What Is Staking Crypto Coins? Quick Start Guide

What Does Staking Mean In Crypto?

Staking crypto is a method of obtaining coins based on the Proof-of-Stake (PoS) algorithm — Proof of Stake.

Proof Of Stake VS Proof Of Work

The formation of a block in cryptocurrencies via this algorithm occurs randomly. This is its key difference from PoW, where miners use hardware that selects the only correct number (nonce) to find a new block.

Staking Crypto Types According To The Consensus Algorithm

How Does Proof Of Stake Work?

Proof-of-Stake (PoS) algorithm is fundamentally different from the Proof of Work (POW) algorithm, where the network is supported by miners using powerful and expensive equipment. The POS algorithm allows participants to invest directly in the network itself, ensuring the operability of the blockchain with their capital. To stake funds, the user needs to freeze the balance at the address of his wallet.

What Is Leased Proof Of Stake (LPoS)?

This algorithm is very similar to the classic POS, but with minor differences.

Delegated Proof Of Stake (dPOS)

The dPOS algorithm makes it possible to participate in maintaining the health of the network, as well as in the distribution of staking rewards using a minimum amount of cryptocurrency.

Types Of Staking Crypto Depending By Location

DeFi Staking

The DeFi ( Decentralized Finance) marketplace is primarily built around the provision of liquidity. Users fill special pools of liquidity with their cryptocurrency, for which they receive a reward. Examples are AAVE, Compound, Uniswap, Bancor, 1inch projects.

Staking Stablecoins

Another interesting option for passive earnings is the profitable staking of stablecoins (USDT, USDC, BUSD). This option is ideal for those who are used to keeping most of their capital not in cryptocurrency, but in fiat. This option, of course, will not allow you to make money on the growth of cryptocurrency, but if you do not like it when your money is idle, feel free to try.

Staking Via Cryptocurrency Exchanges

The largest cryptocurrency exchanges also provide their users with the possibility of passive earnings. Often, large trading platforms launch their own nodes to validate PoS blockchains. This allows exchanges to receive a small percentage of validation, and also contributes to the accumulation of cryptocurrency assets within the site.

How To Stake Coins In Wallet?

We should also mention staking in mobile crypto wallets. This option may be convenient for the user due to its simplicity: no specialized knowledge is required. You just need to have a cryptocurrency on your balance sheet.

Summary Information On Staking Crypto

Even though the cryptocurrency market is relatively young, it already competes with the traditional banking system. The annual yield of some coins significantly exceeds the interest on the bank deposit. And the environmental friendliness of PoS blockchains largely surpasses not only the PoW algorithm, but also the banking sector (energy costs for service).

How To Buy Cryptocurrency?

Just go to StealthEX exchange and follow these easy steps:

  1. Choose the pair and the amount for your exchange. For example, BTC to ETH.
  2. Press the “Start exchange” button.
  3. Provide the recipient address to which the coins will be transferred.
  4. Move your cryptocurrency for the exchange.
  5. Receive your crypto coins!

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
StealthEX.io

StealthEX.io

A convenient cryptocurrency exchange. 600+ coins are available for exchange with the best floating and fixed rates. You can also buy crypto with a credit card!