When using cryptocurrency for transactions, every transaction must be validated. This ensures that your transaction is being completed without any false data being transmitted. To do this, they are approved and added to a block by the miner of the cryptocurrency, or they are validated using an algorithm. The algorithm “stakes” your coins and if the process is successful – the transaction validated and verified – you receive a reward.
What Is Staking?
The simplest definition of “staking” is the process of participating invalidating a transaction by locking your cryptocurrency in a blockchain. This also supports the security and operation of the blockchain you have staked to. Besides that, staking is the popular means to get the crypto profit not jeopardizing your funds or security, i.e., compared to trading. Staking can be centralized or decentralized. When you stake your cryptocurrency using Atomic Wallet, you can choose your validator for your transaction; you have the ability to stake any amount you wish, you can unstake your assets whenever you want while still enjoying rewards, and you get 24/7 live support.
What Is Centralized Staking?
Centralized staking are blockchain providers that are already up and running and provide you with the ability to stake your cryptocurrency. You deposit or transfer your funds into the exchange, and the provider will handle everything else, giving you the ability to start staking your cryptocurrency right away. Keep in mind that using a centralized staking provider means you give them control of your funds. They hold your private keys, putting you at risk of losing your assets if the system is hacked.
Centralized staking is acceptable for:
- Beginner and intermediate stakers
- Anyone who wants to stake in a larger pool
- Users who have a low volume of cryptocurrency
- Users already using the centralized staking exchange who want to stake
What Is Decentralized Staking?
Decentralized staking – or dStaking – doesn’t use a third-party exchange for the staking of cryptocurrency. You hold onto the control of your private keys and asset ownership, ensuring your assets are secured. You hold the validator keys, and a key manager is assigned to maintain the setup and uptime is taken to stake.
Decentralized staking is acceptable for:
- Advanced stakers and validators
- Users who need a non-custodial staking solution
- Professionals, stakers and validators who are security-conscience
- Anyone who wants to maintain control over their private keys
- Anyone wanting to support decentralization
- Users who do not want to rely on a centralized service provider
- Users wanting to stake securely without infrastructure
- Large volume ETH investors and stakers.
Centralized VS Decentralized Staking
What Is Proof Of Stake (PoS)?
Proof of Stake (PoS) is a consensus algorithm used in crypto projects that allows the creation of new blocks and governance on a specific blockchain. It works by assigning validators to the blocks and rewarding them when the block is verified. The consensus algorithm is designed to verify the transaction, inform all of the nodes in the blockchain that it has been verified and add new blocks that are considered trustworthy.
Why Is PoS Important?
Unlike Proof of Work (PoW) that mines new blocks, PoS uses the mechanism of validation to assign rights to add blocks to participants based on their stake in the blockchain. The block’s validator is defined by how much cryptocurrency they have invested in the blockchain, not the allocated computational power amount.
Supported Proof Of Stake On Atomic Wallet
Built on the PoS algorithm, Tezos allows users to “bake” new blocks. This is similar to minting new blocks. Users can build a passive income using Tezos when they own a stake of a coin. Staking coins and baking coins with Tezos differs in the reward you receive for validating the transactions.
Typically, using PoS, you are rewarded for staking your coin for a certain period of time. The longer you leave your stake in place, and the larger the stake amount, the more passive income you can earn. With Tezos, you are rewarded for baking new blocks.
A group of independent blockchains, Cosmos was built on the idea that different blockchains should be united, not divided. This is the part of the IoB concept or Internet of Blockchains. ATOM is the reward token for Cosmos, and the whole system runs on “the hub” with each different group of blockchains called “zones.” The hub runs the PoS algorithm and keeps everything running.
Instead of mining ATOM, the tokens are earned using a hybrid algorithm. Users stake their tokens, and the person who stakes the most becomes the validator of that node and earns the rewards.
Another cryptocurrency with PoS algorithm, users can stake TRON using Atomic Wallet without fees while earning rewards directly from the validators. Please note that you cannot unstake your Tron tokens right away. They are frozen for three days. After the three days are up, you can leave them or unstake them.
BandChain (BAND) is an individual network that has been developed for fulfilling requests of cross-chain data oracles. These requests could be data sourcing and aggregations on the blockchain among other transactions. Staking BAND lets validators take part in the consensus and data provisioning process while earning rewards for providing the network with security and integrity.
When BAND is staked, block rewards are generated and distributed using an inflation rate of 7% to 20% depending on the ratio of all staked tokens. The more tokens staked, the higher the reward. All rewards must be collected before tokens can be used for further staking or transactions.
Vechain (VET) is a cryptocurrency that is best used for business activities. VET is the payment currency for the activity, while VTHO is used for the fees associated with the execution of smart contracts, transaction creation, and dividends for VET that is being held or for a node. If you are looking to make some passive income, Vechain is not for you as you need to stake a large amount to earn 1 VET.
Cryptocurrency Ontology (ONT) was created in 2017 by the Chinese company Onchain. It is being used by developers to create a network to unite the real-world economy and blockchain. It emphasizes digital identification and trust management. At the moment, the multi-level network is focused on large business transactions.
The hope for this young, promising cryptocurrency is that it will help promote the development of business projects using digital technology. It is expected to provide decentralized data warehouses for organizations, banks, and other firms.
Designed to provide a secure and scalable platform for businesses looking to build dApps, Zilliqa was launched in early 2019. It was the first public blockchain platform that used sharding as a successful scaling solution. It can scale linearly, meeting the needs of a growing system of applications and data miners.
The consensus mechanism used by Zilliqa has reduced its ecological footprint. It only needs a minute every two to three hours to mine ZIL, allowing the user to dual-mine other chains at the same time.
Launched in 2016 as a competitor to Ethereum, and rebranded in 2017, NEO is a digital, decentralized ledger network designed to work with smart contracts and dApps using the PoS consensus. It uses the NEO blockchain to make digital assets out of physical assets by creating smart contracts, developing a DApp and staking the NEO tokens to generate GAS as a passive income.
Cardano is a PoS platform blockchain that was based on scientific and peer-reviewed methods during its development. It offers first-in-class secure and sustainable solutions for DApp development and is becoming a positive force in creating accountability in existing systems. Users who stake using Cardano contribute to its healthy working status. It’s also scalable since it uses the PoS algorithm, bypassing the need for energy to grow.
Polkadot (DOT) is a blockchain protocol that connects specialized blockchains into a unified network. It is scalable thanks to the fact that it is a sharded blockchain able to process multiple transactions on multiple chains at the same time. It also uses parallel chains for the best efficiency. It is also self-governed and easily upgradable.
Why Atomic Wallet
As a non-custodial wallet, Atomic allows you not only store your cryptocurrency with a multifunctional and healthy exchange ecosystem but also offers its customers decentralized staking. When you use Atomic Wallet for staking and other cryptocurrency transactions, you retain full control of your private keys and backup phrases. You gain profit by supporting the network’s decentralization. And, all of your sensitive information is stored locally on your device, which is heavily encrypted, including the use of a 12-word backup phrase that is hard to crack by fraudsters.
Plus, your funds are stored on the blockchain and not in the wallet itself. When you want to access your funds, Atomic Wallet connects you to the blockchain nodes where you can find information on your balance, transactions, and everything else related to your cryptocurrency. You can perform all your blockchain transactions using the Atomic Wallet interface, including staking.
Atomic Wallet provides you with:
- Security and complete control over your cryptocurrency
- Anonymity because there are no accounts, no verification required, and no KYC to use the basic wallet features. This means no one can block your funds.
- 24/7 live support via live chat or email so that you can address any problems right away.
Stake To Earn Passive Income
Understanding the basics of staking and the different type available to you is key to making your cryptocurrency work for you. Using a platform such as Atomic Wallet gives you a wide range of options so that you can make the right choice for your cryptocurrency transactions.
Additionally, Atomic Wallet is adding more PoS options regularly. Currently, each staking option on the platform provides you with everything you need to know about it, including the current price, the return on investment (ROI), how long your cryptocurrency has been staked, and a comprehensive price chart.
To get started staking, take the time to look over each option on the Atomic Wallet site. Some have more information than others, and any questions can be answered by the helpful 24/7 support staff. If you are looking for a safe place to start staking, Atomic Wallet is ready to assist you.