that reinvesting this income can have on your portfolio over time. I'm also a crypto investor, so Ethereum's (CRYPTO: ETH) transition to proof of stake (PoS), which gives everyday Ethereum users the ability to generate passive income from their holdings by staking Ethereum, was music to my ears. Let's take a look at the ins and outs of earning passive income with Ethereum and why this makes the second-largest cryptocurrency more appealing than ever.
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An Ethereum holder can earn staking fees by running their own validator node to process transactions and to help secure the Ethereum network. However, one needs to own and commit 32 ETH, or ether, tokens to do this, which at a cost of about $32,000 can be prohibitive for many investors. In addition to the upfront cost, running a validator node comes with other barriers to entry, because setting one up takes some technical know-how, and a validator needs to be online "as much as possible" to process transactions and to keep the network running efficiently, accord to the Ethereum Foundation. Furthermore, running a validator comes with some risk, because a validator who acts improperly can have its ETH "slashed" as a penalty, and can even lose their entire 32 ETH in a worst-case scenario. The good news is that a number of services are making it easier than ever for retail investors and more casual crypto users to generate staking rewards on their investments with smaller amounts of ETH and with less active involvement.
Source Fool.com
