OPINION | Jul 26, 2021 | WOZINGA NEWS
Staking vs. Mining: Unleashing the advantages of staking
“Staking cryptocurrency is in Proof-of-Stake (PoS) protocol by validating the transaction formed via blockchain.”
By Elah Mae Ariate [w/ Marielle Petere] Wozinga Journalists
Staking vs. Mining
Staking is similar to a fixed deposit in that it rewards you with a fixed interest rate at the end of the period specified in the contract. Proof-of-Stake also rewards you with additional coins.
You are rewarded for supporting the network by storing coins in your wallet. As a result, the number of coins in your wallet will grow in proportion to how long you keep them in the wallet.
While mining necessitates, both technical knowledge and computational power solve the algorithmic puzzles involved in blockchain networks. To make mining easier and more effective, there is the option of mining alone or joining a pool.
Proof-of-Stake — benefit #1
Typically, staking digital currency is in Proof-of-Stake (PoS) protocol by validating the transaction formed via blockchain. It is more energy-efficient compared to mining.
The PoS protocol may not eliminate the energy consumption yet it reduces. Remember that an individual can validate block transactions, according to Investopedia.
Advantages of staking
Staking does not necessitate the purchase of a machine, such as ASICS or high-end GPUs used in mining. Instead of purchasing mining hardware, you buy coins and lock them.
This will result in greater balance and value growth. The number of coins increases as the rewards increase, and as prices rise, so does the value of your wallet.
In addition, it consumes fewer resources than mining or Proof-of-Work (PoW). This results in less electricity consumption and the elimination of the need for additional machines to participate in this process.
Because the holder of the coins is incentivized to keep them rather than selling them, the price of coins will remain stable. Participation in staking does not necessitate technical knowledge.