We all remember people getting mad about mining a couple years ago, but where are all those miners now? Right, they are staking.
Unlike mining staking doesn’t require expensive tech and long hours to make it all work together bringing you money. Furthermore, considering the high scalability of modern blockchains mining crypto on your PC is no longer possible, because of how much computing power you need to participate in the Proof of Work.
We are sure all of you know what PoW is, but for those, who are new to crypto, Proof of Work is an algorithm, using the resources of miners’ computers to inspect and approve transactions.
PoS on the other hand doesn’t need any hardware. The only thing, you must own to reward from PoS are coins, you hold. You lend them to the project, making the net work properly, which is called staking.
Pros of such solution are obvious. Much more people can take part in the system and, as said earlier, there are less expenses. Mining also harms the nature because of it’s carbon footprint a lot.
When users allow the system to use their coins they get an opportunity to vote for changes inside this system. The bigger deposit you make - the more influence you have.
PoS blockchains have several rules of work:
- All the deposits are returned back to the investors in the same cryptocurrency, they deposited. Blockchains rarely reward their stakers in fiat, because that makes the reward dependant on the coin price and no one wants to lose their money due to price drops. This is why you mustn’t trust projects, offering staking with rewards in USD or Euro - they are most likely to be scams.
- Staking conditions always differ from user to user and that is connected to the demand of coin. Experienced traders always find the best deals first and can grab them immediately, leaving you the less desirable ones. If you are looking to make +20% of the coins, you invested in like a year - always check out the “Deal” section on project’s website to find the best offerings.
- Staking is a low risk - low entry threshold instrument, which means a high user number with high competition, so always keep an eye on all the upcoming projects.
- The longer stake period you choose - the more you will earn. It is simply useless for exchanges to offer you staking with free immediate withdrawal, because they can’t plan their tokenomics then. Imagine an exchange needing 5 ETH, you’ve staked for a year, while you return your coins with 5% gain in three months, leaving the exchange with debt - impossible!
But what are the best platforms to search for and stake coins?
Platforms don’t have any specific rating, those are just our top picks
- Even though Gemini tell us they don’t have anything to do with staking, their “Earn” feature allows you to make passive income from more than 43 currencies with annual earnings from 0.74% to 8.05%. Keep in mind, that the withdrawal might take up to 5 business days.
- Kraken claims the reward for highest annual earnings, coming in at 20% a year maximum. 10 currencies with no minimal staking time and weekly rewards available. Highly recommended for staking the main coins.
- BlockFi is similar to Gemini, only providing interest payments with no actual staking. Still, the ones who don’t mind all that complicated naming can earn up to 9.5% annually by holding 13 different currencies and receiving rewards monthly. Withdrawal might take fees, because of being available any time you want.
Our U.S. Hodlers can also use the Crypto.com platform for staking. However, you can only stake their native CRO token through the main Crypto.com app that’s why you need to either participate in their “Earn” program, featuring dozens of tokens with 14% maximum royalties or use their crypto wallet application with it’s own staking offerings.
To sum up, staking is a great alternative to mining, allowing all the enthusiasts to participate in developing blockchains and as you can clearly tell right now - the future is PoS!