Everything you need to know about Staking Crypto
The cryptocurrency era is here, and with it are multiple opportunities for people to make money. One of easiest ways to make money in the crypto space is through staking. So what exactly is staking? Staking simply stands for holding a cryptocurrency in your wallet for a fixed period, then earning interest on it. The reward that one earns from staking varies depending on the length of the time that they hold it. The longer the stake duration, the higher the returns.
Where can you stake cryptocurrency?
Staking is common with alt-coins. You cannot stake Bitcoin. That’s because bitcoin rewards people through a different system known as the proof-of-work system, where the reward is determined by how many coins a person mines.
What are the advantages of staking crypto?
One of the main advantages of staking is that it eliminates the need to invest in expensive mining hardware. You just need to buy the coins and hold them in your wallet. The next thing to do is to sit back and watch as your wallet balance grows in value. It’s quite an easy way to make money.
The other advantage of staking is that it gives you a guaranteed and predictable source of income. That’s because, the value of coin increases in predictable figures. It’s the same as putting money in a fixed account. You are always guaranteed of getting your money back.
Is there a downside to staking crypto?
Just like with everything else in life, staking has its drawdowns. The main drawdown to staking is that you lock up your coin for the period of the stake. This means you cannot sell your coins during this period. While this is not a problem when the coin is growing in value, it can lead to massive losses in a bear run. The amount you earn may not be enough to cover for the losses that you incur from your coin’s declining value.
Which major coins can an investor stake?
If you are looking to earn a passive income through staking, here are some of the major coins that you can stake.
Dash is one of the better known cryptocurrencies, whose key selling points are security and fast transaction speeds. You can stake Dash by running the Dash Masternode. However, for you to do this, you need to own at least 1000 Dash coins.
NEO is a Chinese alt-coin that rivals Ethereum on the smart contracts front. The great thing about staking NEO is that it doesn’t require you to keep your staking wallet open. On the aspect of returns, the average return when staking NEO is 5.5% per annum. That’s not a bad return since all you do is hold your coins.
OKCash is an alt-coin whose key selling point is speed and the ability to efficiently handle micro-transactions. The great thing about staking OKCash is the returns. A person staking OKCash can expect to earn up to 10% per annum, on top of value appreciation in the coin itself.
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