Staking cryptos is one of the best methods of generating passive income. What is more impressive is that it is pretty easy: you simply lock your coins and wait for rewards. Staking involves holding your coins or tokens in a wallet or exchange over a specific period.
If you can hold your coins for a long time, the rewards will be even higher. However, crypto staking only works with proof of stake (POS) coins, such as (HI).
For a beginner, we must say that the process might look a little complex. This is why we have developed this guide to help simplify the process.
Staking Cryptocurrency: What Does It Mean?
This is the process of locking your cryptocurrencies to help with transaction validation in a selected blockchain network. In return, you get rewarded with a part of the transaction fee paid by users and tokens of the native network.
Crypto staking is done through a node, which is a computer connected to the blockchain network to validate transactions. This implies that staking helps to keep the blockchain network running flawlessly and avoid the risk of errors.
Pros and Cons of Staking Cryptos
Once your coins have been staked correctly, they are used to “mine” the next block to earn some rewards for incentivizing the system. This method is referred to as proof of stake (POS) protocol. The more coins you commit, the higher the chances of getting selected to mine the next block and getting rewarded. Although the reward mainly comes in the form of the same crypto coins, it is also possible to get it in a different type of reward.
Depending on the crypto of choice, you can earn 5-20% of the staked value per year. We must say that this is not a get-rich-quick method because you need to wait for some time to reap maximum rewards. If you get it right, this is an excellent way to maximize passive returns. Here is a summary of the pros:
- You are able to earn interest on crypto holdings.
- Easy because you do not need specialized equipment.
- Staking means you are helping to secure the crypto network and its efficiency.
- Less energy is required for crypto staking compared to mining.
When it comes to investing in cryptos, it is advisable to only consider it after understanding how blockchain systems work. For example, the risk of bugs getting into your wallet is always looming. It is because of this that you need to carefully weigh between crypto wallet vs exchange and decide where you will store the coins
Furthermore, it is important to appreciate that price fluctuations can easily result in unexpected losses. For people who store their coins in the exchanges, there is also a risk of hacking or exit scams. Therefore, you must start by comprehensively researching the exchange of choice.
Here is a summary of the risks:
- High volatility raises the danger of losing your coins.
- You are unable to do anything with your crypto coins during the staking period.
- The unstaking period usually takes longer than anticipated.
How to Stake Your Crypto Coins
Many crypto platforms have a fixed payment period. For example, hi pays participants an amount equal to 11% of staked coins every Friday. Other crypto networks have their models of rewarding stakers.
hi Dollar has grown to become one of the leading cryptos that you can stake to generate passive income daily. It is a non-profit banking system and the first cross-platform financial services based on social media chat tools. This means that you do not need to install anything to get started. Simply visit WhatsApp or Telegram to register for an account and start to stake cryptocurrency. Alternatively, you can register on its web app to buy hi Dollars directly.
Here is a summary of the main steps to follow to start staking your hi Dollars.
- Buy crypto that supports staking.
- Transfer the crypto to your hi wallet.
- Confirm receipt in your wallet.
- Enable staking from the wallet.
- Wait to collect the reward every Friday.