Staking gives a great opportunity to earn additional rewards just for being an owner of cash and crypto assets. So a lot of investors find it a great way to earn a living, just by owning cryptocurrency of a certain type. But some investors are more down to earth and prefer to reach small goals instead of going big on every cryptocurrency. They try to gather all the information before making any decision. Anyway, we can say, that if you’ve got your own cryptocurrency portfolio and do nothing with it, you’re wasting your time. Just start staking your tokens to get additional outcomes literally out of nothing.
In this material, we’re going to make it clear, how to make money staking crypto without high risks and involvement. However, if you’ll not be satisfied, check out the comprehensive guide on https://globalcryptoexpert.com/university/how-to-make-money-with-crypto-staking/
How does staking work
Staking is a process of tokens, involved in transaction validation. It operates based on the PoS model (Proof-of-Stake). So cryptocurrency owners stake their coins on one side, and the blockchain wallet owners get the insurance that everything works well and pay rewards for token owners in a return.
So, any person, having a certain amount of a given cryptocurrency could participate in validation transactions and get rewards in return. There is no need for an owner to participate in any further actions, so staking in that sense is a great way of getting a passive outcome.
There are 2 basic roles in the staking process: nominator and validator. The first one deals with the basic steps of the process: ensuring security, giving rewards to token owners, and providing statistics. Nominators are those holders of cryptocurrencies, so their only task is to confirm transactions to any 16 validators of their own preference. Each of such transactions is usually called a “stake”.
Are all the cryptocurrencies available?
Staking can be performed only using those cryptos, based on the PoS model:
- EOS;
- Tezos;
- TRON;
- Cosmos.
Speaking about the largest (based on capitalization) and the most popular cryptocurrency altcoin, Ethereum, recently it was also switched to the PoS model. So now any owner of ETH tokens can take part in Ethereum 2.0 network, introducing staking as a new feature. This can be done just by becoming a validator and staking 32 ETH as a minimal amount.
What is a staking pool?
For single validation operations with small amounts, the rewards are also not that high. So to get more, you need to invest more. Not all new cryptocurrency owners are ready to invest more at the beginning of the process, which is normal. For this case, there’s a cheaper way to take part in the staking process – staking pools.
Staking pool is a service that makes it possible to create a consolidation of cryptocurrency owners just to maximize chances to get more outcome and share it between all the members, who took part in the validation process. So you don’t need to invest thousands of dollars to buy tokens, you can participate in a staking pool together with other investors to increase your outcome. Remember that such services also take additional charges as payment for their services.
Staking against mining
As it was previously mentioned, staking is based on the PoS-model. In other words, when you ask how to make money staking crypto, it can be described and answered as the more coins you are involved in the validation process, the more chances to get a great outcome. So the deciding factor, in this case, is the number of tokens you put into work.
But for mining, the deciding factor is completely different. Here the most important thing to determine how much you can get is the possibilities of your hardware: GPU, physical memory, and RAM. In general, the more calculating operations your PC can perform within a second, the more coins you can generate within a certain period.