In just a few steps, you can start earning 5%, 10% or maybe more of your cryptocurrency.
If you decide to invest in cryptocurrencies, staking is a great way to increase your returns. Many cryptocurrencies, especially the newer ones, validate transactions using a model called Proof of Stake. With this form, people who own the cryptocurrency can participate in it. This means that they have allowed the blockchain to use their cryptography to validate transactions.
In exchange for cryptocurrency, participants receive rewards for what they bet. You can look at it as earning interest on what you have in the savings account. The big difference is that while bank account interest rates tend to be very low, you can make profits of 10% or more by hoarding cryptocurrency.
Like almost everything related to cryptocurrency, staking can seem confusing at first. It is easier to do than you think, and you are free to decrypt the cryptocurrency if you want to trade it later. Once you know how to trade cryptocurrencies, you can start earning passive income from them.
1. Learn more about staking cryptocurrencies
To start hoarding, you need to own a Proof of Stake cryptocurrency. These are the only digital currencies you can share. Fortunately, the Proof of Stake model is becoming more and more popular because of how effective it is.
Choosing the right cryptocurrency is the most important part of the staking process. A common mistake here is to choose a cryptocurrency only because it offers massive rewards. It’s always tempting to buy when you see a cryptocurrency offering 100% or more annual bonuses, but many of these investments are poor that will drive prices down.
You should only buy cryptocurrency if you are confident that it is a good long-term investment. Look at the cherry on top and don’t make it your only reason to buy.
There are plenty of Proof of Stake cryptocurrencies that you can consider. Here are some of the biggest:
Ethereum (ETH) is also in the process of transitioning to a proof of stake model. It’s not 100% there yet, but it can be bet.
2. Buy the cryptocurrency you want
Now that you know what cryptocurrencies you can bet on, the next step is to choose one and buy it. This may sound simple, but it is important to keep in mind where you are going to make your purchase. The simplest option is to choose one of the cryptocurrency exchanges with built-in staking.
The reason to spend your time here is that not every cryptocurrency platform allows you to buy cryptocurrencies. Currently, most stock brokers and payment apps that sell cryptocurrency do not offer staking. They will also not allow you to transfer the cryptocurrency you buy from their platforms.
So, let’s say you buy cryptocurrency from one of those places. You will not be able to share it on the platform, transfer it to another wallet or exchange it where you can share it.
That is why you should stick to the exchanges that give you complete control over your cryptocurrency. Some of the best options include:
Each of these exchanges offers the possibility to acquire some of their cryptocurrency, so that you can buy what you buy with just a few clicks. You will also have the option to transfer your encryption if you want to share it somewhere else.
3. Accumulate your cryptocurrency through an exchange or an aggregator
This part of the staking process depends on the cryptocurrency you purchased and the exchange you purchased it from.
If you use an exchange that allows you to participate in that cryptocurrency, it will likely have a staking page or staking option in your wallet. See the exchange’s help section if you’re not sure how to do this.
Another option with many cryptocurrencies is to use a staking pool. These pools consist of crypto funds that investors pool together to earn more staking rewards. To bet with a combination, you usually need to transfer your crypto to a crypto wallet first. Then you can choose the staking pool and send the cryptocurrency there through your wallet.
Staking crypto is a fairly straightforward process, especially now that so many exchanges offer it. Once you know what to buy, it is a good idea to research how staking works with that specific cryptocurrency. This will help you choose the storage method that works best for you and provides the most rewards.
Buy and sell cryptocurrencies on an exchange chosen by experts
There are hundreds of platforms around the world waiting to give you access to thousands of cryptocurrencies. In order to find the right feature for you, you will need to decide which features are most important to you.
To help you get started, our independent experts have tested the options to bring you some of our best crypto exchanges for 2021. Check out the list here and start your crypto journey, today.