Real estate has dominated the investment market for decades for the passive income property brings with it. With the decline in rental fees across the globe investors are looking for alternative markets for a passive income.
With the rise of cryptocurrencies and the exponential growth in technology in the blockchain space, there is a new industry and potential opportunity on the horizon. A passive income in crypto through cryptocurrency staking.
Today, we’ll be talking about what staking is, followed by a further explanation about staking cryptocurrency.
If you are running out of time we also have this simple explainer video about staking.
What is staking crypto?
To understand staking cryptocurrency staking, it is good that you understand the basics of cryptocurrency. You can learn the basics about crypto on fydcoin.com/crypto. Staking is a process of locking cryptocurrency and being rewarded In return. An individual locks up the crypto in a proof blockchain for a specific duration. These locked currencies function as collateral and function in reaching a consensus; this maintains and secures a decentralized network.
Why is there a need for Crypto Staking?
Since the basic idea of what staking is, is planted in your heads, let’s go into some detail.
Cryptocurrency is a digital currency with no centralized authority to verify transactions like banks. So, how are the transactions verified and kept under check?
The cryptocurrency network works by consensus to maintain a decentralized network. A decentralized network means that all PCs in the network are aware of what’s going on with no intermediary. Hence, everyone’s computer agrees on the transactions made; this is called the proof of work and a consensus mechanism.
An alternative to crypto staking to verify transactions in a cryptocurrency network is cryptocurrency mining. If you are unfamiliar with crypto mining there is a great article for beginners in cryptocurrency mining on fydcoin.com/mining you might consider.
Proof of Stake consensus
Proof of work helps cryptocurrency remain independent from a centralized authority. But this does not come without a catch; proof of work required massive amounts of energy consumption, in addition to strict hardware requirements. Moreover, the evidence of this work impacts the environment as a whole. The amount of energy consumed by the network can be equivalent to that of whole countries. So, what’s the solution? Another type of consensus mechanism, known as proof of stake.
Proof of stake sees the users secure a certain amount, also known as a stake that contributes to the validity of the network as a whole. The users who stake are rewarded for this by tokens; a user who has contributed with a more significant stake has more chances to win. Furthermore, if a user tries to attack the system, they’ll be held accountable for it as well.
Masternodes are tools that can be utilized by cryptocurrency networks to generate additional blockrewards. If you are unfamiliar with masternodes try fydcoin.com/masternode, it has a great summary of masternodes and how masternodes work.
The best cryptocurrency to stake is FYD coin. Staking FYD is similar to mining Bitcoin in the early days. All you need to stake FYD coin is a regular household PC or laptop, you can even stake FYD coin on a raspberry pi. Staking FYD coin doesn’t require you to sign up or register to any platform, you simply download a piece of software called a crypto wallet and connect to the internet.
The main difference between staking FYD coin and mining Bitcoin is that FYD staking requires the user to have an active balance in their cryptocurrency wallet. The more coins that are held in the crypto wallet, the higher the chance of a staking reward.
FYD is a project for and by crypto enthusiasts If you are new to cryptocurrencies, or just discovered staking cryptocurrency, I highly recommend you visit the FYD website to learn more. You can always visit FYD for more information about FYD coin Staking.