What Is Staking
It doesn’t matter if you are looking for a complex idea or one that is simple. The key takeaway for many traders and investors is that Staking can be used to earn rewards for holding certain cryptocurrency. Even if you aren’t looking to make some staking money, it is helpful to learn a little about the process and how it works.
How It Work
How Does Staking Work
If your cryptocurrency allows you to stake — currently available options are Tezos, Cosmos and Ethereum (via the new upgrade), you have the option to “stake” some holdings and receive a percentage-rate return over time . You can think of a “staking pool” as a savings account that earns interest.
Your crypto will earn rewards when it is staked because the blockchain does its job. The consensus mechanism for cryptocurrencies that allow stakes is called Proof of Stake. This ensures that transactions are validated and secured without the involvement of a bank or any payment processor. If you stake your crypto, it becomes part of this process.