Wouldn’t you like to be earning passive income as you sleep? Who wouldn’t, right? If you haven’t yet explored all that cryptocurrency has to offer, then you’re in for a treat.
Many cryptocurrencies now offer the ability to earn percentages much higher than traditional banking would. Through the process of crypto staking, this is now possible.
If the crypto market feels daunting do not fret. In this guide, you’ll learn all about crypto staking and what it can do for you. Learn what’s at stake below.
Proof of Work
Before you learn all about Proof of Stake (PoS) you’ll want to understand Proof of Work (PoW). For example, Bitcoin works under a Proof of Work system.
With Proof of Work, transactions are formed into blocks, thus creating the blockchain. Miners are rewarded with bitcoin as they solve complex mathematical equations. Whichever miner solves the problem first adds the next block.
Decentralized consensus is achieved under the Proof of Work model. One downside of Proof of Work is that it requires high-end computational power to do the job. While this model allows for the network to stay secure, it’s not the only one out there.
Proof of Stake
With Proof of Stake, you are still helping the network achieve decentralized consensus. Crypto staking differs in that participants “lock up” their crypto to maintain the blockchain operations. When stakers find a new block or add a new block, they are rewarded.
Proof of Stake blockchain networks have fast transactions and are scalable as well.
Where Can You Perform Crypto Staking?
The crypto you hold doesn’t need to just sit idly in your hardware wallet any longer. Below are some of the places that allow you to take advantage of crypto staking.
Due to a large number of people on their platforms, exchanges now offer crypto staking. Traders now have the option to diversify what they earn through the crypto market.
Binance and Coinbase both offer crypto staking on their respective exchanges. This includes but is not limited to the decentralized finance world of Ethereum 2.0 staking.
Available cryptos include Binance (BUSD), Binance Coin (BNB), DAI, and Tether (USDT).
Did you know you can perform crypto staking on a hardware wallet? This is a more secure option than an exchange since nothing is ever online. Your crypto is in your full custody.
Keep in mind that you’ll need to keep your coins staked at the same address. If you move them it will break up the lock-up period which will either delay or lose your staking rewards.
Staking as a Service
Exchanges and/or a hardware wallet offer crypto staking as an add-on. There are however dedicated crypto staking platforms such as gdao.
Stake your coins as you normally would and reap the benefits. You may have a percentage of your crypto rewards taken out. This is to pay the staking-as-a-service platform.
What’s at Stake?
Now you ought to have a better understanding of crypto staking. The beauty of crypto staking is its hands-off approach. Much like a savings account, you set it and forget it.
For a more hands-on approach, be sure to read up on our blog. Empower yourself with education and always do your research.