Mining
Mining essentially means using computing power to secure a network and receive a reward. While it does not require you to own cryptocurrencies, it is the oldest method of earning passive income in the cryptocurrency space.
In the early days of Bitcoin, mining on a Central Processing Unit (CPU) daily was a viable solution. As the network's hash rate increased, most miners began to use more powerful Graphics Processing Units (GPUs). As competition increased even further, it became almost exclusively the domain of Application-Specific Integrated Circuits (ASICs) – electronics that use mining chips made specifically for that purpose.
The ASIC industry is highly competitive and dominated by companies with significant resources available for deployment in research and development. By the time these chips reach the retail market, they are likely already outdated and would take a considerable amount of mining time to reach the break-even point.
As such, Bitcoin mining has primarily become a corporate business rather than a viable source of passive income for the average individual.
On the other hand, mining Proof of Work coins with a lower hash rate can still be a profitable venture for some. In these networks, the use of GPUs may still be viable. Mining lesser-known coins brings a potentially higher reward but also presents a greater risk. The mined coins may lose value overnight, have low liquidity, suffer a bug, or be affected by many other factors.
It is worth noting that setting up and maintaining mining equipment requires an initial investment and some technical knowledge.
