Staking is the process of participating in transaction validation on a proof of stake blockchain. Cryptocurrency investors can opt into staking, allowing them to earn more with their digital assets.
There are many popular staking coins but three of them are surely sparking the most interest among crypto users so we covered the staking process for all three of them:
Why stake with Ledger?
A hardware wallet is simply a way to store your cryptocurrency offline, safeguarding it from hackers. The advantage of staking with Ledger is that you maintain complete control of your assets whilst staking, meaning there is no need to deposit them to an exchange or online wallet to earn.
Ledger also supports staking for up to 7 different cryptocurrencies simultaneously, making it possible for anyone with a diverse portfolio to earn rewards on multiple assets with the same wallet.
Staking on Ledger – How to stake coins with Ledger Live
Ledger Live is a user interface app made for use with Ledger wallets. Ledger Live allows you to create a personal account that will enable you to view and manage your assets.
Staking cryptocurrency with Ledger Live is an easy process; you can start staking cryptocurrency in a few steps:
- Install the Ledger Live app
- Create an account on Ledger Live
- Inside the app, find the app for the specific coin you wish to stake
- Transfer funds to your device using Ledger Live
- Start staking and earn rewards on your assets
How to stake coins with Ledger + external wallets
- Install the crypto app on your Ledger device
- Choose the third party wallet you wish to use
- Add funds to your device using the selected wallet
- Start staking and earn rewards
Different Ways to Generate Revenue by Staking
Staking coins for a set period allows you to get rewards according to the amount of cryptocurrency used for staking.
Staking rewards vary for each asset, and you will typically receive rewards monthly.
Delegating or Nominating
Another option is to delegate or nominate part of their stake to a validator responsible for securing the network. Rewards will come from the validator as they share part of the revenue they earn with anyone who is nominating/delegating their stake to them.
In most cases, the protocol can automatically pay these kinds of rewards. With some assets, the validator is responsible for sharing the rewards.
Running validators involves running a node to help secure the network.
Validators receive rewards corresponding to how much cryptocurrency they stake.
Validators can also build a pool of cryptocurrency, allowing other investors to contribute assets to the validator. The validator will then share the rewards with anyone who adds cryptocurrency to the pool.
Difference between PoW and PoS
Proof of Work
Bitcoin is an example of a blockchain that uses the proof of work system. Transactions on the network take around 10 minutes before they are validated. During this 10-minute interval, a new “block” is made and added to what is known as the blockchain.
Every block in the network contains different transactions, which must be validated. The Bitcoin network achieves this with the help of miners, who use their computational power to solve a complex algorithm; this process is called proof of work.
Miners compete to solve these algorithms; whichever miner completes the task first will receive the reward.
Proof of Stake
Proof of stake is another type of mechanism used by blockchain networks to achieve distributed consensus.
Proof of Stake requires users to stake cryptocurrency to become a validator in the network. Validators are the equivalent of a miner in the proof of work mechanism.
Proof-of-stake makes some improvements to the proof of work system
- More energy efficient – Less energy is required as there is no need to mine new blocks.
- More accessible – Proof of stake makes it easier for cryptocurrency enthusiasts to earn rewards from their assets
- More immune to centralization – Proof of stake leads to more nodes in the network
With the proof of stake model, validators are more likely to earn rewards related to how much cryptocurrency they stake.
Staking more assets means more rewards.
Cryptos to Stake with Ledger
Ledger currently natively supports staking for the following cryptocurrencies:
Ledger supports the staking of other tokens through the integration of third-party applications with the Ledger Live staking app.
Conclusion on Ledger staking
Staking allows cryptocurrency investors to make more with their digital assets. Stakers earn rewards based on how much cryptocurrency they contribute towards the proof of stake model. The Ledger wallet provides an excellent introduction into the world of staking, allowing users to earn rewards on several cryptocurrencies whilst also providing a high level of security for their assets.
Btw. you can stake crypto on other platforms: exchanges and wallets alike. Here is a guide on that topic. And here is also a quick article on how good is Binance staking and should you use it as a staking platform.
Frequenetly Asked Questions
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