![]() Ethereum ( ETH -1.55%) was the first cryptocurrency with a programmable blockchain that developers can use to create apps.Here are a few of the major cryptocurrencies you can stake and a little bit about each one: You need a cryptocurrency that validates transactions with proof of stake. Buy a cryptocurrency that uses proof of stake.Īs previously noted, not all cryptocurrencies offer staking. Here's how to stake crypto step by step: 1. Staking cryptocurrency may seem a little confusing the first time around, but it's a simple process once you get the hang of it. Image source: The Motley Fool How to stake crypto This also makes it a more scalable option that can handle greater numbers of transactions. Proof of stake, on the other hand, doesn't require nearly as much energy. ![]() Bitcoin ( BTC -0.98%) in particular has been criticized over environmental concerns. That has led to significant energy usage from cryptocurrencies that use proof of work. The problem with proof of work is that it requires considerable computing power. Many cryptos use the proof-of-work model to add blocks to their blockchains. It's only available with cryptocurrencies that use the proof-of-stake model. Staking isn't an option with all types of cryptocurrency. ![]() The unstaking process may not be immediate with some cryptocurrencies, you're required to stake coins for a minimum amount of time. You're essentially putting those staked coins to work, and you're free to unstake them later if you want to trade them. Your coins are still in your possession when you stake them. You can do this through many popular cryptocurrency exchanges. Then you can choose the amount you want to stake. If you want to stake crypto, you need to own a cryptocurrency that uses the proof-of-stake model. However, some blockchains use a different type of cryptocurrency for rewards. In most cases, the rewards are the same type of cryptocurrency that participants are staking. The more coins you pledge, the more likely you are to be chosen as a validator.Įvery time a block is added to the blockchain, new cryptocurrency coins are minted and distributed as staking rewards to that block's validator. From those participants, the protocol chooses validators to confirm blocks of transactions. With cryptocurrencies that use the proof-of-stake model, staking is how new transactions are added to the blockchain.įirst, participants pledge their coins to the cryptocurrency protocol. Before you get started, it's important to fully understand how crypto staking works. Staking can be a great way to use your crypto to generate passive income, especially because some cryptocurrencies offer high interest rates for staking. Proof of work requires mining devices that use computing power to solve mathematical equations. This is a more energy-efficient alternative to the original proof-of-work model. It's available with cryptocurrencies that use the proof-of-stake model to process payments.
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