There’s more than $1 trillion in circulating cryptocurrency. Some crypto relies on a concept called proof-of-stake (POS).
The market needs cryptocurrency holders to keep their money in the system to support this process. The interesting part about this is you can earn financial rewards for doing so.
Keep reading to learn more about crypto staking.
Crypto and Making Money
There are several ways you can make money with cryptocurrency. One of those methods involves crypto staking, where you can earn anywhere from a 5% to 20% annual yield on vested digital currency. The higher the return, the shorter amount of time you’ll likely receive returns.
Some cryptocurrencies have delivered a 10% to 12% annual yield consistently. As a result, they compete with the average interest rates of indexes. For example, you could stake coins with crypto and receive the same return as if you’d invested in the S&P 500.
What Is Crypto Staking?
Crypto staking is an investing method. It involves committing your digital currency to support a blockchain network. The network uses your currency to confirm transactions.
You can stake with any cryptocurrency that uses POS. This is a method a blockchain uses to process payments.
It’s more energy-efficient compared to using the proof-of-work model to process payments. You must use a crypto miner to make money verifying proof-of-work payments.
The miners use computing power to solve the math equations needed to provide proof-of-work. These miners need a lot of energy.
How Does Crypto Staking Work?
Crypto staking uses the POS model. The process adds blocks to the blockchain.
The proof-of-work model requires considerable computing power. That computing power consumes a lot of energy. As a result, cryptocurrencies such as Bitcoin have received harsh criticism from environmentalists.
Conversely, POS doesn’t require nearly as much computing power and energy consumption as proof-of-work. Also, it’s more scalable. This model can handle a much greater number of transactions.
Getting Into Crypto Staking
One of the biggest benefits of earning money with staking is you don’t have to invest in a crypto miner setup. Crypto mining is very resource intensive. It relies on heavily invested speculators who earn money for validating its blockchains.
However, you only need a small amount of crypto to get into staking. With just a small investment, you can become part of the future of blockchain.
Validation is a vital part of staking. The more you invest into staking validation, the more you earn.
However, most individual stakers don’t become validators. It requires a considerable upfront investment.
Let's look at what you need to get started with staking.
Buy the Right Cryptocurrency
You can’t stake with all cryptocurrencies. If you want to try your hand at staking, you must invest in crypto that uses POS validation. For example, you can invest in the following cryptocurrencies if you want to get into staking:
Avalanche (AVAX) Cardano (ADA) Ethereum (ETH) Harmony (ONE) Polkadot (DOT) Solana (SOL) It helps to begin by learning more about a particular cryptocurrency. For instance, you must learn how it works.
You must also learn about its staking rewards. Furthermore, you must learn how its staking process works.
This research will help you narrow down your options. Once you’ve made your decision, you can buy your crypto on an exchange like Binance or Kraken.
Transfer Your Crypto to a Wallet
Your crypto will become available once you’ve purchased it on an exchange. Once you’ve secured your crypto assets, you must transfer them into a wallet.
Currently, a wallet is the safest way to store your crypto. You can access a wallet immediately by downloading a free one online. Alternatively, you can buy a hardware wallet, which is like a secure drive that stores your crypto offline.
After you set up your wallet, choose the option to deposit crypto. Next, you’ll select the crypto you want to deposit.
This action will generate a wallet address. You must copy and paste that wallet address to the exchange to transfer your crypto assets from your wallet.
Sign Up for a Staking Pool
Now, your crypto is available for the staking pool. Staking works differently depending on the digital currency.
However, most crypto uses staking pools. With a staking pool, you have a better chance of earning rewards.
You should choose a staking pool that’s reliable. You want a pool with a history of as close to 100% uptime as possible. You don’t want to miss out on rewards because your staking pool server went down.
Staking pools usually charge a small fee based on your rewards. The amount of this fee will vary depending on the cryptocurrency. Usually, however, this fee ranges between 2% and 5%.
You may also want to consider the size of the pool. A blockchain is less likely to choose a small pool for validation. However, you’ll earn larger rewards in a small pool.
Enjoying the Benefits of Crypto Staking
Staking makes it easy to earn interest from your cryptocurrency. It doesn’t require a large investment in equipment, like with crypto mining.
As a crypto staker, you help to maintain the efficiency and security of the blockchain. Also, staking is much more environmentally friendly compared to mining.
You can earn a generous income with crypto staking. It’s a potentially profitable way to invest your digital assets.
Why HODL When You Can Earn?
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We also offer several ways for you to earn with your digital assets. Also, we offer crypto cards that make it easy for you to access and use your earnings.
Feel free to learn more about earning profit with our platform using cryptocurrency.