What is Crypto Staking?

A Simple Guide to Crypto Staking

When investors contemplate investing in cryptocurrencies, they think about
either mining crypto or purchasing it outright on a crypto exchange. But crypto
staking – or staking coins as it is often called – is another viable alternative for the
crypto-curious to get assets into their crypto wallets.

While staking may be a new addition to the financial lexicon, it’s important for
those interested in crypto investing to understand what it is, how it works, and
what cryptocurrencies it can be used to obtain.
Crypto staking may feel like it’s a step beyond simply learning how to buy
cryptocurrency or how the crypto exchanges work. Learning about
cryptocurrency staking can broaden your knowledge, making you a more
informed investor.

What Is Staking In Crypto?
Crypto staking is the process of locking up crypto holdings to obtain rewards or
earned interest.
Cryptocurrencies are built with blockchain technology in which
crypto transactions are verified. The resulting data is stored on the blockchain.
Staking is another way to describe validating those transactions on a blockchain.
Depending on the types of currency you’re working with and its supporting
technologies, this validation process is called proof-of-stake. This process helps
crypto networks achieve consensus or confirmation that all the transaction data
adds up to what it should.

Achieving that consensus requires participants. That’s what’s staking is; investors
who actively hold on to, or lock up, their crypto holdings in their crypto wallet are
participating in these networks’ consensus-taking processes. Stakers are, in
essence, approving and verifying transactions on the blockchain.

For doing so, the network rewards those investors. The specific rewards will
depend on the network.

It may be helpful to think of crypto staking as like depositing cash in a savings
account. The depositor earns interest on their money while it’s in the bank, as a
reward from the bank, which uses the money for other purposes (lending, etc.).
Staking coins is like earning interest.

How Crypto Staking Works
For the investor, crypto staking is a passive activity. When crypto investors stake
their holdings, the network can use those holdings to forge new blocks on the
blockchain. The more crypto you’re staking, the better the odds are that your
holdings will be selected.

Information is written into the new block, and the investors’ holdings are used to
validate it period since coins already have baked-in data from the blockchain, they
can be used as validators. Then, for allowing those holdings to be used as
validators, the network rewards the staker.

Pros And Cons Of Staking Coins
Because staking pool coins is a passive form of investment, there is little
downside. But it helps to consider the block rewards associated with staking coins
you hold, as well as to recognize the validity of cryptocurrency in general if the
value of the coin drops, which would impact the value of your stake in interest

Is Crypto Staking Profitable?
Anyone can earn crypto by staking cryptocurrency. But unless someone is sitting
on a huge stash of proof of stake coins, they’re not likely to get rich from the
stake. Staking rewards are like stock dividend payouts, and that is both are a form
of passive income. They don’t require a user to do anything other than holding
the right assets in the right place for a given length of time. The longer a user
stakes their coins, the greater profit potential there will be in general, thanks to
compound interest.

But unlike dividends, there are a few variables particular to proof of state coins
and influence how much of a staking reward users are likely to receive. Users do
well to research these factors and more when searching for the most profitable
staking coins:
• How big the block reward is
• The size of the staking pool
• The amount of supply locked

Additionally, the Fiat currency value of the coin being staked must also be
considered. Assuming this value remains steady or rises, staking could potentially
be profitable. But if the price of the coin falls, profits could diminish quickly.

The Takeaway
Staking is a way to use your crypto holdings or coins to earn additional rewards. It
can be helpful to think of it along the lines of generating interest on cash savings
and earning dividends on stock holdings.

Essentially coin holders allow their crypto to be used as part of the blockchain
validation process and are rewarded by the network for the use of their assets.
For crypto investors, staking can open another potential avenue for generating

American Wealth Strategist Staking Opportunities
American Wealth Strategist has been at the forefront of cryptocurrency investing
since 2016. Our results have created a large cryptocurrency portfolio that
qualifies for the best invitations for blockchain platforms to allow us to provide
validations for transactions.

For current American Wealth Strategist Wealth Multiplier Staking contacts:

Mike Miller, Director of Operations
American Wealth Strategist, LLC.
5851 Legacy Circle
Suite 6010
Plano, TX 76210