Crypto Academy

Staking

Staking

6 min reading

Don’t hesitate to try cryptocurrency staking on bit4you!

Staking

Staking

Introduction

Staking is becoming one of the easiest and most effective methods of mining new currencies on the crypto market. According to Staked, the total amount of PoS currency staking incentives reached $18.9 billion by the end of 2021. According to the company’s specialists, this amount has nearly quadrupled since last year. This is due in large part to the excellent preparations for the introduction of Ethereum 2.0. This article explains what cryptocurrency staking is and informs that it is now available on bit4you.

What is staking?

Сryptocurrency staking is the holding of tokens on a cryptocurrency wallet or exchange platform. This is the way the network is kept operating. Staking also validates every new transaction that is added to the blockchain.  In turn, validators get rewards for securing blockchain transactions. Besides, staking is generally possible for currencies with Proof-of-Stake (PoS) blockchains consensus mechanism or one of its variants such as dPos, or Lease PoS. Staking, for example, can be complemented using a smart contract or DeFi-protocols. Moreover, there is no need to buy pricey equipment if you choose to stake cryptocurrency. The percentage of income depends on the coin chosen.

Types of staking

There are multiple kinds of staking:

  1. Proof of Stake (PoS). It makes use of the same blockchain that everyone is the most well-known. The distinction is that, instead of Proof-of-Work like in Bitcoin, the validator of the next block in PoS currency is chosen depending on the sum of PoS coins. All you need to do to receive a reward is have coins in your wallet.
  2. Delegated Proof of Stake (dPoS). This consensus approach addresses BTC’s scalability issues. dPoS is scalable, and it lies at the heart of the three active blockchains in use today. This algorithm is comparable to the democratic concept in that around twenty representatives are chosen to generate crypto coins and those who voted for them receive an income.
  3. Lease Proof of Stake. This algorithm enables any user to rent his money to quality nodes with good connections. Thus, small users will be able to obtain more frequent incentives. If a node invests enough, it can become a masternode. In turn, these nodes are more dependable than regular ones. For example, as in Dash, masternode staking is frequently paired with standard PoS or PoW (Proof of Work).

Staking or mining?

The underlying blockchain consensus process used to validate transactions is the primary distinction between mining and staking. Mining necessitates the use of specialized mining equipment (such as GPUs or ASICS), which consumes a significant amount of energy. However, mining demands more processing power and increases the chances of solving a math calculation, adding a block, and receiving a reward. According to Vitalik Buterin, staking is more ecologically sustainable and saves more than 99 % use. With staking, the more native tokens you hold, the more likely you are to be chosen to confirm new blocks. Because of the huge list of requirements, many PoS crypto holders prefer to entrust their funds to other users or cryptocurrency exchanges. Bit4you, like other prominent platforms, offers a locked staking option to its customers. Also, if you want to figure out what are PoS cryptocurrencies listed on bit4you, just visit bit4you Academy and check the cryptocurrency section.

Staking on bit4you

Today, Belgian cryptocurrency trading platform bit4you offers to stake crypto assets. This implies that customers get rewarded only for depositing and holding cryptocurrencies in their wallets. Users may trade and exchange tokens on bit4you as regular, getting incentives based on daily balance checks for any currency that supports staking. To cease getting staking rewards, just withdraw or sell a supported currency.

How to stake cryptocurrency on bit4you?

First, connect to your account and the Market menu. There will be a new section called “Earn.”. To proceed, you must accept the terms and conditions. After that, go through the list of coins that are accessible for staking. Be aware that the list of coins is constantly updating. The rate takes into account the APY percentage, available duration, the minimum number of coins required, and their availability. It’s worth noting that the Annual Percentage Yield shows the overall amount of staking rewards expected to be received for a year. By clicking the Stake button near the selected asset, you can specify how many coins you wish to lock for a defined amount of time. Then you’ll get the Earn summary, which includes the order, start and finish dates, and total expected gains. It is important to know that you cannot dispose of the locked coins during staking. Once you finish specifying all the details, click on “Stake Now”. However, you will receive a piece of reward every day. Additionally, the original amount of your coins will be unblocked after the end of the staking time. Finally, if you go to the Position tab, you will notice that it also shows the staked cryptocurrency on your balance.

Conclusions

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