In layman's terms, staking coins would refer simply to having certain types of coins in that corresponding coins wallet while it's open and connected to the web in order to help that specific coins blockchain secure transactions. By doing so, you will be rewarded with new coins and/or transaction fees that will be added to the coins that you already have in the wallet.
For many the elusive ship has sailed as far as being 'early adopters' of crypto is concerned. And merely HODLing is proving for many to be a slow and tedious process. Some resort to trading and in many cases losing thru ponzi schemes or just plain bad investment decisions.
Yet others, continue to chase the dream by creating incomes thru mining; as contentious as it may be. Many have declared mining -whether it being thru the use of ASIC miners or GPU, a threat to the environment as the continual rise of difficulty forces miners to in effect, 'mine against themselves' as the difficulty levels keep on rising. A quick look at https://btc.com/stats/diff and the difficulty level increase on (bitcoin) mining quickly becomes evident. Some months an increase as much as 30% can be observed. So for a miner (of bitcoin) he/she would have to increase the hash power of their mine by at least a similar amount monthly. This alone could run into the thousands. Then, of course, there is the question of cheap electricity to power those machines as well as the necessary cooling considerations of these facilities and machines.
This is where others that are proponents of the proof of work algorithm, as the backbone to the security of the blockchain, may be able to benefit because it excludes these and other factors.
The dawn of the Masternode
Another option has emerged with the advent of Cryptocurrencies like Dash. -The 'Masternode' currencies. Dash was the first 'anti proof of work' coin that advocated the use of the 'proof of stake' protocol.
Unlike mining or proof of work coins, Dash uses this protocol and rewards Masternodes, not miners, to check and verify transactions. This is to say that if you have a certain amount of coins in your wallet and declare yourself a Masternode, you help secure the network in question and get rewarded for this process.
The problem with these Masternodes is that it can indeed be a very expensive exercise as you would need (in some cases) a large amount of capital to fund these wallets. In the case of Dash as an example, you would need a thousand coins in your wallet; at the time of writing, that would equate to more than $160k. Quite obviously out of reach for many.
You can readily check some of these Masternodes and the amounts needed to fund them by referring to https://masternodes.pro/statistics
Because of this costly exercise, many have declared currencies like Dash that uses this protocol, as centralized, and not as secure as the Bitcoin or the proof of work protocol. Be it as it may, the inevitable happened and the Dash code was copied, modified and changed to create a plethora of more coins.
Then the proof of stake coins emerged that doesn't require a certain amount of coins in a wallet. https://www.poslist.org/ Indeed, in some cases these coins do not have Masternodes at all, they just require that a user has some coins in his wallet while it is connected to the web to help verify transactions. In exchange for staying online, these wallets or nodes, get rewarded with new coins and/or transaction fees. Just a few examples would be coins like ClubCoin, Potcoin (as made famous recently by Dennis Rodman https://www.theverge.com/2018/6/12/17453080/dennis-rodman-potcoin-bitcoin-donald-trump-kim-jong-un-north-korea ) and Bean-Cash to mention but a few.
Yes. I hear many of you say "shitcoins". Mostly agreed -hence the title of this article. But my reply would be quite simply that there's a place for all of these and more in the 'crypto-ecosystem'.
Definitely. Some will die; if not most.
But the fact that they exist and are currently part of the 'crypto-sphere' is undeniable.
How to stake
In most cases it's surprisingly simple really. In 'most' cases...
Most coins have wallets that you can download from their respective websites. You would then proceed to buy some coins, load up the wallet and after you have synced the blockchain of that coin, simply have the wallet open and connected to the web in order for it to stake.
I would recommend that you do thorough research on what coins you would like to stake by using sites like:
https://coinmarketcap.com/
https://www.poslist.org/
https://walletinvestor.com/
If you want to dabble with Masternodes, then you could use https://masternodes.pro/statistics as I mentioned earlier.
This is however where your conundrum starts.
"Some of these coins are only available on Unix or Linux platforms and I do not have that on my PC."
"I do not know how to use command line and are scared of doing something wrong."
"I only have a laptop and I use it for work. I can't have it on all the time."
"What if I want to stake a few different coins?
"What if I really want to take part in a Masternode but simply can't afford it?"
I think you get the jest.
Fortunately for us, there's platforms that can help. A simple google will offer you a few options, but please use your due diligence. Remember that in order to use these online platforms, you will need to send them the coins that you have bought. They will have custody of your coins to do with as they like. Please be carefull!
The one platform that I have discovered and really enjoy, is SimplePos.
They have dedicated Support in an open forum on their own Discord server. They maintain the various staking wallets including updating them, restarting them and programming them with the needed changes. Give regular Airdrop give aways of new coins and also run Masternodes for their users. They also have brilliant FAQ pages and actually make it as simple as purchasing the coins, sending it to them and then enjoying the staking rewards.
They do not have all the staking coins or masternodes available as there are so many, but they take the hassle out of determining witch ones are best. They also allow the users to vote for the new coins via their Discord.
As far as their Masternodes are concerned, they pool a Masternode. In other words, they would split the needed amount of coins for a Masternode up to allow users to purchase a smaller amount and pooling it together with other users, so that the Masternode would get the amount of coins needed. The rewards would then be shared umongst the users that contributed to the Masternode. They actually make it very simple. I think this is where the name came from.
If you liked this article and found it usefull, please consider using my referral links for CoinExchange (where you can find most of the coins that Simple Pos offers for staking) and also my referral link for Simple Pos itself.
Till next time -be safe, and happy staking!
CoinExchange
https://www.coinexchange.io/?r=2a75c774
SimplePosPool
https://simplepospool.com/?ref=Trebou
All images here CC0 Creative Commons, https://pixabay.com/