Passive Income Question Answer | Frequently Asked Question and Answer

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Passive Income Question Answer

Here, our Passive Income Question Answer carefully looks at all the important questions and answers relating to Passive Income Programs. The purpose of this section is to help our readers with answers to their questions. We hope the information provided on this page helps answer your questions and help clear fear, uncertainty and doubt (FUD).

Frequently Asked Questions and Answers

Now, this is where we answer all those important questions in order to clear the air. Furthermore, we hope this information will help you make important business decisions.

What is Bitcoin?

The 2008 financial crash paved way for Satoshi Nakamoto to release a white paper detailing new financial system based on mathematical models. Few months late, the Bitcoin group developed the first digital currency called Bitcoin (BTC). BTC is the first digital currency, created and held electronically, online and in offline wallets. Bitcoin is also known as, “Cryptocurrency”. This is due to it’s Crypto Coded nature. No one single person or government have control over it. No one can print BTC , like USD or EUR. Bitcoins are produced by people and businesses using computer hardware and software that solves mathematical problems.

What are Altcoins?

Bitcoin is the first Cryptocurrency, however, there are hundreds of other Cryptocurrencies. Therefore, these other Cryptocurrencies are also known as, “Altcoins”.  The word Altcoin is an abbreviation of “Bitcoin alternative”, and thus describes every Cryptocurrency except Bitcoin. Lastly, Altcoins are referred to as Bitcoin alternatives. This is because, these Altcoins are supposed to either replace or improve upon the original Bitcoin cryptography.

What is Passive Income?

Generally, Passive Income is the cash flow you create without physically participating. Therefore, Passive Income is more like an investment. Therefore, you just need to invest your money and the systems will take care of your income. Thus, interest earned from bank accounts and dividend from shares fall into Passive Income category. In recent times, with the ever rising cost of living, our day jobs are not enough to maintain our lifestyle. Thus, we try to create Passive Income. The main goal of Passive Income is to automate cash flow and earn us income while we sleep.

What is Compound Interest?

This explanation should make everything clear regarding Compound Interetst. Now, when you take out any size loan (principal), interest is calculated for the first period (1 month or 1 year). This interest is then added to the principal. Thus, following on from that, the interest for the next period is calculated. However, this calculation is based on the gross figure from the first period, and so on.

What is Portfolio Diversification?

Portfolio Diversification is the process on risk minimization with different asset classes in order to reduce the overall investment risk. Thus, avoid damaging a portfolio’s performance by the poor performance of a single security. The term, “never put all your eggs in 1 basked” is the most simplified example of Portfolio Diversification.

What is Cryptocurrency Mining and Cloud Mining?

Now, Bitcoin Cryptocurrency Mining is the process of confirming transactions using computer hardware and software, which can solve complex mathematical calculations. This process is also known as “mining”. However, the miners, be it a person or an organisation can go on to sell mining contacts to investor. Therefore, when these investors purchase mining contracts, they will be earning Passive Income (daily, weekly, monthly or annually) based on the terms and conditions. This is known as Cloud Mining.

What are Online Payment Processors?

The term “Online Payment Processors” are electronic gateways via the internet where a company (third party) appointed by a merchant to handle transactions from various channels such as credit cards and debit cards for merchant acquiring banks. Through these payment processors consumers are able to transact and buy good and services online in a safe and secure environment, where their personal information is protected.

What are Initial Coin Offerings?

The Initial Coin Offerings (ICOs) are referred to as tokens and are similar to shares of a company sold to investors in an Initial Public Offering (IPO) transaction. This is a cheap and a quick way for new startups to generate large funds in order to execute their projects. During ICO, tokens are sold very cheap. Investors are able to take advantage of cheap prices and sell the tokens later at the exchange (coin exchange platforms) at higher prices.

What are Coin Exchange Platforms?

Basically, Coin Exchange Platforms are digital marketplaces for buyer and sellers of Cryptocurrencies. Now, at the exchanges, Bitcoins can be exchanged for either fiat money or other Cryptocurrencies such as Litecoin. These coin exchanges are like the middleman for traders of Cryptocurrencies.

What is a Scam or a Ponzi Scheme?

Typically, a Scan or a Ponzi Scheme is a fraudulent investment operation. Whereby, these business create returns for older investors using money received from new investors. Now, businesses running Ponzi Schemes can be either individuals or organisations. These businesses are also known as high yield investment programs (HYIP). They offer abnormally high short-term returns that are unusually consistent. Avoid them at all cost.

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