What is Staking?

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What is Staking?
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• Earning interest income on cash holdings or
  dividend income from stocks is considered one of
  the common ways to make passive income. What if
  there exists a possibility to generate interest
  income from crypto assets as well?
• Yes, this is possible through Staking.
• Put simply, Staking is a way to earn interest on
  your locked crypto holdings that will help
  validate transactions on their underlying
  networks. To understand it better, lets learn
  the concept of Proof of Work (PoW) and Proof
  of Stake (PoS).

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What is Proof of Stake (PoS)?
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• Consequently, an alternative consensus mechanism,
  Proof-of-Stake (PoS) emerged in 2011, which does
  not need miners and any mining hardware and
  software. 
• While the ultimate aim is to secure a consensus
  on the blockchain network, PoS is less energy
  intensive.

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• General rules for staking
• Although the stakin rules might vary on each
  network, the general conditions remain the same
  as follows
• The staker is required to only validate valid
  transactions on the network.
• In exchange for approving valid transactions, the
  network rewards the staker with a reward.
• If the staker approves illegal transactions, they
  stand a risk of losing their coins or stake.

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• Conclusion
• Whilst staking seems very enticing as an
  alternative source of income, we need to be
  mindful of the fact that crypto currencies are
  highly volatile and entail risk. Since the coins
  are locked during the staking period, it is
  generally suitable for the investors with a long
  term view. At Fujn, we suggest adopting a
  cautious approach based on your risk appetite and
  perform a due diligence while indulging into any
  crypto investing and staking.

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