Cryptocurrency Steaking
Money should work for the benefit of the owner and cryptocurrencies are no exception. If you can deposit your savings in a bank and earn interest, digital currencies can be staked and also profit from them. Steaking is a mechanism used in some blockchain networks to process internal transactions securely and transparently. And steaking is also a way to make passive income, because there is a reward for it. It doesn't require expensive equipment - just cryptocurrency.
What is steaking in cryptocurrency?
Stacking is a process whereby holders freeze their coins in a wallet to keep the blockchain network running. It is an environmentally friendly and energy-efficient alternative to mining that does not require high computing power. Staking allows for passive income and encourages long-term storage of cryptocurrency, which can help stabilize its exchange rate. Read more about what is steaking in cryptocurrency in our article!
How does crypto-stacking work?
Staking works based on a consensus mechanism that selects a network participant to add a new block to the blockchain based on the amount of cryptocurrency that the participant has "blocked". The algorithm makes the selection randomly, but the chances of being selected are proportional to the amount of "collateral" held. A participant who adds a new block receives a reward in the form of cryptocurrency. If he acts in bad faith, he risks losing his frozen assets. This approach prevents fraud. Want to learn more about how crypto-staking works? Already prepared an article for you!