The process of active participation of validators in Proof of Stake ( PoS) blockchain for the process of validation or mining, with minimum required cryptocurrencies, is known as staking or crypto staking. These validators will be rewarded some amount which is termed as staking rewards.
In simple, staking is nothing but a way through which validators or miners execute transactions in PoS blockchain and get rewards.
What is Proof of Stake ( PoS )?
Proof of Stake is a blockchain consensus mechanism that allows a person to mine or validate the block based on the number of crypto coins or stake he holds. This implies that the more cryptos one owns, the more probability he/she has to mine the next block transaction in a PoS blockchain.
This Proof of Stake ( PoS ) was created as the alternative to Proof of Work ( PoW) which aims to achieve distributed consensus in the blockchain network.
How does crypto staking works?
The process of crypto staking slightly differs from one crypto exchange to another with simple changes like stake amount to participate in staking or staking rewards and so on. However, the crypto staking works as follows,
In PoS blockchain, if a validator has met with minimum balance ( that is required to involve in staking ), the validator/node deposits this amount into the network as stake.
More the deposited stake, the more the probability for that node to take part in staking. That is the amount of stake is directly proportional to the probability of that validator/node to build the next block in the network.
As if the validator rewarded in PoW chain, here in PoS blockchain network, if the validator completes the process of staking, ie., if he creates the next block successfully in the network, he is rewarded which is known as stake rewards.
If the node or validator attempts to hack or attack the network or double-sign the network, then he will be resulted in losing his stake.
This is how the process of staking takes part in the blockchain which is the backbone of the performance of secured cryptocurrency exchanges.
Top Crypto coins that can be staked
Here comes the list of crypto coins that can be staked and are being staked higher in recent days.
1. Tezos (XTZ)
2. Algorand (ALGO)
3. Synthetic (SNX)
4. Decred (DCR)
5. Cosmos (ATOM)
6. Icon (ICX) and so on
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Source: What is Cryptocurrency Staking?
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