The Bitcoin bull market phase generated huge media hype not just around Bitcoin but in the crypto market as well. Since the crypto market is decentralized, it was quite impacted by the bull run of Bitcoin because Bitcoin is known as one of the largest cryptocurrencies on the market. So, most of the cryptocurrencies also experienced a bull cycle as well, and this further changed the perception of Bitcoin and other cryptocurrencies as viable methods for online payments. As a result, today the crypto market is filled with possibilities for new investors as well as more experienced investors. It is constantly expanding and growing and creating list-taking is one of the latest innovations which is appealing to new crypto users on the market if you’re also looking to expand your portfolio in this article, we will explain in more detail what crypto stacking is and how users can benefit from it.
What Is Crypto Staking?
Crypto Stacking is a unique process where you’re holding crypto assets in order to obtain a certain reward and earn interest. In other words, it would be a process that allows you to earn rewards when you’re holding specific cryptocurrencies. It’s also worth mentioning that crypto stacking is the process of verifying crypto transactions, but this consensus mechanism it’s not called proof of work but proof of stake.
When it comes to cryptocurrencies in general, they are decentralized and not governed by any authority. That is why verifying the crypto transactions is a crucial aspect of the crypto world and it is really important for each crypto transaction to be unique.
Proof of Stake vs Proof of Work
Proof of work was the initial consensus mechanism introduced with the blockchain network of Bitcoin it encompasses a time-consuming as well as energy-consuming process called crypto mining where the miners that work on numerous computer systems around the world are required to solve a complicated mathematical puzzle in order to receive a block reward and approved the blocks of transactions in the network. However, there are some downsides of this process because it is costly it requires a lot of time and effort.
This is why there are a lot of people that are registering on online trading sites, they not only want to quickly invest in cryptocurrencies but they don’t want to spend their time and effort in a competitive crypto mining process. Crypto trading allows users to trade on their own time on automated trading platforms which are using highly accurate artificial intelligence-powered algorithms in order to create a safe trading environment.
On the other hand, crypto stacking was created as a way to enhance the speed of processing the crypto transactions and minimize the transaction fees while also keeping the costs of the verification process to a minimum. Actually, the transactions aren’t verified by crypto miners but they are verified by the users on the network that are involved in crypto staking.
Support of the Business
The changes in the blockchain network and the popularity of crypto have an overreaching impact and attract businesses as well that want to accept crypto payments. Some famous brands are Burger King, OkCupid, PayPal, Square, and many more. The number keeps growing and we can see that there is mainstream adoption of crypto boosted by the popularity of blockchain and the crypto market’s bull cycle.
Another example is online casinos. Casino sites have also decided to accept crypto payments, and they represent one of the main gaming platforms where you can actually use your crypto funds to wager on different casino games, which means you can also play blackjack with crypto.
So, you will essentially have the same casino experience, but instead of using your fiat currencies, you can use your crypto funds. Online casinos never shy away from accepting technological innovations for their own benefit, and since crypto payments are associated with lower transaction fees and short processing times, integrating cryptocurrencies into online casinos is actually a good decision for both parties.
It’s worth noting that brick-and-mortar stores also accept crypto payments because it isn’t that difficult to set up a digital wallet to accept cryptocurrencies. Also, cryptocurrencies are associated with minimal transaction fees, instant or short processing times, and enhanced security. The benefits are obvious for both sides.
The target audience of crypto users and businesses. Plus, it offers another opportunity for businesses to connect with another audience of crypto users and motivate them to use cryptocurrencies in their daily life.
Rewards of Staking
Although there are differences from one blockchain network to another basically the validators are chosen based on the size of the stack they have on the blockchain system along with time period of their involvement in cryptos staking. In case there is an unverified or transaction in a block then the user will have their stack burned by the other users in the network and this is known as the slashing event.
The advantage of stacking is that is open to any user that wants to participate in this process however it is associated with specific virtual currencies like Ethereum, Tezos, and other digital currencies.
Some of the rewards include transaction fees as well as the percentage of certain tokens added to your portfolio. In order to learn more about the crypto stacking of specific currencies make sure to familiarise yourself with the blockchain network of that cryptocurrency and read their white paper. It is very important to have good research beforehand.
The Bottom Line
In conclusion, crypto stacking is beneficial for individuals because not only they’re contributing to the greater security of the network but they are also earning rewards without putting a lot of effort or time into the process. Still, it is really important to do your research and choose cryptocurrencies that align with your financial goals as well as your long-term budget.
That said, keep in mind that this does not exclude the volatility of the crypto market. It is still volatile and impacted by many different external and internal factors, but it provides numerous opportunities that aren’t available in regular traditional markets. We expect, in the future, cryptocurrencies to be widely used in our day—to—day lives.