What is strike? And how and where can you stake crypto?
Staking: an interesting way to earn extra returns
Strike is a term we see more and more in the crypto community. Today, many exchanges offer the option to strike making it accessible to everyone. Strike is rewarded in and with crypto.
So you can gain extra return with staking. But it is still a relatively unknown concept. That’s why in this article we’ll explain what staking is, how it works, what the pros and cons are and how you can stake via exchanges (such as Bitvavo).
What is strike?
Staking is nothing but holding crypto coins for an indefinite period of time in your cryptocurrency wallet. With this you support the security and operations of a particular blockchain network.
You can compare the discontinuation of cryptocurrencies with receiving interest on a regular savings account. When staking crypto, you buy a certain amount of a coin or token that you then hold (strike). As a reward for holding, you will receive interest on your coins.
The interest differs per coin, but is usually paid in the form of crypto. Not all cryptocurrencies can be discontinued. This is only possible with so-called Proof of Stake coins.
Buy Bitcoin? Open an account with Crypto and pay no transaction costs on euros ore cryptocurrencies traded
What is Proof of Stake (PoS)?
Proof of Stake (often abbreviated to PoS) is a consensus algorithm that aims to validate transactions and add new blocks to a blockchain. These blocks are created by participants of the network who stake their coins. In other words, hold it for an indefinite period of time. This validates a new block on the platform.
As a so-called validator you can help with the validation of blocks. To become a validator, you must first deposit an amount in the form of crypto coins. By using a deposit, there is more certainty that a validator is doing his or her job well. If the working agreements are not met, the validator will lose the deposit.
We call this deposit amount the stake and the process is called staking. By holding the crypto coins, you will receive a reward. This often takes place in the form of crypto.
The protocol will assign a participant to verify a block at regular intervals. The participants who create a new block are not selected based on their computing power (as with PoW) but based on the number of coins they bet as a stake.
In general, participants with a higher stake are more likely to be selected as validators. The more cryptocurrency you hold, the greater the power to validate transactions. Also applies: the longer you keep the coins in your wallet, the higher the number of coins to receive for staking.
The pros and cons of strike
Strike has several advantages:
You don’t need technical knowledge or expensive equipment to strike.
You don’t have to do almost anything for strike. Purchase the crypto and simply keep it in your wallet. This leads to value growth and can therefore be a passive source of income through your own crypto wallet.
Do you hold a particular coin for the long term (HODL)? Then you can make extra profit with staking.
With staking you contribute to the functioning of your favorite crypto currency.
As with anything, staking not only has its advantages, but also some disadvantages. That is why it is so transparent to also mention the disadvantages of strikes.
You have to hold the coin for a certain amount of time. During this period, you cannot sell the coin until the time has elapsed.
To really turn it into a lucrative passive income source, quite a bit of invested crypto is needed. But the return is in any case better than on your savings account.
By holding the coins for longer, you cannot immediately respond to price developments. Staking is therefore not suitable for day traders.
Some crypto coins can only be staked via an exchange (for example Crypto) and not via your own wallet. The disadvantage of this is that you do not have it 100% under your own management.
In certain cases, there are also additional conditions, such as a minimum threshold and a minimum strike period.
How much can you earn with a strike?
Strike reward percentages vary by coin and exchange. Each coin and exchange has its own rules and rates. Today there are calculators available for almost all stakingcoins. This allows you to calculate how much cryptocurrency you will get in return.
Crypto example, if you are going to strike at Crypto, the return will be calculated for you daily. In addition, the proceeds are always paid on Monday. It is also good to know that the annual returns differ per coin. On an annual basis, the return varies from 0.79% to a maximum of 10% and sometimes more.
You can easily set up the strike via the Crypto strike dashboard. On the screen you will see a dashboard with an overview of your staking activities and profits. This way you know exactly how much you have already earned.
Strike through exchanges
You can strike at various exchanges. Think, for example, of Crypto, Coinbase and Blockchain. It is also possible to stake coins at crypto.com. This is a well-arranged trading platform with a wide range of coins. You can stake different coins via Crypto and new coins are added regularly.
At the time of writing, you can stake the following sixteen coins at Crypto:
Bitcoin Cash (BCH)
USD Coin (USDC)
Staking is a nice and easy way to get extra returns. Especially if you invest for the long term and the coins otherwise sit still. It becomes completely lucrative if the price of the crypto you have chosen also rises considerably. Then you not only earn by staking, but your property also becomes worth more.
The risks of staking an exchange are minimal and the benefits seem very rewarding. Of course you can always choose to stake via your own wallet, but this takes a little more effort. Striking is an excellent choice for HODLers in particular to generate extra returns. Moreover, it is very easy to do.
In short, by discontinuing a cryptocurrency, you help build, expand and verify a blockchain in a direct way and you also achieve extra returns.
Bitcoin Price Drops To 7 Month Low Of $35k As It Hits March 2020 Oversold Status
Bitcoin had a blood red day as the price dropped to new lows below $35k. The largest cryptocurrency by market cap has now lost about 50% of its value…
Bitcoin Drops To $38k As BTC Mining Hits New Record
The Bitcoin price is currently hovering around $32k at the time of writing (-18%). The largest cryptocurrency by market capitalization previously suffered a major drop in price that…
Bitcoin price rises slightly again to $43k and Google Pay moves towards crypto payments
The Bitcoin price is currently hovering around $30k at the time of writing, after rising slightly earlier in the day. The Largest Cryptocurrency By Market Cap Is Trying To…