Staking Rewards

An alternative to mining rewards. Staking rewards are earned by putting a certain amount of your cryptocurrency up as a 'stake' to confirm transactions. Rewards are given for doing this.

Staking rewards are a type of reward you can earn while holding a certain cryptocurrency. They are a fairly new concept and technology that is gaining ground. 

The term staking rewards comes from the introduction of a new type of method to secure a blockchain: Proof of Stake. 

In the original method of securing a blockchain and processing its transactions (Proof of Work), a user needed to buy special hardware that could make intense calculations. Then the user was rewarded.

In Proof of Stake, no equipment is usually necessary. Instead, generally speaking, a user will “stake” a portion of a certain cryptocurrency. They put that portion of their cryptocurrency as a guarantee that their transactions are correct and valid. Then, as the staking system processes those transactions, it also rewards the person who put that chunk of their cryptocurrency forward. 

The rewards you earn from staking your coins is called your staking reward. You can then take that staking reward and increase the coins you're staking to earn even more staking rewards, or you can withdraw and store or sell that amount. 

Since proof of stake requires minimal hardware (if any) compared to Proof of work, many users have been attracted to this method of earning rewards. 

Now, coins and cryptocurrencies that offer staking rewards have gained significant popularity.

In 2021, Ethereum is supposed to begin transitioning from proof of work to proof of stake. Currently, if you hold 32 ETH or more, you can earn staking rewards from holding these coins on a staking system when the system becomes available.