{"id":14357,"date":"2019-04-29T11:12:58","date_gmt":"2019-04-29T11:12:58","guid":{"rendered":"http:\/\/mediashower.com\/blog\/?p=14357"},"modified":"2020-12-28T17:47:51","modified_gmt":"2020-12-28T17:47:51","slug":"crypto-staking","status":"publish","type":"post","link":"https:\/\/www.mediashower.com\/blog\/crypto-staking\/","title":{"rendered":"Crypto Staking: How to Earn Dividends While You Sleep"},"content":{"rendered":"

There\u2019s a new way to make money with your crypto assets, and that is to do nothing at all.<\/p>\n

Everyone knows the magic of compounding interest<\/a>, where you\u2019re earning interest (say, for letting a bank use your money), then earning interest on that interest. As the interest accumulates, it gets automatically reinvested, and earns even more interest.<\/p>\n

The blockchain investor\u2019s equivalent is the idea of staking<\/strong>, where you\u2019re earning tokens for holding tokens. To understand how this works, let\u2019s briefly review how certain blockchains use Proof of Stake<\/strong>.<\/p>\n

\"Side

Courtesy <\/em>CoinTelegraph<\/a><\/em><\/p><\/div>\n

In a blockchain running on Proof of Work<\/strong> (like bitcoin), the system requires \u201cminers\u201d to maintain a huge network of computers performing heavy math to validate the blockchain. This consumes enormous amounts of energy and makes Earth sad.<\/p>\n

In a blockchain running on Proof of Stake <\/strong>(like Tezos), the system requires \u201cbakers\u201d to simply own the token. The more tokens they hold, the more \u201cvotes\u201d they have in validating the blockchain. No energy-intensive computer setup required.<\/p>\n

Why would someone want to own tokens in a Proof of Stake model? Because you can earn income\u2014like dividends\u2014on the amount that you \u201cstake.\u201d Think of it like putting your money to work\u2014and it is work, as the process of validating the blockchain is technically complex.<\/p>\n

For those who don\u2019t want to go through the hassle, there\u2019s an even simpler way: you can now delegate these assets to someone else, and earn between 5 and 25% annually<\/a>. Think of it like putting your money into a savings account: the bank puts that money to work, and you split the profits (i.e., interest).<\/p>\n

In plain English, here\u2019s how crypto staking works:<\/p>\n