While the Bitcoin network is secured by mining, many newer cryptocurrencies use an alternative consensus mechanism known as proof of stake (PoS).

This involves users staking their cryptocurrency—pledging their crypto assets to the network to help the blockchain validate transactions.

But staking isn’t just an altruistic act to benefit the network. In exchange for staking, you get rewards, often in the form of the cryptocurrency you have staked.

Here we explain how you can get started as a crypto staker.

What is staking?

Blockchains are basically databases of transactions with no central authority to maintain them.

To solve the problem of securely validating transactions, proof of work (PoW) blockchains like Bitcoin rely on mining—powerful computers competing to solve cryptographic puzzles. But mining requires expensive hardware and high consumption of electricity, so it’s not accessible for most people.

Proof of stake networks like Cardano and Ethereum replace all that with a mechanism of funds commitment known as staking.

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Author: Ekin Genç

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