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Author: Admin | 2025-04-27
Edited By Tobias Robinson Fact Checked By William Berg Crypto staking is a method used to validate proof-of-stake blockchain transactions in return for rewards. Unlike mining, it involves locking coins in a crypto wallet, using less computational resource and yielding more predictable percentage returns.If you’re still wondering what crypto staking is, look no further. In this tutorial, we cover the definition of crypto staking, plus a step-by-step guide of how to stake and manage your crypto coins. Best Crypto Staking Brokers Click a broker for details 1 2 3 4 Crypto Staking ExplainedCrypto staking is a system used to validate proof-of-stake (PoS) blockchain transactions, as opposed to proof-of-work (PoW) transactions which are done through mining. The difference between PoS and PoW is key to understanding the basics of how crypto staking works.Proof-Of-Work Vs Proof-Of-StakePoW blockchains such as Bitcoin and Bitcoin Gold require each block to be independently verified. This is carried out by miners, who use computational power to solve complex algorithms in return for blockchain rewards. While all miners aim to discover the solution to the algorithm, only the first miner to solve it will receive the prize.PoS was developed in response to the high computational resource and element of luck associated with PoW. With PoS, the likelihood of a staker creating the next block is dependent on how much they have staked – or how many coins they have stored for the blockchain they are verifying. Coins are locked up in a crypto wallet when staking, meaning they can’t trade them in the usual way during this period. However, stakers can grow their wallet value over time, by receiving a percentage return for their staking efforts. BitGreen is an example of a proof-of-work blockchain, specifically launched as an energy-efficient alternative to Bitcoin.Crypto Staking RewardsFor some people, crypto staking acts as a form of passive income and is similar to earning interest when holding money in a bank account. Several websites provide data that allow stakers to compare the highest staking rates. Online staking calculators can also be used to predict compound interest using the staking period and reward rates – also known as annual percentage yield (APY).Crypto Staking Vs Liquidity MiningCrypto staking differs from liquidity mining (also known as yield farming), which is the concept of providing liquidity to decentralised exchanges by depositing coins. This allows the coins to be used, exchanged or lent by other people in
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