This is the age of cryptocurrencies, and many people are keen to find out how they can make money easily. Yes, you can make money staking cryptocurrencies, and this is relatively risk-free. Staking is akin to leaving your money in a fixed deposit account at your local bank. Let us delve into this a bit further.
The proof of stake algorithm
Staking derives primarily from the proof-of-stake algorithm, which governs many altcoins. By staking, you are locking your tokens in your wallet, and this is used to secure the network that issued it. It is also then used for transaction validation as well as to produce subsequent blocks. The production of new blocks leads to the winning of rewards which are then shared to all the participating wallet holders.
Staking has many advantages that are worth highlighting. The most prominent is the avoidance of expensive mining hardware. To mine bitcoin, critical hardware has to be acquired, but with POS tokens, this is not so. You only need to leave your tokens unused in your wallet and reap the rewards.
You also avoid the perils of the rise and fall in the market price in the daily trading of tokens and coins by using a platform such as Bitcoin rush crypto trading which uses Artificial Intelligence (AI) technologies to bet on the price swings of bitcoin. At each interval, you are sure to receive your staking reward, which you can decide to reinvest or sell for fiat.
How staking works
With staking, there are basic prerequisites for it to work. You need a crypto wallet, a staking coin or token, and a platform. A crypto wallet is the store for the tokens you hold at any time. The staking coin or token is the currency of the platform you are investing in. Many platforms are out there that enable crypto staking and they accept their native currencies.
You also need to know that each platform determines the rules that will apply when you participate in staking. The good news is that these terms and conditions are spelt out before the staking program commences. There is also a given period you need to leave your tokens unused for you to earn a staking reward. Otherwise, it makes no sense to say you have a fixed deposit when you withdraw from the account.
There is a fixed reward when you stake, and this is preset in the terms and conditions of each staking program. So, you can expect to have your wallet credited with the staking reward either on a monthly, or other specified timeframes. Most platforms also allow you to abandon the staking program if you so wish, and this will mean you will forfeit the expected rewards.
At present, although bitcoin is the most popular cryptocurrency, it is not available for staking as its algorithm does not support it. You primarily need to own some altcoins in other to participate in staking. If you do not have any altcoins in your wallet at present, you need to buy the staking token of your choice. Since staking largely revolve around altcoins, it is important that you know how to buy them.
There are more than 200 altcoins in the cryptocurrency marketplace today. You can learn how to buy altcoins easily and it is easy to do so. You can buy altcoins from a number of sources. The most popular at present is a cryptocurrency exchange. This is not to say that you cannot use the other available means. You can decide to use other platforms offering crypto in the place of fiat currencies. Platforms like Changelly, Uphold, and Skrill, among others, supports deposit from debit or credit cards in exchange for Bitcoin, Ethereum, and Bitcoin Cash. Some might support more cryptocurrencies as well.
If you decide to use a cryptocurrency exchange, you will need to use your email and/or mobile number to open an account. The registration confirmation link is sent to your email address, and you need to click the link in your inbox to use the platform. For security purposes, SMS confirmation will be sent to your mobile phone to authenticate transactions.
Once you have Ethereum at the very least, you can use the crypto exchange to swap it for any other staking token available.
What are the tokens I can stake?
Quite a number of cryptocurrencies can be staked for a monthly reward. Let us examine a few leading examples.
This platform is decentralized, and it facilitates the buying of goods and services using cryptocurrency. There are numerous terminals at several global retail outlets where shoppers can pay with their tokens. The platform accepts BTC, NPXS, and other ERC-20 tokens at present.
The way staking works here is that you are paid every month for every NPXS you have in your specialized Atomic Wallet. The rate paid for 2019 is 2.11637 percent monthly.
The term “Ethereum-Killer” was first used in reference to NEO. This China-based cryptocurrency platform also has its smart contract functionality that runs as open source. It also supports digital identities and digital assets. It is therefore supportive of companies, individuals, and governments with an interest in blockchain adoption.
NEO staking rewards are paid on the basis of 7 GAS tokens per block for every token holder on a monthly basis. If you have a Neon wallet, you will be able to automatically claim your rewards. If you hold your NEO with Binance wallet, you are also automatically credited with your staking reward.
Decred – DCR
This platform operates as a community-based venture with a high decentralized governance priority.
Its consensus algorithm is a hybrid of the proof-of-work used by bitcoin and the Ethereum blockchain’s proof of stake. This approach minimizes the incentive for miners to manipulate the platform. The reward mechanism here is based on the possession of voting tickers.
A new block gives the greenlight for rewards to be shared to all holders of voting tickets. A token holder has to buy voting tickets within the Decred wallet to be eligible. Each distribution of a block reward allocates 30 percent thereof to all voting tickets.
Staking can then be considered as a move towards reducing the energy-intensiveness associated with cryptocurrencies. With the proof of stake algorithm, staking can gain more grounds, and provide a sustainable means of rewarding crypto investors.