How To Put Your Digital Assets To Work And Earn Rewards

Staking is a method of collecting rewards for holding particular cryptocurrencies

If you are a cryptocurrency investor, staking is a term that you will hear often. Staking, like many other things in cryptocurrencies, might be a complex or simple concept depending on how many levels of understanding you want to uncover. It's the process by which several cryptocurrencies validate their transactions. The major lesson for many traders and investors is that staking is a method of collecting rewards for holding particular cryptocurrencies. However, even if you're just seeking to earn some rewards from staking, it's always useful to know the concept better to understand how and why things work the way they do.

What is staking and how does it work?

While many people earn from buying or selling cryptocurrencies, another group of investors makes a profit by staking rewards. The returns from staking returns are similar to a dividend or interest on a savings account, but with a far higher risk.

Let's explain it further. You can stake a portion of your cryptocurrency holdings and earn a percentage-rate reward over time if the cryptocurrency you have enables it. This is commonly done through a “staking pool”, which, as we mentioned earlier, is similar to the interest-bearing savings account.