The previous generation of investors depended on companies to distribute their earnings as dividend for passive income. Companies dividend are centralized decisions and out of your control, e.g. similar to FED raising interest rates. Decentralization is the new buzzword. Can new economic incentives (proof-of-work, proof-of-stake, proof-of-authority and etc.) to validate decentralized blockchain become a source of passive income aka decentralized dividend for our future?
Consensus Mechanism: PoW, PoS, PoA, dBFT
Satoshi Nakamoto’s whitepaper on Bitcoin introduced the proof-of-work (PoW) consensus which involves investing in mining rigs that can solve computational problems to unlock passive income for nodes in the decentralized network. New models for nodes and network actors have been developed to achieve consensus as the industry matures. Read: further analysis on various consensus model. Can we then achieve passive and sustainable income by contributing to the blockchain?
Passive Income on Blockchain – Decentralized Dividend
Blockchain technology is still extremely young. Therefore, new ideas of token and network economies are still being tested and formalized. No one knows for sure if the passive income generated from being a node will be profitable and sustainable in the long run. We cannot even be sure if bitcoin mining will remain profitable after all 21 million bitcoins are mined.
Nonetheless, it is the perfect time to begin this experiment on investing for decentralized dividend. I intend to participate in the following blockchain networks in 2019 namely Ethereum (public blockchain), VeChain (public blockchain – Chinese), Republic Protocol (darkpool) and Dadi (decentralized cloud network). I chose these tokens because I can satisfy part or all of their staking requirements. While it also seems like a good time to participate in PoW due to cheaper mining rigs , I will have to invest additional capital to test out this idea.
Sustainability of Decentralized Dividend
Can anyone live off decentralized “dividends” from these projects? Stay tuned for the ROI as we progress and grow in 2019. If you are interested to discuss this idea, feel free to leave your comments below! This is an original article from TheCryptoHero – https://cryptohero8.com