In this guide, we’ll cover everything you need to know about staking: what it is; why it’s so popular; how and where to begin; risks involved with staking—and how to use it to earn some passive income! If you’re looking to buy and hold your favorite cryptocurrencies, we advise you to read on.
First and foremost, staking is the act of holding funds in a cryptocurrency wallet to support the operations of a blockchain network. Essentially, it consists of locking cryptocurrencies to receive rewards. You can stake coins like Bitcoin, Ethereum and Litecoin on platforms that offer staking services.
Coin staking is becoming more popular across different industries as an alternative form of earning income from crypto assets. Staking allows users to earn additional tokens by contributing their computer power towards mining blocks for the blockchain network, which in turn can be used for various purposes such as paying transaction fees or buying items online with merchants who accept crypto payments.
There are plenty of reasons why people decide to get involved with cryptocurrency staking:
In some cases, the reward comes in units of the staked cryptocurrency; other networks offer a different token as a reward. You can earn rewards in a number of ways. Some staking networks reward users with new tokens, while others offer a different token as the reward.
So how and why has staking become so popular?
Staking can pose a low-risk activity for investors who want to earn passive income, but it also has the potential to become a profitable, long-term investment. Stakers earn rewards by helping blockchains do their job of verifying transactions and preventing double spending. In doing so, they help protect the security of these networks by ensuring honest behavior on behalf of users and preventing malicious actors from sabotaging transactions or stealing coins from others’ accounts.
The difference is that instead of earning interest, you are helping to validate transactions on the blockchain and are earning rewards for doing so. The more you stake, the more likely you will be chosen as a validator and earn rewards.
As well as being low-risk, carrying little risk of loss or fraud, staking has the added benefit of contributing to the security and efficiency of the blockchain projects you support. By staking some of your funds, you make the blockchain more resistant to attacks and strengthen its ability to process transactions.
Investors also like that they don’t have to commit as much time and energy to active trading, research and monitoring to participate in staking. Unlike active trading, staking requires little to no research and monitoring. Staking is also a less time-consuming investment option than day trading.
Staking a form of passive income, meaning you don’t have to do anything once your coins are deposited with a staking pool or platform—the funds just start generating revenue automatically. Compared to trading cryptocurrencies or buying into ICOs (Initial Coin Offerings), there are fewer risks involved with staking because the gains come from simply holding coins rather than from making decisions about when and where to invest them. Additionally, since there aren’t any special skills required for successful long-term investing in digital assets like bitcoins or ethers, all you need is some free time on your hands.
To conclude, if you’re looking to invest in cryptocurrencies and want to earn a steady return on your investment, then staking could be the ideal solution. It’s easy to get started and offers plenty of returns for the risk involved. We are excited to announce that as Intelly, we have plans to integrate staking into our Real Estate projects, which we will offer further information on soon.