You Can Stake Ethereum Now — Should You Do It?
Ethereum’s upgrade means staking is now possible.
You can stake on your own — but the barrier to entry is high.
Staking pools offer a much easier way to stake and earn passive income.
You can have your cake and eat it in the cryptocurrency world. What I mean by that is that you can buy cryptocurrency and hold onto it — but you don’t have to wait until you sell to lock in rewards. Instead, there’s a way to generate passive income. It’s called staking.
And as of just recently, you can stake your holdings of crypto giant Ethereum ( CRYPTO:ETH ). So, should you give it a try? Let’s take a closer look at exactly what happens — and if it’s a good option. Image source: Getty Images. A new development
Ethereum staking is a new development. The world’s second-biggest cryptocurrency originally used a proof of work consensus mechanism like market giant Bitcoin . This means, to validate transactions on the network, computers have to perform complex tasks. This uses an enormous amount of energy and time.
As part of Ethereum’s upgrade, it’s switching to a proof of stake consensus mechanism. This means validation power is given to computer nodes according to their Ethereum holdings. These validators put up their stake as a collateral of sorts. You can stake as an individual. But that’s complicated. First, you have to commit at least 32 Eth (that’s worth more than $98,000 according to today’s price ) to stake. Then, you should have some technical knowledge and have a computer running at all hours to potentially validate transactions.If that sounds intimidating, no need to worry. There’s another option. You can stake your holding through a staking pool. This means you allow a validator that pools holdings from various investors to […]
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