If you are a Cryptocurrency enthusiast and look forward to building a career in it then you must have thought about passive earnings through cryptocurrency staking. For those of you who are not familiar with what staking is, do not stress out. We will be telling you everything you need to know
What is staking?
In staking, you hold cryptocurrency for verifying crypto transactions and supporting the network. In return for these services, you get a reward. This reward is an interest. You can generate passive incomes by holding coins in staking.
Working of staking:
It may sound simple, but it is not that simple. It involves a proof-of-stake PoS mechanism. In this mechanism, new blocks are produced and verified through staking. There is no requirement for special computers to solve any difficult mathematical computation. The number of coins you hold determines how much reward you will get.
Conditions for staking:
Following rules should be followed if you are interested in staking
- Your wallet must be online 24/7
- It must support staking
- Coins need to be matured for a few days before you get any reward
- The amount may be minimum
Exchanges which offer staking:
Some major exchanges which offer to stake are
Earn passive income:
If you hold cryptocurrency coins or tokens, then you can use them to your advantage and earn high interests through them. BlockFi and Celsius network provides the facility of earning 10% interest per annum on the coins or tokens you hold. If you want to earn bigger interest rates, then you can purchase a stablecoin like Gemini Dollar or TRUEUSD by using your fiat currency.
Staking is not only a way for earning passive income by holding coins, but the more coins you hold the more power you rack up on the network. You must be clear that do you only want to earn interests, or you also want to have a right in voting for different issues on the network
When you stake a cryptocurrency, you receive a reward. This reward is a fixed percentage per year. This percentage is just an indication and it may change. You can receive rewards individually or by using a pool. In pools, many coin holders put their coins together for increasing the chances to validate a block.
Advantages of staking:
It is adopted by more and more investors because:
- Helps in generating passive income by holding coins instead of trading, so there is a lower risk of loss
- Expensive equipment is not needed, and anyone can join
- It is easy and simple to use.
- It is better than mining
Cryptos which can be staked:
Here is a list of popular staking coins and the annual interests offered by them
- Tezos with an interest rate of 7%
- Komodo with an interest rate of 5%
- QTUM with an interest rate of 4%
- Decred with an interest rate of 9%
- ICON with an interest rate of 19%
- ZCoin with an interest rate of 14%
- PIVX with an interest rate of 9%
Hope that now it is clear that how can you generate passive income through cryptocurrency staking.