What Is Staking?

What Is Staking

The main way of passive investment in the cryptocurrency market and the main alternative to mining is the staking of cryptocurrencies. What is staking crypto and how to make money on staking on Emirex? Staking is the process of holding funds in a cryptocurrency wallet to support all operations on the blockchain. Essentially, it consists of locking a certain amount of cryptocurrency in a wallet to receive rewards. In most cases, this process depends on the users participating in the transactions on the blockchain using a personal cryptocurrency wallet.

How does staking work?

The concept of Proof of Stake (PoS) involves this type of mining, where instead of the computing power of the participants, you just need to store crypto assets in your account. However, PoS participants have a limited percentage of possible transaction verifications. The principle of operation of another basic crypto world algorithm  Proof of Work (PoW) is completely different: users use the power of their computer and receive coins as a reward. This is how PoW transactions are confirmed.

The profitability of staking on Emirex is a good option, as often, the freezing period does not exceed a few days. But do not forget that storing cryptocurrencies on the exchange carries certain risks since exchanges are sometimes hacked.

Staking on a hardware wallet is often referred to as cold staking. Networks that support cold staking allow participants to have the necessary share of coins and take part in block validation, safely saving their funds. However, if the stakeholder withdraws coins from the cold wallet, they stop receiving rewards. This method is well suited for large holders as it provides maximum protection of funds while maintaining the network. Another interesting option for passive income is staking stablecoins. This option is ideal for those who are used to keeping most of their capital not in cryptocurrency but in fiat.

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