If you are a Crypto investor, staking is a term you will hear often. Staking is the way in which every Crypto transaction is verified. In addition, it also allows users to take part in a reward system on the holdings.
Like many things in Crypto, Staking is one of the complicated concepts. The complexity of the staking is based on how many layers you want to understand.
For many investors, Staking is a way to earn something more out of their Crypto investments. But, even if you are looking to earn from staking, it is important to understand a little more details about Crypto Staking and how it works.
What Is Crypto Staking?
The concept of Crypto Staking comes from Proof Of Stake. Yes, you guessed it correctly; the same method was used to verify online transactions.
When it comes down to verifying any Cryptocurrencies transaction, there are two methods used:
Prove of Work.
Prove Of Stake.
Proof of Work selects people to validate the transactions based on who answers the complex questions. On the other hand, Proof of Stake selects the validation based on the number of coins they have.
To better understand what Crypto Staking is, consider Crypto trading platform as a bank, and you put money in the platform like a deposit. The bank uses Crypto to give loans. At the end of the year, you are rewarded with an interest in using our Crypto.
We know the concept might feel similar to how the banks work today, but it is not. To know more about Crypto staking, visit meta profit.
How Does Crypto Staking Works?
For a Crypto investor, Staking is like a passive activity. This is because investors put a part of their Crypto assets on the platform for the platform to use.
Just like savings or a fixed deposit.
Now, the platform has access to more Crypto assets to work with. The network can use the holding to forge new blocks of Blockchain. The more you are holding, the better you have odds that you will be selected.
Once the network uses your holding, information is written in the new blocks, and investors’ holdings are used to validate the new transactions.
How To Stake Crypto?
Crypto staking might be a simple process, but once you get used to it, you will get the hang of it.
Follow the step by step process:
Step 1: Buy Cryptocurrency That Uses Stake
Before starting with staking, let us tell you not all Cryptocurrencies offer to stake. So, if you want to earn rewards with staking, you need Cryptocurrencies that validate using proof Of Stake.
- Ethereum: It is the first Cryptocurrency with a Programmable Blockchain that can be used to create applications.
- Solano: It is designed for scalability as it offers fast transactions.
- Polkadot: It allows different Blockchain to connect and work with one another.
You will have a clear idea if you learn more about Proof Of Stake. This will help you understand how the rewards work and their process.
Step 2: Transfer The Crypto To Your Crypto Wallet
After buying the Cryptocurrencies, you will find them available on the Crypto Exchange platform. Now, to take part in Crypto staking, you can transfer Cryptocurrency to your Digital wallet.
Or perhaps, the Crypto trading platform has its own staking program. Just select the program, and the Cryptocurrency will be transferred directly.
However, if the platform does not have a staking program, you first need to transfer all your Cryptocurrency to your wallet and then initiate the depositing process.
Step 3: Join The Staking Pool
While you can do staking alone, most people take help from a staking pool for better returns. Crypto traders combine their funds to increase their chance of earning more staking rewards.
Joining the pool for staking comes with the followings:
- Reasonable fees.
Once you find a pool, stake your Cryptocurrencies through the wallet. That’s all you need to do. You will start earning rewards.
Start Crypto Staking!
Staking is a great way to earn passively out of your Crypto investment.
That said, to become a full-time validator, you need a substantial minimum investment, technical knowledge, and a dedicated computer that can validate the transactions.
Crypto staking is easy, as long as you understand how it works!