Is staking Bitcoin worth it in 2022? Well, that’s what we will be discussing in this article. Crypto has more than its fair share of complicated ideas; things are only as simple as how much of the ecosystem you wish to understand. Staking is one of those important ideas in crypto that few people understand. With staking, the central idea is that investors have a way of earning rewards for specific cryptocurrencies. In other words, staking provides a digital currency or token as a stake in a PoS (Proof-of-Stake) network.
The primary role of a stake is to confer integrity and security on a blockchain. As a result, stakers get newly minted coins as a reward. This article makes a case for investing in cryptocurrency, the benefits of staking crypto, besides various aspects of staking crypto.
Why Get Involved in Cryptocurrency?
Overs the years, events have proven that cryptocurrencies are not mere hype. There’s reason for the trend or method to the madness if you will. But why should you invest in cryptocurrency today? If you consider that traditional businesses are actively and creatively integrating cryptocurrency into their platforms, you’ll be dipping your toes in tested waters. Despite the odds, crypto continues to gain steam such that there are even more practical uses for it in everyday commerce.
Payment’s giant, Paypal, launched a service in 2020 to allow account holders buy, sell, hold crypto, or even use it to make purchases at 26 million unique merchants. In other words, crypto is now a valid means of exchange embraced by a growing army of businesses. Cryptocurrencies offer more choice, independence, and opportunity to consumer finances. They take care of gnawing faults modern banking by offering access directly to consumers. The decentralized nature is what makes this possible so it’s easier to buy, sell, store, or trade the current shining stars of the finance industry.
Putting a foot in the crypto door in these [not so] early days will prepare you for a great time of reward sooner or later. This may be counter-intuitive, especially as current crypto prices seem high. Yet, the future of crypto seems to only point north.
More countries are liberalizing their monetary policy to accommodate cryptocurrencies. In fact, South America’s El Salvador recently adopted Bitcoin as its currency with President Nayib Bukele predicting the asset could climb as high as $100,000 in 2022.
If you’re looking for one more reason to invest in cryptocurrency, you need to hear the experts. Several point out that new investment vehicles such as Bitcoin and Ethereum have the potential for massive gains. Cryptocurrency is a highly liquid investment asset comparable to any other in modern history.
Benefits to Staking Crypto
The typical long-term crypto holder considers staking with the aim of having their assets generate rewards for them. This option is more lucrative than letting it sit idle in their crypto wallets. Even with the possibility of earning more crypto, staking interest rates are impressive. There are opportunities to earn more than 10 or 20 percent per year
Besides generating more coins, staking improves the security and efficiency of the blockchain projects you’re backing. Staking a portion of your funds also makes the blockchain more resistant to attacks and more resilient in handling transactions. Other notable benefits to staking your crypto include:
- Not needing any equipment as would be the case in crypto mining.
- Being more environmentally friendly than crypto mining.
In addition, staking your crypto benefits the blockchain of your specific cryptocurrency. These cryptocurrencies depend on holders like you staking to verify transactions and keep the crypto engine running smoothly. Some projects even award “governance” tokens to staking participants, allowing holders to contribute to future changes and upgrades to the protocol.
Where Should You Stake Your Bitcoin?
Most people purchase Bitcoin and are merely excited to be part of such an innovative asset. As such, they look forward to holding their shiny prize for a few years. But Bitcoin has eased past the days of storing it safely away in a wallet until all trusted signals say “Sell!” But it’s a new day, and you can earn interest on your cryptocurrency and grow your digital asset holdings.
You can let your crypto do the heavy lifting, generating interest through lending platforms. Staking platforms also let you do the same, paying you interest when you lend crypto to borrowers. Enter BlockFi, a digital assets financial company offering financial services to individuals and businesses.
Headquartered in the US, BlockFi’s operations are worldwide, and its services include a revolutionary Bitcoin credit card. Users of the platform can register for an interest account to store their cryptocurrency assets, including Bitcoin and Ethereum on the platform for interest on the capital invested. You can even deposit your cryptocurrency holdings to obtain crypto-backed cash loans. Therefore, you’re not required to liquidate your assets and activate a capital gains tax event.
Keeping your Bitcoin on BlockFi allows the company to use it in crypto borrowing and lending besides other DeFi products. Individuals can then obtain a loan without a bank. Users can rely on the vast experience of BlockFi founders Zac Prince and Flori Marquez in leading multiple successful companies and managing large portfolios at large financial institutions such as Goldman Sachs.
Benefits of Using BlockFi
Security is an all-important factor whether you’re depositing cash at a bank or crypto on a platform such as BlockFi. One of the premium qualities of BlockFi is its secure design that mimics bank systems to keep your assets safe and secure under its control.
BlockFi only retains a fraction of client funds for withdrawal purposes with third parties including BitGo, Coinbase, and Gemini. The rest of the funds remain in cold storage wallets, while accounts use 2FA or two-factor authentication for protection. Crypto investors enjoy quality financial services on an ultra-straightforward platform. You’ll earn more crypto and grow your portfolio over the long term, with gravity-defying interest rates that traditional banks.
BlockFi users will enjoy excellent monthly interest payments, allowing crypto profits to compound over time. Indeed, the company’s compound interest policy is in the investor’s best interest.
Interest Rates for Bitcoin and Other Coins
Investors are keen on interest, and that’s really the whole point of investing an asset. Keeping your crypto on BlockFi can earn you up to 7.5 percent annual percentage yield (APY). Interest calculations are daily while payments are at the beginning of every month. There’s no minimum balance requirement for investors to earn interest. BlockFi interest rates depend on prevailing market dynamics for borrowing and lending. The aim is to practice sound risk management and maximize earnings for BlockFi Interest Account (BIA) clients.
Ethereum works via the public blockchain network and is an open platform for building decentralized applications. Their digital coin is Ether. Here is how the tiered structure functions for this cryptocurrency on BlockFi:
Tier 1 – 0-1.5 ETH → 5%
Tier 2 – 1.5-50 ETH → 1.5%
Tier 3 – 50+ ETH → 0.25%
A decentralized oracle network, Chainlink provides input on different forms of external data operating outside of the Blockchain.
Tier 1 – 0-100 LINK → 3.5%
Tier 2 – 100-500 LINK → 0.5%
Tier 3 – 500+ LINK → 0.1%
Basic Attention Token
Using the Brave web browser, Basic Attention Token is a blockchain system that monitors time and attention media consumers spend on websites.
Tier 1 – 0-4000 BAT → 3.25%
Tier 2 – 4000 – 20,000 BAT → 0.2%
Tier 3 – 20,000+ BAT → 0.1%
The last thing I wanted to touch on was the borrow feature. If you ever need to borrow money, the interest rate on here is low. It’s 4.5%, and they don’t even check your credit on here. So, if you have $10,000 in your account, you can borrow against your crypto. And if you do this responsibly, it’s smart. Now you do have to have a minimum of $10,000 into Ethereum, Bitcoin or Litecoin. More coins should become available for this feature in the future.
So is Bitcoin worth staking in 2022? Absolutely! Staking is a lucrative option for crypto you have no intention to trade soon. It’s a no-brainer to stake an asset that requires you to do nothing, while enabling you to earn even more crypto.
BlockFi provides greenhorn investors with a way to maximize gains from their crypto holdings. While it deals in only a handful of coins, the platform is an excellent outlet for long-term cryptocurrency holders with significant portfolio size. You’ll do well to leverage its exciting range of products and services.