El Salvador President Nayib Bukele took a victory lap on Monday after the Bank of England’s British pound rapidly depreciated against the dollar. The institution has since resumed quantitative easing. Its action marks a clear pivot that many in the Bitcoin community predicted central banks would be forced into months in advance. Bukele’s Callout Bukele tagged the Bank of England with a triumphant “Told you,” over Twitter, scoring over 14,000 like and 2000 retweets from his followers. His brief comment…
In 2009, Satoshi Nakamoto released the first digital coin dubbed Bitcoin, introducing a concept dubbed proof of work, which would be used to mine the coins. Over ten years later, the currency has supernormal value, but the mining process has proven to be a massive risk for the miners. The proof of work systems uses high electricity. Recently, there was introducing a new concept, proof of stake, aiming to solve problems clouding mining.
The proof of stake concept is an alternative for proof of work, mainly used in crypto coin mining. In proof of stake, the users participate in validating transactions, but they validate depending on the number of coins they stake in this case.
How Can You Earn Rewards?
Some rewards often depend on the staking period’s length and the stake’s value for every stake. Primarily, the higher the stake, the better the returns. Similarly, the longer the staking period, the better the staking returns. These rewards come in the form of newly released coins on the platform.
To increase the staking rewards, a user needs to select the best platforms and the best coins.
Proof of Stake Benefits
Ending 51% Attacks
51% attacks happening in the mining processes is where an individual or a group of persons garner control over 50% of the total mining power. As such, because of their superior control, the attackers often manipulate the blocks for personal gains.
For instance, on the Verge blockchain, attackers could steal 35 million XVG coins, an equivalent of $1.75 million due to the 51% attacks.
In POS, however, for anyone seeking to control 51%, they’d have to stake at least 51% of the coin in circulation. When trying to buy such significant amounts, the attackers will spend significantly higher than usual, and when the network notices, the attackers will lose ownership of their stake.
POWs consume significant amounts of electricity. For instance, Bitcoin’s electricity consumption was estimated to be equal to Switzerland’s electricity consumption.
The staking process is less complex, say in proof of stake, users do not need to solve complicated sums; thus, electricity costs are relatively lower.
POW networks allow people to form mining groups to increase their chances of completing computations and validating transactions. For instance, currently, China-based firms have control over 50% of the mining processes, making the systems highly centralized and unfair.
Using staking, everything is distributed based on the stake, and people cannot join hands. As such, the networks become decentralized by default.
Examples of Proof of Stake Platforms
The crypto world has some great staking platforms, including;
- Dokia Capital
- P2P validators
- Crypto exchanges like Binance, Coinbase, etc.,
Top 5 Best Staking Coins
Ethereum 2.0 is perhaps the highest rewarding proof of stake coin, and it was established as an improvement to the Ethereum 1.0 Proof of work coin. As a product of the Ethereum network, it enjoys high usage and adoption because it has the second-highest market cap in the crypto world.
The transition from Ethereum 1.0 to Ethereum 2.0 began in December 2020, a year when Ethereum has seen significant growth in the market. The Ethereum 2.0 upgrade’s central concept shifts from proof of work to the proof of stake concept, thus eliminating the expensive mining processes.
Due to this upgrade, Ethereum 2.0 promises a substantial performance boost, providing more transactions per second and achieving maximum scalability. This transition will take many years, but the ultimate result will be reliability, convenience, etc. There are many staking platforms supporting Ethereum 2.0, such as Mycointainer or Blox.io.
Tezos is the blockchain platform that hubs a digital currency dubbed Tezzie. Unlike other currencies that depend on mining to release new coins into circulation, Tezos depends on proof of stake algorithms that reward the validators in Tezos.
XTZ uses a middleware dubbed Network Shell, which ensures the processing of XTZ is in a secure digital ledger. It’s among the most secure digital coin networks owing to its technological improvements in the crypto space. All large staking platforms and exchanges support XTZ staking.
Among the platforms supporting Tezos staking include Binance, Mycointainer, etc. Binance, for instance, charges null fees for staking Tezos, but all you need to do is hold some amount of the Tezos coin in the Binance wallet. Tezos’ current annual return is 6%.
Dash is a crypto platform designed to create a network that provides fully decentralized payment options using the masternode concept. According to several crypto experts, Dash is the first crypto coin to introduce the proof of stake concept. The platform aims to speed the transaction throughput to about 1 second.
Using the various exchanges, you can easily earn by staking Dash. Among the exchanges include Binance, Mycointainer, and many more staking platforms. The fees charged for staking in these platforms is also favorable, and as such, users should try to maximize their earnings by using these platforms.
Dash allows users to run masternodes but with a minimum of 1000 coins. It’s easy to earn returns using the Dash network. Users can gain up to 7% annual returns for staking Dash.
Cosmos is another platform designed to create blockchain interconnection while ensuring all the blockchains maintain their integrity. It’s feature-rich, allowing people to create custom, secure, and highly scalable blockchains.
The cosmos platform also supports smart contracts. Currently, the average annual earnings for cosmos staking is about 8%.
Lisk is a network created to help people create Decentralized applications by building side chains. The platform is highly user friendly and accessible on many platforms, including Kucoin, OKEx, etc.
The current annual reward for risk is 1.61% for persons using vote delegates, and for persons running nodes, it’s over 5%.
Proof of stake is quite different from proof of work in that POS is cheaper, faster, and more secure. It’s cheap because of the low consumption of resources like power and more secure because it prevents investors from getting excess control of the mining process.
The write up has discussed some of the best staking coins in the crypto world, including Ethereum 2.0, the latest upgrade from the original version of Ethereum. Others like Tezos, Cosmos, Dash, and Lisk are all designed to be well rewarding assets. Staking is an excellent way of earning crypto rewards and, as such, is a good thing for investors to try out.