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What is Staking?

by lerika

Of all the types of earnings in cryptocurrencies, many investors choose staking. We are launching a series of articles in which we will tell you about all the platforms for staking TON Crystal tokens and other tokens of the Free TON network.
So what is staking? Actually, staking logic is very similar to a bank deposit. The investor (individual or institutional) delegates funds to a third party for a specified period at specific interest.

Staking is a passive way to make money on cryptocurrencies, which is based on the Proof-of-Stake (PoS) protocol. The main difference between the POS protocol and POW (Proof-of-Work) is that the network stability and operability are ensured by the number of tokens on the wallets. In the case of the POW protocol, the operability of the network is provided by miners due to the computational potential of their equipment (ASIC miners).

The sensational update of the Ether network in 2020 is nothing more than its transition from the POW protocol to the POS.
Many leading cryptocurrency exchanges have started staking. These include Binance, Kraken, Bitfinex, Okex, and others. Moreover, this method of investing is becoming so popular that separate staking platforms such as EverStake and Staked are being created. An even easier option is staking tokens from cold wallets like Trust Wallet or Ledger.

Many cryptocurrency experts consider staking to be the investment of the future because it is nature friendly (does not consume resources, unlike mining), does not require special skills and technical equipment. Moreover, there is an opinion that staking is a less risky investment than mining because the equipment for the latter can significantly drop in price sometime after the acquisition. The editorial staff of ton-news considers this statement to be very controversial because the price of tokens that investors irrevocably delegate to staking can also decrease.

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