Answers to All Your Questions on Staking

Questions on Staking

Staking is the new go-to method for making passive income. Unlike other methods of generating income, such as selling stocks or forex trading, which requires complex analysis and following the market trends, staking is passive. You just commit your coins and then relax, waiting for passive income to flow into your crypto wallet.  Most people who hear about staking for the first time have a lot of Questions on Staking about it. How does it work? Is it real? What is the relation to blockchain technology? Well, you do not have to get disturbed by these questions anymore because we are here to get you all the answers. 

What is Staking? – Questions on Staking

Staking is the process of locking your crypto coins to the blockchain network for a reward. In decentralized systems, nodes/computers are used to help with validating transactions. The nodes replace the bank managers, cashiers, and centralized system and they help with processing all transactions. 

In a proof of stake (POS) blockchain, the nodes that are allowed to help with validating transactions are only those that have some stakes in the respective network. Therefore, locking your coins means that you are empowering your computer or the staking pool to be able to validate transactions. 

Here, we must emphasize that staking must involve locking your coins to the selected network. Therefore, buying crypto coins is not enough when targeting staking: you have to commit them for a specific period. During this staking period, the coins will be unavailable to send or other uses such as paying for merchandise on the market. 

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What is Blockchain Technology?- Questions on Staking

The process of staking coins only happens in blockchain networks. So, what exactly is blockchain technology? This is a relatively new method of recording information in such a way that it is impossible to change. A blockchain is a distributed ledger that is duplicated and stored in computers in its networks. When a transaction is initiated in a specific computer, the details are checked with other nodes that have a copy of the database using consensus protocol

To run transactions in a blockchain, people pay transaction charges using native currencies or crypto coins. For example, you can only pay the transaction fee on Bitcoin using BTC. Part of this fee is what is used to incentivize the nodes that help with consensus. This is where staking comes in. When staking, the more coins you have, the higher chances of getting selected to validate transactions. 

What is the Simplest Staking Method?


There are two main methods that you can use to stake your POS coins. You can opt to do it on your own or work with a decentralized finance (DeFi) platform. Well, staking the coins alone means that you have to transform your computer into a node, which can be pretty complex. First, you have to download the blockchain network client, install it on your computer, and then lock your POS coins. Then, your computer has to be on and online for the entire staking period. It is always challenging for most people to keep their computers on over a long period because of logistics, such as network interruptions. 

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The simple and most straightforward way of staking your coins is by using a decentralized finance (DeFi) platform. The lovely thing about these platforms is that they are run by experts with a lot of experience in blockchain technology. Therefore, all that you need to do is buy POS coins and send them to the staking pool. One of the best platforms today is Mantra Dao. Visit them on their website to learn more about staking and enjoy every moment. 

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