Kanalcoin.com – Crypto staking is an activity that is predicted to be the safest money field in the crypto sector. With staking, you don’t need to invest or trade a lot, but you can still earn profit from the crypto assets you have.
Cryptocurrency has indeed become an increasingly popular financial sector lately. Many people are interested in owning crypto assets because their value is considered more promising.
This can be seen from the increase in the value of locked crypto assets on the DeFi platform from US$867.35 million to US$59.44 billion. This figure clearly shows how much public attention is towards the crypto sector.
Along with these developments, more and more people are learning about crypto including how to trade, tips and tricks, even to fraudulent ways to profit from buying and selling crypto assets.
What is Crypto Staking?
One popular method that many people recommend because it can generate profit without having to invest is staking. Curious what crypto staking is? Check out the full explanation about crypto staking below!
Crypto staking is an activity in which traders validate transactions in the blockchain system using a proof-of-stake (PoS) mechanism.
The most important step in the crypto staking process is locking the crypto assets in the blockchain system. If you have a minimum balance to validate transactions on the blockchain, then you can lock up certain cryptocurrencies. When you can lock up a certain amount of crypto assets, you will get a reward or reward.
So, crypto staking is a condition when your assets are stored in the blockchain system for a certain period of time. This model is almost similar to time deposits in conventional banks. During the process of storing assets, you will receive interest from activities that occur in the crypto network.
Reasons for Staking
One of the reasons for staking crypto is to be able to get rewards in the form of interest from the crypto assets that we save. These rewards are given because we have helped the network to secure the blockchain system by entrusting certain assets.
This mechanism is similar to mining activities in a proof-of-work (PoW) system. The difference is, in PoS you don’t have to struggle to solve algorithms and math. You only need a sufficient amount of balance to be able to do staking.
So, why should you stake your crypto assets?
Crypto staking is an option that many traders do because it usually doesn’t cost much. In addition, the risk of staking is much smaller than when you trade.
The advantage of crypto staking is that when the staking process fails, you don’t lose too much because you can still sell your crypto assets. Through asset locking, you can wait until the price goes up and then sell it at a higher price to be able to make a profit.
Crypto staking is a method of locking up assets of various types. You are free to choose which staking to do. Generally, there are 3 types of staking that you can do in a crypto network, including:
1. Solo Staking
One type of crypto staking is Solo Staking. In this staking, you do all the process yourself. You need to prepare a minimum amount of wallet and crypto assets.
You must also have hardware or devices that are connected to a 24-hour non-stop crypto network with a stable internet connection. You can also use a virtual private server (VPS), which is not too complicated to maintain. You should also check the nodes to make sure the staking process is going well.
The advantage of Solo Staking is that you can monitor all network activity yourself. But if you are a beginner, we don’t recommend Solo Staking because the process is more complicated and the knowledge is more complex. If you are a beginner, you should choose Staking Pool or staking from an exchange service.
2. Staking Pool
Staking Pool in crypto staking is when you lock up assets together with a group of people. The combination of resources will increase the opportunity to validate the blockchain, so the chances of receiving rewards also increase.
The drawback of Staking Pool is that the prizes you get are not as many as solo crypto staking, because you have to share the profits with other people in the pool.
Even so, Staking Pool is recommended staking for beginners because it is more consistent and does not require a large balance.
Crypto exchange staking is a staking process that is carried out on exchanges or stock exchanges. Staking on the exchange is the easiest way to do it, especially for beginners. Some of the exchanges that provide staking services are Binance and Kraken.
When you are staking on the exchange, the locking process will happen automatically. Traders only need to check periodically to see how many rewards and profits they get from the staking process. To do this staking, you have to choose the right and trusted exchange.
How to Stake Crypto
The process of staking crypto is a process that is quite safe to do. You can follow the steps below to stake crypto.
1. Doing research related to crypto staking
Even though the process is quite safe, staking crypto is complicated and foreign to some people. Therefore, users are required to do research first regarding the crypto they want to stake.
2. Choose wallets
Wallet is a place where assets are locked. Wallet is provided by selected coin web network. All you have to do is download the wallet on the desired coin website.
3. Prepare funds or assets to be staked
You need to prepare a certain amount of assets because some stakes have a minimum limit. For example, the minimum stake for Dash is 1000 DASH and 32 ETH for Ether. However, there are also coins that have no minimum stake, such as NEO, PIVX, and PART.
4. Choose a staking pool or exchange
There are many exchanges and pools in the crypto space. So, we have to be careful in choosing it because staking on networks where there aren’t too many user entities can actually be detrimental.
5. Start Staking
If all processes are complete, you can start staking crypto assets. Unless you are doing Solo Staking, crypto staking is a passive activity. So, you don’t have to be online 24 hours. You only need to check it periodically to see the benefits you get.