Everybody seems to be talking about cryptocurrency staking nowadays. As it continues to grow in popularity, exchanges all over the world seem to be lining up to offer their customers staking services – with no shortage of takers among their clientele.
Indeed, Mirko Schmiedl, CEO of StakingRewards.com says that a staking revolution is in the cards, telling Cryptonews,
“The staking market will explode. More financial products featuring integrated staking will be created.”
But Schmiedl admits that staking is easily “misunderstood.”
So if you are one of the many people out there who have never really quite got to grips with staking – or have trouble understanding what it is, here is a basic guide to explain how it works plus a few pointers that will help you get started if you decide to begin staking.
What is staking?
Staking refers to “locking up” a network’s digital asset in order to improve the efficacy of a blockchain network. This locking away of funds is what gives the action its name, as participants must first put up a “stake.”
In exchange for staking funds and helping to secure the network, participants are often allowed to receive a share of the block rewards.
Blockchain network operators typically use staking in one of two ways.
