{"id":2245,"date":"2021-11-03T17:44:33","date_gmt":"2021-11-03T14:44:33","guid":{"rendered":"https:\/\/evercodelab.com\/blog\/?p=2245"},"modified":"2025-09-11T13:17:53","modified_gmt":"2025-09-11T10:17:53","slug":"what-does-staking-in-crypto-mean-implications-for-evercodes-customers","status":"publish","type":"post","link":"https:\/\/evercodelab.com\/blog\/what-does-staking-in-crypto-mean-implications-for-evercodes-customers\/","title":{"rendered":"What Does Staking in Crypto Mean: Implications for Evercode\u2019s Customers"},"content":{"rendered":"

As long as you are aware of the fact that crypto currencies exist, you are likely to know what staking means. However, let’s start with the basics. In plain terms, staking is the way for many crypto currencies to verify transactions on their blockchains and to reward the crypto owners who are ready to use their assets for this purpose.\u00a0<\/span><\/p>\n

But what does it mean in tech and business terms, essentially? Should you be interested in this mechanism if you are planning to launch your own blockchain project? That is what we are going to discuss in this piece.<\/span><\/p>\n

A Simple Definition of Staking<\/strong><\/h2>\n

According to <\/span>Coinbase<\/span><\/a>, crypto skating means \u2018earning rewards for holding certain cryptocurrencies.\u2019 Thus, it is one more way to get crypto, along with buying it or mining it. As many people like passive income, this opportunity is extremely lucrative for them. In fact, you can even compare crypto staking with bank accounts, however, it works differently..<\/span><\/p>\n

Any crypto asset is based on its blockchain. In a nutshell, blockchain means that any transaction made is being continuously verified by newer ones. All the data related to those transactions is dispersed and securely stored across the entire blockchain. Such universally accessible and verifiable records are denoted as \u2018Proof of stake\u2019 in our context.\u00a0\u00a0<\/span><\/p>\n

That fact is the key to comprehension: each fresh block in its chain requires either new coins mined to support a transaction, or already existing coins to enable it. As an outcome, crypto investors can entrust their digital assets, for a limited period of time, to a crypto protocol. The latter, in turn, chooses some of those investors to validate new transaction blocks. Hence, the fewer coins you pledge, the smaller your chances are to be chosen to confirm a transaction block.<\/span><\/p>\n

Crypto Staking As a Bank Account: ROI issue<\/b><\/h2>\n

It is of importance that the option of staking is available not with every coin. What you should pay attention to is whether your future digital asset uses the \u201cProof of stake\u201d method or not. Earlier coins, such as BTC, apply another model, \u201cProof of work\u201d.<\/span><\/p>\n

The key difference here is the pattern of energy usage. While \u201c<\/span>Proof of Work<\/span><\/a>\u201d makes it mandatory for miners to generate new blocks via \u201csolving complex mathematical problems\u201d in competition with each other, \u201cProof of stake\u201d is less demanding. Therefore, altcoins based on the \u201cProof of stake\u201d consume less energy and can process more transactions within shorter periods of time.\u00a0 \u00a0<\/span><\/p>\n

Right now, such altcoins <\/span>include<\/span><\/a> Solana, Cardano, ETH 2.0, Polkadot, and Terra.<\/span><\/p>\n

How attractive is this method to generate passive income? While it is not so often praised by industry headlines, it is extremely attractive. For example, <\/span>NASDAQ\u2019s<\/span><\/a> recent article called it \u201cthe Quiet Giant of Crypto Yield.\u201d<\/span><\/p>\n

As for the <\/span>estimated rewards<\/span><\/a> one can earn per year, they vary. But they all seem extremely palatable:\u00a0<\/span><\/p>\n