Staking offers a guaranteed return and predictable source of income for miners unlike proof of work system where coins are randomly rewarded to the most powerful computing systems.
What is Staking Coins?
Staking is the reward you receive for supporting the network by holding coins and running a node. If you have coins in a wallet that is a POS coin, your supply of coins will grow as long as you are holding the coins. Staking is also related to time. You are paid an amount based on an amount of time that has elapsed.
A Node is a device that connects to a network and uses peer-to-peer protocol that allows all nodes to communitcate with each other. In crypto, information is distributed among nodes and they maintain a blockchain. Generally, stake-able cryptocurrencies provide wallets that are also nodes on the blockchain network.
The major benefit of staking coins is that it removes the need to purchase expensive crypto-mining hardware. However, you may be required to keep a PC wallet running 24/7 or purchase a VPS.
Other Benefits of Staking
- Investors with enough coins can validate transactions on the network.
- The value of assets staked through PoS does not depreciate with time unlike ASIC, GPU and other mining hardware.
- Proof of stake is environmentally friendly and more energy efficient than proof of work mining used in Bitcoin.
- The threat of hacks is reduced in a staking coins network.
What are Masternodes?
Source: HODL altcoins
What are Staking/Masternode Pools?
Source: Crypto Buddy
Popular Coins to Stake
$KSC (KuCoin Shares)
One of the more popular exchange coins to stake, Kucoin Shares give traders and crytpo investors many benefits to use their exchange. For example, $ KCS holders receive 50% of all trader fees collected from the cryptocurrencies on the platform, plus a discount on fees.
Source: KuCoin Exchange
$DASH (Digital Cash)
One of the first currencies to introduce the coin staking system. DASH was built upon Bitcoin’s core. Further improvements were made by implementing PrivateSend and InstantSend features.
DASH allows its investors to stake coins through a masternode. The minimum requirement to run a masternode is 1,000 $DASH units.
Steemit provides‘Proof-of-Brain’community incentives. Proof-of-Brain is a type of tokens rewards algorithm that encourages people to create and curate content.
Tokens are distributed by “upvote” and “like”-based algorithms and can be integrated with websites to align incentives between application owners and community members to spur growth.
In essence Steemit is like Facebook running on a blockchain. The Steemit blockchain is home to many dApps (Decentralized Applications) similar to other social services like Instagram (SteepShot), YouTube (DTube), Twitch (DLive) and many others.
$SMART (Smart Cash)
SmartCash is a community-driven cryptocurrency built on the zerocash protocol. It prioritizes privacy and fast transaction times, with the goal of achieving merchant adoption. The project’s defining feature is its distrust of central authority, even forgoing a Foundation or core team.
Each wallet that holds more than 1,000 SMART will get paid a reward for holding that SMART over a 30 day period. The SmartRewards pay on the 25th of every month. If you’ve held 1000 SMART for over a month, you’ll receive a reward for not spending those tokens. The reward comes from the block reward allocation.
NEO is a smart economy using the blockchain technology. Participants on the platform can stake their coins by binding coins in a NEON wallet. Stakeholders can expect to earn new coins at 5.5% annually.
NEO is currently the number one currency at Bitfinex, a Chinese virtual currency exchange based at Hong Kong. (May change by time of reading.)
Popular Staking Pools
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