Staking in crypto is open to everyone who wishes to participate in the act. Whether you have been dealing with crypto for a long time or are a newbie, crypto staking is for you. Just like we have a savings account in a traditional bank, staking enables you to earn interest on your cryptocurrency.
The main function of staking remains the addition of new blocks to the blockchain. When assets are left in the digital wallet by an investor, new blocks are then constructed on the chain through the operation of a certain crypto network. During staking, blocks are made without particular mining software. Staking relies heavily on the coins invested by stakers.
Meanwhile, crypto marketing has made staking tokens easy by giving room to new elements like staking pools – they occur when various investors have their funds in a pool to increase the probability of validating blocks and receiving rewards. Also, people who stake are rewarded with interest payments (or staking rewards) after their tokens must have been locked for a particular period of time. The more you stake, the greater your crypto rewards.
Benefits to Staking Crypto
- Requires Less Energy and no internet
Staking hardly requires any computational power, thereby reducing energy usage. This remains a top indicator of the massive success recorded via staking. Less energy use makes it friendly when set side by side with mining. This is because it requires a lot of potential and energy. Also, with a good mobile phone and laptop, you can involve in staking.
Staking can be carried out without an access to the internet. This is usually referred to as “Cold staking,” meaning coins staking without an internet connection. In a situation where you forget you are even staking, you can have your stock left in the wallet as you will continue to earn interest.
- Safe and straightforward
Staking is easy to understand. It is also safe and effective in case of a breach or attack that could have an economic effect. Staking requires adequate knowledge and wit as it requires a simple procedure to operate. The procedure is to deposit coins purchased on the trades. It will increase the coin’s rate of your digital wallets.
- Pay Guarantee:
Staking crypto offers a sure and guaranteed interest that comes frequently. This procedure has proven to be more profitable than putting money in a savings account. Profit-making is a guarantee with crypto staking.
Can You Lose Money Staking?
Yes. You can. Staking involves some risks as well. Crypto is a volatile asset that ensures you get rewards from staking. Sometimes, your crypto needs to be locked for a period of time, and there is a possibility that you record one or two losses of some of the cryptocurrency you staked. This comes as a penalty for you if the market does not move as envisaged. You stand the chance of losing crypto through staking if:
– There is a market crash and the coins you stake lose value. This is also known as “impermanent loss.”
– The crypto exchange or staking pool you use is hacked.
Consequent to the above, it is most important that you are properly informed about everything involved in staking coins before delving into it.
Don’t Stake the Wrong Coins!
While we may not particularly establish coins you may buy which could be deemed wrong for staking, we can confirm to you that crypto hacking is a major way investors lose their assets in crypto staking. Therefore, the cryptocurrencies listed in this article are recommended for you to stake with. We know these cryptos are tested and trusted for staking, which is why we recommend them. The crypto exchanges listed below are also amazing platforms you can make use of.
For every crypto you decide to use, you are responsible for authenticating transactions through the validator of the platform. However, in case a firm cannot deploy its validator key – which can be due to different factors – the network penalizes the platform and a part of the currency staked is taken away.
Best Coins to Stake Right Now
1. Ethereum
Ethereum is regarded as the most popular altcoin. It provides more than only being regarded as a cryptocurrency for many crypto lovers and investors. ETH is the native token of Ethereum, and it has grown largely in value since its launch in 2015. Created by Vitalik Buterin, ether has experienced a tremendous increment in price from $0.311 in 2015 to approximately $4,800 (its highest rating, which came late last year). However, this comes with a lot of volatility.
2. Solana
Solana is a decentralized blockchain platform assisting users in building marketplaces or decentralized apps, launching SPL tokens, creating cryptocurrency wallets, authenticating transactions, and also earning rewards. It allows users to dispatch transactions to applications through single or multiple instructions based on individual requirements.
3. XRP
Designed to meet the rising demands of the financial services sector, Ripples is in existence as a money transfer network. XRP is the native currency of the Ripple network and, by market capitalization, has been repeatedly rated among the top 10 cryptocurrencies. Being a payment settlement platform and currency exchange system, it has successfully processed multiple transactions globally.
According to the CEO of Bitwave, Ripple was “designed from the very beginning to essentially be a replacement for SWIFT (a leading money transfer network) or to otherwise replace the settlement layer between major financial institutions.” XRP is a tested and trusted intermediary between two parties involved in the execution of a transaction. The network can rapidly confirm the successful completion of an exchange. Ripple can fasten exchanges for various cryptocurrencies and fiat currencies.
4. Bitcoin
Bitcoin is a type of digital cash that has replaced central authorities like governments or banks. Instead, Bitcoin uses what is known as a peer-to-peer internet network to confirm sales directly between users. Each Bitcoin represents a file kept in a digital wallet embedded in a smartphone or a computer.
Top 3 Staking Exchanges
1. Uphold
The Uphold cryptocurrency platform provides a clear and easy span of financial services and products. It enables users to sell, purchase or trade nearly 220 cryptocurrencies alongside other assets. You can get started on Uphold here.
Pros
- Transparent fee structure
- Ability to buy and trade across asset classes
Cons
- Lack of advanced trading features
- Cryptocurrencies on this platform are limited
2. Binance US
Binance US provides over 100 plus cryptocurrencies, allowing users to stake 19 different cryptos. These cryptos include Ethereum, Solana (SOL), Cardano (ADA), Polygon (MATIC) etc, and advertising yields as high as 12.5% annual percentage yield (APY). You can get started on Binance US here.
Pros
- Allows staking
- Easy-to-use
- Low fees, especially when with its main rivals
- Wide variety of cryptocurrencies supported
Cons
- Not available to all U.S. residents
3. Nexo
Nexo is a top exchange platform that enables its customers earns huge profits on their cryptocurrency (which is paid daily). It is a crypto avenue that also involves lending and borrowing. Despite its non-recognition as a decentralized app, Nexo uses blockchain technology and protocols on its platform to carry out transactions. You can get started on Nexo here.
Pros
- No lock-in period. Users can withdraw funds anytime
- Offers an easy-to-navigate mobile app and website
- Absolute support for business accounts
Cons
- Provides lesser educational materials when compared with its competitors
- Sometimes, Lender interest rates prove to be a little higher than borrowing rates
Final Thoughts
Crypto staking has come to stay in the cryptocurrency industry and is being embraced daily. The number of users who stake cryptocurrency continues to increase by the day, but investors should also understand that they can lose when they stake. Cryptocurrency itself is volatile and goes with the flow of the market, meaning it is not static but dynamic, moving every now and then.
Proper knowledge and understanding of the various currencies and exchanges discussed in this article will help an investor invest and stake in the right platform.
