If your wanting to find out how to stake Chainlink to earn some passive income you’ve landed in the right place. Staking Chainlink is a good way of earning rewards in the form of LINK tokens. It involves the same processes as staking other kinds of cryptocurrency. It’s also a powerful way to compound your money on a monthly basis. Let’s first talk a little bit more about what staking is.
What is Crypto Staking?
Crypto staking involves locking up digital tokens in a crypto wallet in order to be chosen as a validator in a cryptocurrency network. Validators are highly essential to a decentralized network. They protect the network from falling to fraudulent transactions, hence maintaining its integrity. Validators are involved in verifying transactions on a blockchain in order to prevent double spending and secure the network.
Double spending simply means using the same digital currency for more than one transaction. With fiat currencies, this is not a problem because once you spend a currency note, you can’t retrieve it so you can spend it again. This is not the case for digital currency as it is not tangible. Without setting up a system to prevent double spending, anyone can easily make duplicates of their digital cash and use them for multiple transactions. Double spending is a real problem in cryptocurrency, and if not prevented, it will lead to inflation and eventually send the whole network crashing. This is what blockchain validators work to prevent. They check transactions in order to ensure that the sender of the cryptocurrency has the right to use that amount of currency. Once a transaction is verified, it is added to a “block”, which is then added to the blockchain when the size of the block reaches 1MB.
There are 2 systems with which validators can verify transactions on a blockchain. The first one, Proof of Work (PoW), requires validators (or miners) to compete to solve complex mathematical problems so as to win the right to verify transactions and earn their reward. This system is highly energy-consuming and requires the use of highly sophisticated computer hardware. On the other hand, Proof of Stake (PoS) requires validators to lock cryptocurrency in their wallets as a form of collateral before they are be chosen to verify transactions. The chosen validator is selected based on a number of factors. However, the higher your stake, the higher your chances of being chosen. PoS consumes less-energy than PoW because only one person is chosen to verify the transaction as opposed to thousands of people trying to solve a math problem before they can be allowed to verify.
Benefits of Staking Crypto
Staking crypto is a great way to earn investment income in the digital assets market. A new block is added to the blockchain the moment a validator successfully verifies transactions that are up to 1MB in size. Once this happens, new cryptocurrency is mined which is the validator receives as a reward. Asides this, staking consumes less energy compared to PoW and is less risky when compared to trading. It also removes the need to keep buying expensive mining hardware.
Another benefits of staking is that the value of your staked digital assets is only affected by market price fluctuations. It does not depreciate as with other mining hardware such as Application-Specific Integrated Circuit (ASIC). It is important to note that staking only rewards good behavior. Any attempt to attack the network, double-sign or perform any fraudulent act will result in the validator losing a portion (or the entirety) of their stake.
If you’re interested in staking Chainlink, you should find a crypto exchange that is secure and allows staking of the LINK token. BlockFi is an ideal crypto management platform that is secure, supports Chainlink staking, and offers amazing benefits.
Who Is BlockFi?
BlockFi is a trusted crypto management platform that allows you put your digital assets to good use. On BlockFi, you can earn up to 8.6% interest on your holdings every year. You can also buy and sell crypto, borrow USD against your cryptocurrency, and enjoy many bonus offers. As a BlockFi user, you won’t have to pay any hidden fee neither will you be required to maintain a minimum balance. You can also be rest assured that your digital assets are in safe hands as your cryptocurrency is insured against any loss by Gemini. The platform employs the use of two-factor authentication and other security measures to provide maximum security for your account. It is available for use across the world except in sanctioned countries.
Withdrawal fees on BlockFi are low compared to most cryptocurrency management platforms. In fact, you are entitled to one free withdrawal every month. BlockFi also supports (Automated Clearing House) ACH deposits so you don’t have to worry about having extensive cryptocurrency knowledge before you can make use of the platform.
Staking Chainlink on BlockFi attracts a reward of up to 5% of your initial stake per year, which is roughly an interest of 0.4167% per month. BlockFi supports up to 8 cryptocurrencies and as of February 2021,the yearly interests of USDC and GUSD stood at 8.6%. Bitcoin and Ethereum attracted yearly rewards of 6% and 4.5% respectively. You can grab a nice signup bonus for getting started on BlockFi by clicking here.
If you were looking for how to stake Chainlink we hope this helped you out. Staking crypto is an excellent way to earn passive income with your cryptocurrencies. It is secure and reliable especially when a trusted crypto management platform such as BlockFi is used. BlockFi provides a safe and highly rewarding way to stake crypto such as Chainlink. It can be used without having to pay any hidden fee in any country across the world, except in sanctioned countries. You only have to download the app from either Android or Apple playstore, complete a simple registration, and start enjoying the amazing features on the platform.