Staking Cryptocurrency | Facts you need to be aware of
The dawn of the cryptocurrency era is at hand and it comes along with a variety of opportunities which people can use to earn money. Staking is one of the easiest ways you can use to earn money. What exactly do we mean by staking? It is simply the purchasing and holding of a particular cryptocurrency in your wallet, making profits off it. Profits earned from staking are dependent on the length of time the currency is held for. The longer you stake — the more profit you make.
When investing in staking coins it’s important to take into account some extra variables. What may seem like a free dividend on your existing coins can also eat away at your overall coin value via inflation. For example SPRTS Coin used to have a 500% inflation rate. So while you got tons of staking rewards, the value of those coins fell even quicker than inflation and your investment likely went backwards.
But, with that being said there are also some fantastic POS staking coin opportunities. Look for coins with the following:
- Reasonable inflation from staking rewards (1–5%)
- Maximum supply
- Burning of supply (ex. PIVX burns fees)
If you invest in quality POS coins you not only get to be a holder, you can also be a miner and rewarded as such. And the great thing about POS mining is that there are very few barriers to entry and almost anyone can become a miner.
WHERE CAN CRYPTOCURRENCY BE STAKED?
This method of earning is popular with alternative coins (AltCoins). Bitcoin cannot be staked. This is due to the fact that people are rewarded by bitcoin via a different system which is called the proof-of-work system. The determinant of this rewards is the number of coins the person mines.
All coins are staked through their wallets. It is always advised to run your own wallet and keep control of your cryptocurrency. However, there are staking pools that will stake your coins for you so you don’t have to run your own wallet.
WHAT ARE THE BENEFITS OF STAKING CRYPTOCURRENCY?
One major advantage of staking is the fact that it gets rid of the need to purchase mining hardware . All you need to do is to purchase the coins and hold in your wallet. After doing that, you can sit back and watch how the value of your wallets increases. This is a very easy method that you can use to earn extra cash.
Another benefit of crypto staking is that your source of income is predictable and guaranteed. This is due to the fact that coin value rises in predictable figures. This is similar to keeping money in a fixed account. There is always that guarantee that you will get your money back.
DOES STAKING CRYPTOCURRENCY HAVE DEMERITS AS WELL?
Staking also has setbacks like all other things in life. One major setback of staking is that your coin is locked up throughout the staking period. This means there is no way you can sell your coins while staking. Even though this may not be a problem when your coin is appreciating, there is the possibility that you can make huge losses in a bear run. The amount earned might not be able to cover the losses incurred when the coin’s value drops.
WHICH MAJOR COINS CAN YOU STAKE?
If you wish to earn extra cash from staking, it will be wise to invest in these major coins.
This is a cryptocurrency whose main selling point is the ability to handle micro-transactions efficiently and speed. The most awesome fact about staking OKCash is the profit it makes. Investors who stake OKCash make profits of up to 10% annually added to the profit gained from the coin’s appreciation.
Dash
NEO is an altcoin developed by the Chinese which rivals Ethereum when it comes to small contract fronts. The most visible benefit of staking NEO is the fact that you do not need to keep the wallet you use for staking open. Talking about profits made, NEO has an average staking return of 5.5% annually which is not bad assuming that all you have to do is hold your coins.
Reddcoin
Reddcoin makes cryptocurrency simple for the overall everyone. By integrating a digital currency platform seamlessly with major social networks, sending and receiving tips and micro-transactions are cheap, fast and rewarding for everyone.
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