Staking offers crypto HODLERS an easy way to earn a passive income
Cryptocurrencies offer many ways to earn a passive income. Staking is just one, and a great entry point for those looking to take the next step toward financial independence.
From the outset, what made decentralized technology so unique was that it rewarded miners for confirming transactions across the networks. This is called the Proof of Work or PoW method. But, in 2012, the Proof of Stake (PoS) consensus was introduced.
With that in mind, let’s learn more about staking and explore the cryptocurrencies that can be utilized to earn a passive income. Then, learn more about the rewarding process of PoS and also what staking coins to look out for in 2020.
What is staking?
Staking is a system whereby owners of certain cryptocurrencies receive rewards for their contribution to the network. Incentives given to cryptocurrency owners depend on the number of tokens they have in their wallets. This method over time has also proved to be more democratic and popular than PoW (mining).
The PoS method of confirming transactions involves owners of certain cryptocurrencies being compensated with rewards for their contribution to the smooth running of the network. The reward amount is dependent on the number of crypto tokens held in their wallets.
In the long-term, this has proved a far more popular method because there is a higher chance of everyone getting compensated with a passive income. Unlike PoW where only large scale miners earn good incentives. Staking has also encouraged crypto enthusiasts to hold on to tokens for a longer amount of time, adding more buoyancy to the ecosystem.
PoS blockchains simply allow users to validate the transaction by depositing and also hodling a certain amount of cryptocurrency. Therefore eliminating the need for mining hardware to confirm their transactions.
Staking is an excellent way to put your crypto to work and make a passive income. Knowing the right cryptocurrencies as well as the most profitable staking systems is the key. This will ensure you earn the highest amount of dividend possible for your work.
Let’s explore the five best coins to stake in 2020 to generate a passive income.
EOS makes use of the delegated PoS consensus method and actually prived a very useful reward calculator on their site for potential users to weigh up any gains. Scatter is the main wallet of EOS and when staking the first thing you will need to do is to download “Scatter“.
EOS staking (also known as block producing) is one of the best options in the cryptocurrency space. All EOS holders have to vote for a Block Producer (BP). The 21 BP with the highest votes will be allowed to produce blocks. EOS staking also has an annual reward of app. 4.4%.
- Token: EOS
- Annual Return: 4.4%
- Staking wallet: Scatter wallet
Formerly known as XCoin and DarkCoin, renamed to Dash in May 2015. One of the first cryptocurrencies to switch over to a PoS consensus mechanism. Users are promised anonymous, trustless and instant payments. Dash currently yields 7.01% for operating a masternode and also touts itself as a decentralized P2P electronic cash system with hopes to become as acceptable as fiat.
DASH hodlers can earn staking rewards by running a masternode. However, to operate a masternode, you need at least 1000 DASH. One unit of Dash is about $75, at the time of writing. $75, 000 (1000 x $75) might seem like a lot. But when you consider that for every $75,000 you invest, you receive an annual interest of 7.5%.
- Token: DASH (Dash)
- Annual Return: 7.5%
- Staking Wallet – DASH Desktop Wallets for staking
Formerly known as Antshares, NEO was the first Chinese open-source blockchain platform. Touted as being a “distributed network for the smart economy”.
The NEO blockchain supports two native tokens: NEO and Gas. Gas is a given to people who hold NEO and NEO blocks generate 8 Gas every 15-20 seconds. Staking NEO has an interest rate of 5.5% with Gas issuance is expected to stop in approximately 22 years.
In order to earn NEO, you will first need to purchase some from a crypto exchange. You will also need to download and install the NEO wallet, this is because it is the only one that can receive GAS. One GAS is worth approx $24.
- Token: NEO
- Annual Return: 5.5%
- Staking Wallet: NEO staking wallet (NEON)
Ontology is a digital which at the time of writing was priced at $0.40. Its daily trading volume amounts to $102,741,273 with an annual staking reward of 5.6%.
In order to stake ONT, you will need to purchase 500 Ontology first. 500 ONT is approximately $200. You will also need to download and install the latest version of OWallet. One note to mention is that users are offered the option to join one of the top seven nodes. We would advise you to choose the lowest-ranked node (Rank 7) as it is expected to produce a higher monthly reward payout.
- Token: Ontology [ONT]
- Annual Return: 5.6%
- Staking wallet: OWallet
NULS offers one of the easiest coins for staking. Its price at the time of writing is $0.18 with a daily trading volume of $7,412,226. The crypto has an annual yield of approximately 13.1% to 15%.
Nuls is a little different to the other tokens mentioned in this article and has some specific steps which must be followed to get started. Firstly you will need to swap your ERC20 NULS tokens to MAINNET NULS coins. To qualify for staking you also need a minimum of 2000 tokens (app. $360) to start staking. Then, download the latest version of NULS wallet from the official website. Finally, you choose a node to join and get started.
- Token: NULS [Nuls]
- Annual return: Ranging between 13.1% and 15%
- Staking wallet: NULS wallet