Digital Assets and the Potential of Passive Income
Passive income is something that many people would like to make, however, that many also struggle to figure out how to earn. Some people create passive income through owning real estate and leasing it to tenants, others make it through royalties on works of literary or musical art, etc. There are many different ways to generate a passive income stream. But, there is one relatively new passive income generating method that is often overlooked. This method is through digital assets, and more specifically, certain cryptocurrencies.
Understanding Cryptocurrencies
Cryptocurrencies are digital currencies that exist only online. The most famous, and also the most valuable of these currencies is bitcoin, which currently is valued at roughly $10,000 per coin. However, there are thousands of other cryptocurrencies.Many people have chosen to invest in cryptocurrencies simply because their value tends to increase over time, at least for the primary ones. For example, when bitcoin first came out in 2009, it was only worth about 5 cents. So, its price has gone up roughly $9,999.95 in less than ten years.
However, although cryptocurrencies can make people money simply by rising in value over time, some cryptocurrencies also have the potential to generate passive income for the people who own them. Here is a closer look at how ethereum is able to do this.
Ethereum’s passive income potential
Air Drops
There are several ways in which ethereum, and which several other select cryptocurrencies can generate passive income. The first is with the “air drop.” An air drop is when holders of ethereum coins, a.k.a. “ether,” are automatically given money any time that a new cryptocurrency is created from the ethereum blockchain.
Essentially what this means is that, whenever a different or alternative version of ethereum is created, then whomever owns ether will be given an equivalent amount of the new token upon its launch. This is like being given free money, and it is very exciting for people who receive it. Ethereum has already been split into multiple versions. For example, now there is ethereum and ethereum classic. Anyone holding the original version received an air drop for an equivalent amount of the new version, and essentially received free passive income.
Several other cryptocurrencies have also undergone hard forks resulting in air drops. Bitcoin, for example, went through a hard fork in the summer of 2017, which resulted in a new cryptocurrency based on the bitcoin blockchain called bitcoin cash. Anyone holding bitcoin at the time of this hard fork received an equal amount of bitcoin cash. So, if you owned 5 bitcoins at the time of the start, you would have automatically been given 5 bitcoin cash tokens as soon as bitcoin cash went live. However, although this type of cryptocurrency passive income is very intriguing, there is another way to receive passive income from cryptocurrencies like ethereum.
Transaction validations
Many people generate passive income with ethereum through what is called “proof of work” mining. In this process, people use special computers to run software programs which validate ethereum transactions by solving complex mathematical codes. When they do this successfully, they are rewarded with a certain amount of ether.
However, although it is possible to generate a lot of passive income this way, running these computers can require a lot of money to be paid in electricity costs. But, in the near future, ethereum transactions may be able to be validated with the so-called “proof of stake” method. This method is much less reliant on special computers and large amounts of electricity.
With the proof of stake method, ethereum transactions will be able to be validated by people who own ether. Instead of a code being solved to give a transaction legitimacy, a person’s stake in ethereum will be used to give the transaction legitimacy. This is a different type of mining, and it will enable many more people to be able to mine ethereum. Thus, in the process, it can create the potential for many more people to create passive income using the ethereum cryptocurrency.
Because this method of transaction validation helps to reward people for buying ethereum, and it helps to emphasize decentralization, it is highly likely that it will be implemented sooner rather than later. So, this could be another fantastic way to earn passive income with ethereum.
Weighing your options
Many people have become interested in investing in digital assets like cryptocurrencies because they seem to be rising immensely in popularity. However, although investing in these cryptocurrencies can be very exciting, there is also a lot of price volatility in the cryptocurrency market right now. This is because the market is essentially going through growing pains as it strives to find equilibrium.
Both bitcoin and ethereum could be good investment choices for you if you are trying to decide which cryptocurrency to invest in. Bitcoin has become known for being a good store of value, and is even frequently referred to as “digital gold.” However, ethereum may have the better passive income potential because of the fact that it has air drops, and it may soon have proof of stake transaction validation as well.
Further, another key reason why ethereum is appealing is because it is optimized for “smart contracts.” Smart contracts are contracts that can be executed without assistance from a third party such as a lawyer. In a smart contract one person will agree to give a certain amount of ethereum, and the other person meets a certain requirement. To picture this, imagine a vending machine; the person inputs money, and when the machine calculates that enough money has been put in, it drops down the specified item.
Ethereum is the ideal blockchain for running smart contracts because it is specifically designed to cater to them. Smart contracts can be useful across many different industries. Industries such as real estate, automobile, and even government can benefit from smart contracts.
So, essentially, if you are looking for a cryptocurrency to get involved with, then you should strongly consider ethereum because it is significant passive income potential, and because it is optimized for smart contracts, which could become increasingly useful in the near future. Further, ethereum is the second largest cryptocurrency by market cap and it is also one of the most popular. These things help to fuel its momentum as well.
How the Tesla Model 3 Will Disrupt the Auto Industry
Ever since the automobile was invented in the late 1880’s, gasoline and diesel have been the predominant fuel sources for these vehicles. Cars running on alternative fuel sources, such as electricity, have been available for sale for much of the time since the age of the car began. However, electric vehicles have remained largely a niche market that catered toward the environmentally conscious, or the stylish, higher-end clientele.
Enter Tesla
Since its founding in 2003, Tesla Motors has been putting out high-end luxury electric vehicles. Although these vehicles have received enormous praise for their environmental benefits, their safety, and their sleek design, Tesla vehicles have been out of reach for most American consumers due to their high prices.
In fact, with prices ranging from between $60,000-150,000, Tesla vehicles have been unattainable for most consumers since they first came to market. However, with a price tag set for $35,000, Tesla’s latest vehicle, the Model 3, will actually be affordable for millions of people.
The Model 3
The Model three will include many of the signature Tesla components such as an impressive, elegant design, high range charges, and high safety ratings. In fact, Elon musk claims that the Model 3 will have a range of 215 miles, and promises that it will achieve 5 star crash ratings.
Additionally, Musk also says that the car will go from zero to sixty mph in 6 seconds, and will even have an autopilot feature. What this all amounts to is that within the next year or two, Tesla is going to give the world an incredibly high performing electric vehicle that is not only beautiful, but is extremely functional, and can even drive itself. This is could completely change the auto industry.
Implications of the Model 3
Increased Electric Car Demand
The first major implication of the Tesla Model 3 is that enormous volumes of people are probably going to want to buy these vehicles. In fact, 115,000 people put deposits on these cars before the Model 3 was even displayed to the public! If that many people spent money on the Model 3 before they even saw what it looked like, the number of people who actually buy them could be staggering.
These means that for the first time in modern history, long-range, affordable electric cars could become a true rival for internal combustion-based gas powered vehicles. This represents a genuine change in the auto industry. It means that electric cars may finally break out of niche markets, and flood into the mainstream mass consumer market.
The Model 3 seems to be appearing at the perfect intersection of increasing concern about the dangers of hydrocarbon fuels, and increasing electric vehicle technology. Much of the increasing electric vehicle technology has, of course, been pioneered by Tesla Itself.
Increased Electric Car Competition
Other automakers are sure to take notice of the interest that the Tesla Model 3 is generating. If the Tesla Roadster, Model S, and Model X did not concern them, then the Model 3 is definitely likely to do so. This is because the Model 3 will be direct competition to cars in the primary, as opposed to luxury, auto market.
Major auto makers are unlikely to willingly concede market share to Tesla easily. So, there is a great chance that major automakers will look to create electric vehicles to compete with Tesla. In fact, Chevrolet has already begun competing with Tesla in the long-range electric vehicle space with its Volt line.
All of this increased competition in the electric vehicle space could cause the percentage of electric vehicles to on the road to significantly increase. In fact, some sources predict that over half of U.S. cars will be electric by 2030.
Cleaner Environment
If the real figures for increased demand and competition for electric vehicles are anywhere near as high as some of the projections are, then the world may be using substantially fewer amounts of fossil fuels in the coming decades. This can lead to a cleaner environment.
In fact, if over half of the cars on the American roads were electric, it would mean that Americans would use 2.4 million fewer barrels of oil every single day. This would equate to a reduction of greenhouse gas emissions by 400 million metric tons of carbon dioxide annually. That would be an enormous positive change.
Conclusion
Due to rapid innovation in the electric car industry, electric cars are becoming cheaper and cheaper to produce, and their ranges are becoming longer and longer. This means that their appeal to the average consumer is only like to grow in the coming years.
Tesla, once an outsider to the major American auto manufacturers, could be poised to increase its market share with the Model 3. How much of this market share it will earn, and exactly how much change it will bring is yet to be determined. However, one thing is certain; the time for electric cars to be a fringe product is over.