Technology

What is Staking Cryptocurrency?

There are various ways to increase the number of cryptocurrency holdings. Some usually buy more coins through virtual money and few use a GPU as a mining software to get more coins after answering a few math questions. Another option to get more coins is to staking cryptocurrency. In this, you put some coins aside as safe coins which is a way to earn revenue along the way.

The Meaning of It:

Staking means locking up a specific amount of currency to get more coins for additional network rewards. You get rewards after staking as you have helped the cryptocurrency to be safe and secure. 

An Example:

This is similar to the process banks follow. If you give the bank money for a particular duration then after that duration, you get the money back with interest. That interest is the reward that bank gives you for allowing them to keep your money for a specified duration. Banks can give you a negative interest but coin staking will always yield positive results and there are no extra charges in the virtual currency world for exploring this as an option. 

Meaning of POS:

Staking is a way to validate blocks. Cryptocurrencies that support staking are known as Proof of Stake (POS). Proof of stake means Proof of work, but proof of work mining takes of electricity. You can only mine the number of coins you are staking. 

How much more coin can you mine or stake?

If you own 3% of a coin’s supply then you can only mine 3% of the blocks. This makes the mechanism a success and everyone has to go by the rules to be a part of the blockchain. There is several staking as a service platform in the market. As per your preference you can choose as to who will stake your coins of the cryptocurrency. 

To name a few staking as a service platform are:

  • Staked: this service platform supports Tezos, Decred, EOS, Livepeer as well as Factom. When you use their platform the results of annual returns can vary between 5-100%. The infrastructure of staking is secure.
  • Coinbase Custody: It is one of the biggest staking platforms in the market. It supports coins like Tezos. Their estimated annual return for your coins is about 6.6%. The users of Coinbase custody can chat with a bot or even make a call when they need help.

Other platforms are Figment Networks, Stake Capital, Dokia Capital and many more.

About the author

Lucy Moorhouse

Lucy Moorhouse

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