{"id":3852,"date":"2021-11-10T00:15:00","date_gmt":"2021-11-10T08:15:00","guid":{"rendered":"https:\/\/www.cultofmoney.com\/?p=3852"},"modified":"2023-07-03T06:44:55","modified_gmt":"2023-07-03T14:44:55","slug":"what-is-staking-crypto","status":"publish","type":"post","link":"https:\/\/www.cultofmoney.com\/what-is-staking-crypto\/","title":{"rendered":"What Is Staking And How Can You Make Money With Your Crypto?"},"content":{"rendered":"
<\/span><\/p>\n In the early days of cryptocurrency, buying and holding or cryptocurrency mining were the two main ways to make money with the emerging asset class.But these days, cryptocurrency investors<\/a> have far more options. In fact, with cryptocurrency staking, you can now earn passive income just by holding various cryptocurrencies. Additionally, many coins and staking platforms pay a significantly higher interest rate than you can ever find with a high-yield savings account.However, staking cryptocurrency still carries risk. It\u2019s also important to understand the technology behind staking, which cryptocurrencies are best for generating income, and how to decide if staking crypto is right for you.<\/p>\n Pros<\/strong><\/p>\n Cons<\/strong><\/p>\n Cryptocurrency staking is the process of earning rewards by using your cryptocurrency to help validate blockchain transactions. For new investors, this might sound like pure jargon, but cryptocurrency staking is possible because many cryptos operate using Proof of Stake (PoS.)PoS is a consensus mechanism that many newer cryptocurrencies use to verify transactions and maintain blockchain integrity. With PoS, holders can stake their cryptocurrency, essentially locking it up so it can help validate new blockchain transactions. As validator nodes confirm transactions and add new blocks to the blockchain, stakers earn crypto rewards for their efforts.<\/p>\n In layman\u2019s terms, cryptocurrency staking basically means you\u2019re locking up your crypto to help keep the blockchain running smoothly. In exchange, you earn extra cryptocurrency as rewards. This is different from cryptocurrency mining, which is how cryptocurrencies like Bitcoin<\/a> validate new transactions and reward validators.Typically, the rewards you earn from staking are the same as the cryptocurrency you\u2019re staking. It\u2019s also worth noting that your chances of being chosen as a validator increase the more crypto you stake, so having skin in the game yields higher rewards.Cryptocurrency staking might sound complicated, but it\u2019s easy for investors to start staking since this protocol is how PoS-based cryptocurrencies validate new transactions.Many cryptocurrency exchanges<\/a> let you buy PoS cryptocurrencies and stake them to start earning rewards. Depending on the exchange and cryptocurrency you\u2019re staking, you might have to commit to a certain time period you\u2019re locking your crypto up for. You can\u2019t trade cryptocurrency during this time, but you still own what you\u2019re staking.<\/p>\n The staking platform you use and the cryptocurrency you stake also impact how much you earn and when you actually get rewards. For example, on Coinbase<\/a>, you can earn up to 5.0% APY by staking crypto. But some cryptocurrencies pay daily rewards while others pay weekly.<\/p>\n Buying cryptocurrencies that use PoS is the first step in staking crypto to generate income. And, the good news is there are several popular cryptocurrencies people stake, including:<\/p>\n These are just a few popular cryptocurrencies you can stake, but you have more options. Investors also stake cryptocurrencies like Dai and Tezos. And you can even stake USD Coin, which is a stablecoin that\u2019s value is pegged to the U.S. dollar.<\/p>\n Once you own a cryptocurrency that\u2019s eligible for staking, you\u2019re ready to actually stake it to begin earning rewards.Setting up your own validator node is one way to begin staking. But this requires some technical knowledge and responsibility. As mentioned, some cryptocurrencies also have minimum requirements to run your own node, like Etereum\u2019s 32 ETH requirement.<\/p>\n Because of these factors, many investors begin cryptocurrency staking by staking through a cryptocurrency wallet<\/a> or exchange. This lets you earn passive rewards from your holdings without having to worry about prohibitively expensive staking minimums or the technology behind the scenes.Several popular staking platforms<\/a> include:<\/p>\n If you want simplicity, exchanges like Coinbase or Kraken are the fastest way to start staking. But as more exchanges and wallets add support for cryptocurrency staking, opportunities are only going to expand in this space.<\/p>\n You can also find our list of the best cryptocurrency staking platforms here<\/a>.<\/p>\n If you want to earn rewards with your cryptocurrency, you might have seen companies like BlockFi<\/a> and Linus<\/a> advertising that you can earn up to 9.5% APY from your holdings. This sounds similar to staking, but companies like BlockFi and Linus are more like banks than staking pools.<\/p>\nPros And Cons Of Cryptocurrency Staking<\/h2>\n
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What Is Cryptocurrency Staking?<\/h2>\n
How Crypto Staking Works<\/h2>\n
Popular Cryptocurrencies For Staking<\/h2>\n
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How To Stake Cryptocurrencies – Popular Staking Exchanges And Wallets<\/h2>\n
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Cryptocurrency Staking vs. Lending – What\u2019s The Difference?<\/h2>\n