Cryptocurrencies were born from the vision of idealists. The increase in value and crazy fluctuations in the exchange rate attracted speculators and investors who are counting on high profits. For some time now, there has been another way to earn money: staking, which has already been colloquially renamed as “stakowanie.”
Staking, or locking a certain amount of currency, is a solution that allows for the verification of the correctness of blocks. Unlike mining cryptocurrencies, it does not require high investments in expensive equipment and energy consumption.
Looking at staking from an investor’s perspective, staking can be most simply explained as a type of deposit. The only difference is that the profit will not be calculated in traditional currency, but in the cryptocurrency that we are staking. It can be said that staking is an alternative to mining cryptocurrencies. It involves transferring tokens to a special digital wallet that supports transaction confirmation.
Initially, staking required a specific input and considerable knowledge. Nowadays, it is also possible to stake through cryptocurrency exchanges. While it is possible to compare staking – or blocking – cryptocurrency to locking traditional currency in a bank deposit, it is impossible to compare the profits. Unfortunately, governments are printing money at a rapid pace. Therefore, if a bank accepts deposits at all, it offers fractions of a percent of annual profit. In contrast, cryptocurrencies can earn anywhere from a fraction to several dozen percent. (The actual final profit will depend on the exchange rate).
Popular cryptocurrency exchanges (including Binance, Kraken, Coinbase, and others – www.stakingrewards.com/exchanges) enable staking of various currencies and under different conditions – just like traditional banks offer deposits. So, you can make a deposit… that is, fixed-term or flexible staking, which can be interrupted at any time. It is possible to stake cryptocurrencies, but also stablecoins (USDT), and in some places even traditional currencies.
It is also possible to stake cryptocurrencies directly from some digital wallets or through other service providers. Each solution has its pros and cons – the choice will depend on the investor’s knowledge and the level of trust that the currency owner has in specific solutions.