Is Crypto Staking a Good Idea for People New to Cryptocurrencies?

In 2009, Satoshi Nakamoto opened the doors to the next generation technology, blockchain, which is now proving to be what the globe was waiting for. 

Even with the resistance that came from the governments, one thing that is coming out now is that this technology is unstoppable. In 2009, only one cryptocurrency, Bitcoin (BTC), was the only crypto coin on the globe. However, about 13 years down the line, there are more than 6,000.

The good thing about blockchain technology is that it has come with a long list of products that you can use. One of these is crypto staking. If you are new to crypto staking, keep reading to learn what it is and get an answer to the big question, "should a new cryptocurrency owner stake his coins?"

What is Crypto Staking?

Crypto staking is the process of committing your coins over a specific period of time to help in confirming transactions. This only happens in blockchain networks that use proof of stake (PoS) protocol because users who commit their coins are allowed to act as nodes and help with network governance. There are two ways of staking:

●        Decentralized Staking: This method means that you stake your coins on your own. The process involves dedicating your computer to serve as a node and installing the blockchain client, such as Ethereum 2.0 Client. Then, you lock the coins on the network and ensure it stays online 24/7 during the selected period. This process might be too complex for a new crypto owner, and it is a good idea to go for the next method of using pools.

●        Centralized Staking: This involved using decentralized finance (DeFi) platforms to pool the coins together with those from other users. The good thing about using pools is that they are run by professionals. Therefore, you do not have to worry about the setup because the experts have already taken care of that. Once you stake your coins in a pool, all you can do is wait for passive income.

Benefits of Crypto Staking

The main advantage of staking your cryptos is that it allows you to earn some income on your coins. While it is okay to leave them sitting in your crypto wallet, staking them creates a new stream of passive revenue. Here are other benefits to anticipate:

●        You Do Not Lose Your Crypto Coins

The process of staking your coins only involves committing them to the selected blockchain network as opposed to selling them. Therefore, you will still have your coins at the end of the staking process. In addition, the coins will have earned you some interest. If you stake the coins over a long period, they can become your regular source of passive income. 

●        Gives You an Opportunity to Help Secure the Blockchain Network

Blockchains that use proof of stake (PoS) consensus protocols rely on nodes in their networks to secure them. This is done by increasing the number of nodes, helping with the confirmation of transactions and consensus-building. Again, you will also be called upon when important matters come up for a vote.

●        Environmentally Friendly

Another advantage of staking is that it uses less energy compared to mining. Again, you will not require expensive equipment, which means that even a beginner with standard computers can still stake. This is why staking is being considered the best alternative to mining. 

As you can see, staking comes with numerous benefits. Even if you are new to the crypto world, it will come in handy to help you create a new stream of revenue. Remember that it is paramount to work with a good DeFi Platform as a guarantee that you will always get your share. Visit Mantra Dao, one of the best DeFi Platforms today, for help. 

Coin Shark is not responsible for any content, accuracy, quality, advertising, products or other content posted on the site. The review is for informational purposes only, reflects only the opinion of the author and is not a proposal for action. The financial market is dangerous and full of risks, investments in cryptocurrencies can lead to losses. Users should do their own research before taking any action.

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