In this article, I will be explaining the concept of staking in the crypto world as well as share the process of staking ALGO on the Atomic Wallet. Let's get started.
What is Proof of Stake(PoS)?
One of the biggest questions, when it comes to a blockchain is this: "How are new blocks created and how are the new blocks added to the blockchain?". The answer to the question lies in the consensus protocol/algorithm used by the underlying blockchain network.
Most of us are familiar with the cryptocurrency bitcoin which used Proof of Work(PoW) as the consensus algorithm, where users need to perform some computational work to validate and add the next block. But PoW is computationally expensive and not scalable in the long term. Therefore, many of the networks have started using different forms of another interesting consensus algorithm: proof of stake.
Proof of Stake(PoS) is a consensus protocol which is used in several blockchain networks to create new blocks that will be added to the blockchain. The main idea behind this protocol is that users/participants of the network can lock their stake(the cryptocurrency that they hold) for a period of time, thereby gaining the opportunity to be chosen to validate the next block.
In the case of PoS, participants with a higher stake in the network have a higher probability to get selected as the block validators. This translates to: the more coins of a particular blockchain network you hold, the more chances you have of becoming a block validator in that network. This leads us to ask the question - how do we hold these coins and participate in the network?
What is Staking?
Staking is the process of holding the coins of a particular blockchain(you can hold more than one) in order to gain rewards for doing so. The rewards are an incentive to hold the coins for a period of time. Wallets like the Atomic Wallet acts as a great medium to stake the cryptos in order to gain rewards. Atomic Wallet provides options to take several coins like Atom(Cosmos), XTZ(Tezos), Tron(TRX), ONT(Ontology), ALGO(Algorand), KMD(Komodo) etc. Here is the complete list of available staking options on the Atomic Wallet.
In this article, we will be looking at ALGO and how can we stake it using the Atomic Wallet.
What is ALGO and how can we stake ALGO on the Atomic Wallet?
ALGO is the cryptocurrency of a blockchain known as Algorand. Algorand is an open source, permission-less blockchain that uses Pure Proof of Stake protocol and is aimed to create a truly borderless economy by using the basic blockchain principles of immutability and decentralisation for a better world.
In the pure proof of stake algorithm, a participant has the probably of getting selected as the next block validator if the participant has staked their ALGOs using a wallet like the Atomic Wallet. Once the staking process begins, the underlying algorand algorithm selects a block validator according to their core protocol mentioned here. If you are able to create an account on the wallet and stake ALGOs using the wallet, you can be the next block validator and claim your rewards!
So, how do we stake ALGOs on the Atomic Wallet?
Here are a few simple steps to stake ALGOs on the wallet(for the desktop app):
- Download the atomic wallet from here. You can download it on your desktop or on your mobile phone.
- Create an account on the wallet( you ned to create a new wallet and save your 12-word mnemonic).
- Purchase some ALGOs to store in your wallet/ Transfer ALGOs from your existing wallet.
- On the left side of the wallet, you will be able to notice the Staking option. Click on the staking option and choose ALGO as the cryptocurrency.
Viola! You are all ready to stake ALGOs on the Atomic Wallet.
You can check your staking rewards by copy-pasting the ALGO address to the Algorand Explorer.
Here is a detailed link of the steps for staking ALGO using the Atomic Wallet on both Desktop and Mobile interfaces:
https://support.atomicwallet.io/article/133-how-to-stake-algo
So, get staking and start scooping your rewards!
