David Linhart

Cryptocurrency staking New money allows you to earn in different ways - an alternative to mining is cryptocurrency staking. It allows the owner of the cryptocurrency to receive passive income, containing the coins in the Proof-of-Stake protection algorithm, in which the amount of the owner's crypt matters, and not the computing power, as in Proof-of-Work (English - "proof of work done"). Therefore, for those who do not own a powerful farm, staking an exchange is a suitable way to passively earn money. Staking is rapidly gaining popularity for various reasons - this is the reluctance to invest in hardware (which is not easy to get now), and profitable in terms of risks and the absence of the need to monitor the process all the time (as in mining), and higher environmental friendliness - since such high electricity costs. Staking is a much more open way for those who want to join the work with the blockchain, since it has a lower entry threshold. But to start, most likely, significant investments in staking wallets will be required, which should initially contain a large number of coins. Therefore, when choosing a cryptocurrency for investment, the user must know the amount that he can spend on coins as an initial investment. Now many companies are increasingly focusing on staking, Ethereum promises to switch to this technology, which can completely change the role of ether in the market of alternative coins. Now there is a discussion about the benefits of staking, supporters name the above-described advantages, opponents talk about centralization, a slowdown in the turnover of new money and a limited amount of space for tokens on some wallets, which creates problems. How staking works For maintaining the blockchain, token holders receive a reward proportional to the size of their wallets - this is a simple explanation of how staking works. This is possible thanks to the aforementioned PoS algorithm launched in 2012. During the formation of the next blocks, a data transaction occurs, and the algorithm checks its truth by assessing the number of cryptocurrencies in the user's wallet, then updates the data and repeats the process. There are several variations of PoS: proof of speed, disk space, full block storage, and others. Earnings on staking To get a stable income on staking, you must first choose the coin that supports it. Among them are Nxt, Lisk, Cosmos, Cardano, Tezos and some others. Since the holders of the largest number of coins receive more profit, before making money on staking, it is necessary to invest in the purchase of the required crypto tokens. Many people prefer staking precisely because they acquire assets, and not a means of extracting them, as with mining, and there is no need to calculate how much to spend on electricity. What is the percentage of staking On the surface, income from working with stakes works simply - the percentage of staking earned depends on investments in the blockchain node and participation in the creation of a new block. Often they try to present this as passive earnings on interest in the bank. Indeed, the profitability of staking is guaranteed by the system, and the smart contract provides protection, but this income is still tied to the rate of the chosen coin. Coins can be unprofitable due to the volatility of the exchange rate, which determines the profit. Therefore, when choosing a staking, you must first understand the market.