Cryptocurrency Staking: What is It and What you Need to Know

January 13, 2022
Knowledge Center » Blog » Cryptocurrency Staking: What is It and What you Need to Know

When you buy cryptocurrency, you are investing in it for the hope that its worth will go up. You are also hoping to get a profit by selling at the right time. But what if you don’t have enough funds on hand to invest in cryptocurrency? That is when Cryptocurrency Staking comes in handy!

What is cryptocurrency staking

Cryptocurrency staking is the process of securing a network of cryptocurrencies by using one's computing power. For example, being a node on the Monero network would require one to stake XMR. The more you have of a certain coin, the higher your chances are of being chosen to secure it. If you're chosen, you receive rewards in proportion to what amount you hold for doing so.

Types of Cryptocurrency Staking

There are 3 types of cryptocurrency staking: web, private and delegated. Web staking is the least secure and most basic option. Private staking is a little more secure but it costs money. Delegated staking is the best option because it's free and can be done from anywhere in the world.

Pros and Cons of Cryptocurrency

Cryptocurrency has become a popular way to earn money. However, it's not for everyone. The single biggest advantage of cryptocurrency is that it is decentralized and not controlled by any government or organization. This means that banks and banks cannot interfere with the value of the currency in any way and there is no regulation. It has not been influenced by financial downturns in the past and it does not implicate people in any fraudulent scheme like Ponzi scheme.

How to get started with cryptocurrency staking

One of the simplest methods to do so is by using staking apps. You will need an account, which can be created at no cost in many cases. Once you have obtained your account, you need to deposit your coins into it. Older coins are more likely to stake faster than newer ones, but this is not always the case.

Staking is a very simple and straightforward idea: you lock up some tokens and get rewarded for doing so. It’s an easy way to make money passively, although the rewards are often far smaller than your initial investment.

About Trevor English

Trevor is a technology journalist & engineer who has made a career out of engineering and technical communication. His work has appeared on Curiosity, BBC, Interesting Engineering and other sites across the web. Originally the Chief editor for Interesting Engineering back in 2016, he now works with software & tech companies, aiding them in content marketing and technical communication. Currently living in Texas, he’s also a published children’s book author and producer for the YouTube channel Concerning Reality.

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