Summary: Earning rewards via staking is one of the key ways of making your crypto assets grow over time. By staking your crypto, you are rewarded for putting the blockchain to work. In this article we explain what cryptocurrency staking is and how to generate a return on your investment. We look at the most common methods used to stake crypto and explore how to earn passive income at CoinField.
What is Cryptocurrency Staking?
Cryptocurrencies that allow staking use a consensus mechanism, which ensures that all transactions on the blockchain are verified and secured without the use of an intermediary (such as a bank or payment processor). The two consensus mechanisms that are used for staking are called ‘proof-of-work’ and ‘proof-of-stake’. Understanding proof-of-work and proof-of-stake will help you to make the right choices when investing in crypto.
Proof-of-work (PoW) is used by cryptocurrencies such as Bitcoin, Ethereum and LiteCoin. You can view the top 20 proof-of-work coins and tokens by market cap here.
A blockchain is a decentralised ledger of all the transactions across a network. Groups of approved transactions together form a block and are joined to create a chain. Proof-of-work is the process of adding new blocks of transactions to a cryptocurrency’s blockchain. The ‘work’ to do this generates a hash (a long string of characters) that matches the target hash for the current block.
Crypto miners perform this task by solving complex mathematical problems to verify the blockchain using powerful computers (that consume a lot of energy). They are rewarded with the newly minted coins and this is how new coins are released into the blockchain. For example, if a Bitcoin miner successfully adds a block to the blockchain they will receive 6.25 bitcoins as a reward.
An alternative and less-energy consuming consensus mechanism is proof-of-stake (PoS). With the proof-of-stake model, the owners of the cryptocurrency stake their coins, which gives them the right to check new blocks of transactions and add them to the blockchain.
For example, Cardano (ADA) is a proof-of-stake blockchain platform that prioritises security and sustainability. ADA holders can stake it and set up their own validator node. When ADA needs to verify blocks of transactions, its protocol (called Ouroboros) selects a validator. The validator checks the block, adds it and receives more Cardano as a reward. Other popular examples include Polkadot (DOT), Solana (SOL), VeChain (VET) and Tezos (XTZ).
The proof-of-stake consensus mechanism is mutually beneficial for the cryptocurrencies that use it (and their investors) as it is scalable. Most importantly, cryptocurrencies that use proof-of-stake are able to process transactions quickly and for a low cost. In contrast to proof-of-work, proof-of-stake is environmentally friendly, which makes it a popular choice.
The staking process will differ depending on the coin you want to stake and the method you use. There are several choices available, but the most common is to utilize a Cryptocurrency Exchange, a Crypto Wallet, or a Hardware Wallet.
Staking your cryptocurrency on an exchange is a simple operation (and most exchanges will have a similar process). Simply make sure the cryptocurrency is in your wallet and choose your preferred staking term. Staking directly from a wallet necessitates a little more knowledge, but that doesn’t mean it’s out of reach for the average investor. You’ll need a wallet that allows you to stake your coins. Simply download the wallet and follow the on-screen instructions. This is also the case with hardware wallets like Ledger or Trezor, which allow you to stake directly from the app.
Earning Passive Income at CoinField
In 2021, exchange coins significantly outperformed traditional cryptocurrencies such as BitCoin and Ethereum. This is very positive news for investors wishing to earn passive income from CoinField Coin (CFC), the newly launched utility token that powers the CoinField ecosystem.
You can earn passive income from CFC in the following ways:
1. Participate in the CFC Staking Programme
The CFC community can lock their holdings for a set period of time (ranging from 6 – 24 months) and receive CFC rewards. The rewards are distributed daily and range from 5% to 15% per year (T&C’s apply). There is a limited pool of 50M CFC, so act soon.
2. Join the CoinField Referral Programme
Refer new customers to CoinField and receive 10 CFC and up to 50% commission on trading fees, when a minimum $100 deposit is made on the CoinField exchange (T&C’s apply).
3. Become a Partner
There are numerous benefits to becoming an official CoinField partner. Approved partners with active and growing communities can earn up to 50% commission from trading fees and 2.5 CFC when a new registrant makes their first deposit.
Why CFC is a Smart Investment Choice
The team at CoinField are on a social mission to improve the lives of farmers in Africa by using CFC to increase the buying power of food for African farmers and their families. CoinField has partnered with Tingo, Africa’s largest agri-fintech to on-board 10 million users of Tingo to the CoinField platform and later in the year CFC will be listed on the Nwassa trading exchange.
The growth trajectory for CFC serves to drive high demand for the token. By the end of 2022, CoinField will expand into 18 countries in Africa and expect the customer base to hit 30 million. Additionally, many new and exciting projects are scheduled for launch this year, including the CoinField NFT Marketplace and GameFi domain. These exciting projects add significant value to the CoinField ecosystem to positively impact the value of CFC.
- Investors should stake their crypto to earn passive income, especially when markets are volatile.
- Cryptocurrencies are decentralized, therefore they need a consensus mechanism to ensure all transactions on the blockchain are verified and secured without the use of an intermediary (such as a bank or payment processor).
- Proof-of-stake is becoming the most popular consensus method as it is more scalable and environmentally friendly than proof-of-work, which consumes a lot of energy.
- Understanding proof-of-work and proof-of-stake will help you to make the right choices when investing in crypto.
- The staking process will differ depending on the coin you want to stake and the method you use. There are several choices available, but the most common is to utilize a Cryptocurrency Exchange, a Crypto Wallet, or a Hardware Wallet.