Crypto Staking vs Stocks: All You Need To Know | HackerNoon

0


image

The world of cryptocurrency is ever expanding: that means that to remain in the wave of things, you have to be alert. There are unique terms used for different types of cryptocurrency transactions and crypto staking is one of these terms.

image

 Crypto staking is mainly used to confirm transactions on the blockchain: however, for some crypto currency holders it is a great way to hold some coin and make a decent profit. Whichever way you look at it, crypto staking is a very significant aspect of the blockchain, providing a market cap of $633 billion for all the staking platforms.

Stocks go way back: over the years, they have provided a safe and reliable platform for investors to put in their money. Despite the fluctuations that these equities undergo in the stock market, investors still buy them because they are easily resellable. In this article, I will be doing a side by side comparison between Crypto Staking and Stocks. I want you to know why you should do Crypto Staking (or both Crypto Staking and Stocks) today.

Table of Contents

Crypto Staking: All About The Buzz

Stocks: What You Need To Know

Crypto Staking vs Stocks: Pros and Cons

Crypto Staking: The Future

Crypto Staking vs Stocks: My Final Thoughts

Crypto Staking: All About The Buzz

Crypto staking has been around for a while now but it was not initially known to many crypto users. Then it was a silent crypto verification and earning system, now it is the next big thing in the cryptocurrency market. The question is: ‘Why is Crypto staking so popular?’ I will provide you with the answer: ‘More people are aware of the benefits that Crypto staking provides.’

image

The main idea behind staking began with the Proof of Stake that was described by Sunny King and Scott Nadal in their 2012 paper for Peercoin. The Proof of Stake model allowed users to produce and validate new blocks by just locking up their coins. The more coins the users hold, the more likely they are to get a chance to validate a new block and get a reward ( The more coin you hold, the larger the profit).

According to a February 2022 Blomberg report, this year the rewards from Crypto staking have been so lucrative that more than 70% of all tokens were staked late last year. These tokens range from Binance Smart Chain, Solana, Cardano, amongst others. Ethereum is expected to migrate to Proof of Stake this year. The good thing about staking is that it is considered less stressful and risky: it is a good way to hold your coin and make some extra money.

Stocks: What You Need To Know

Stocks are as old as the 1100s with France being the first solid example of a brokerage: as the years passed by, the Dutch East India Company released shares of the company on the Amsterdam stock exchange. This was a significant year for stocks and since then, stocks have been used by individuals, companies and governments to generate income.

image

The way stocks work is that you are buying units or parts of ownership of a company. The cool thing about stocks is that they give you voting rights in the organization you bought them from, so you have a say in the way the organization is being run (the more stocks you have in an organization, the stronger your opinion). You can also sell your stocks to make a quick profit: stock brokers provide good advice on when it is best to sell.

The stock market in 2020 recorded a global market cap of $95 trillion (my mouth was wide open when I read this) and more than 80 % of the stock market is now automated. More people are buying stock and American stock investors are more open to diversifying their stock portfolios by buying stock from other countries. The stock market is one of the largest money making markets in the world: you can join in the money making part of it( use a good stock broker and invest with your spare money).

Crypto Staking vs Stocks: Pros and Cons

Crypto Staking is relatively new, but it has the ability to bring in more profits for investors than the old investing method of buying stocks. The volatility of cryptocurrency can sometimes result in very large gains for users who can hold their token and watch it rise over time. Staking can give investors passive income of at least 5% to 20% per annum and when you consider the way the prices of tokens rise significantly, the profits become large. 

image

Stocks have the advantage of resellability: you can sell your stock during the stock trading market opening hours (Monday through Friday, 9: 30 AM to 4 PM EST excluding holidays) and after opening hours on some exchanges. When you stake your crypto tokens, you cannot sell them until the staking period is over. If the price of the tokens fall while you are staking, your profits will take a hit if you sell immediately after the staking.

image

Crypto staking is relatively easy: all you need is a crypto wallet, a token that is compatible with the Proof of Stake model, good research on which token to stake and the patience to wait through the staking period. This is unlike the stocks investing method which requires a good stock broker and careful monitoring of the stock market. However, in terms of country regulations most countries are more supportive of stocks than Crypto staking. This is because it is easier to monitor Stocks trading than Crypto staking: cryptocurrency transactions are harder to monitor by financial organizations.

Crypto Staking: The Future

Crypto Staking has been described as the quiet giant of crypto yield: it has risen in popularity as a way to passively generate income while contributing to the security of the cryptocurrency block chain. Ethereum 2.0 launched its Beacon chain in December last year and more organizations are interested in the possibilities that crypto staking has to offer.

image

Crypto staking provides a relatively safe, energy efficient way for users to make profit: it is an easier method of generating rewards than mining and safer than token trading. You do not need to purchase any equipment for staking like you would when you need to mine tokens. The best part of the deal is that there are staking pools made available for investors to come together and pool their tokens. Although these pools may take a small percentage of staking rewards, they give you a better chance of earning these rewards and making money for yourself. The rewards include additional tokens and voting rights.

There are so many possibilities for crypto staking in the years to come: the waiting periods for unstaking will most likely be reduced alongside the staking periods and there might be opportunities for users to withdraw some staked tokens, perhaps with a penalty fee. Crypto Staking is a moving horse that I think you should jump on: the possibilities are endless.

Crypto Staking vs Stocks: My Final Thoughts

As someone who is interested in investing and growing financially, I would tell you to invest in Crypto Staking with long term expectations because of the leaps in token prices. You should do your own research on which token to invest in and how long you are expected to hold the token for. You should also consider regulations in your country, as well as available staking platforms. 

image

Stocks are good too, but do not expect huge profits from investing in them (unless your investing capital is huge). If you want to invest in stocks, get a good broker and stay aware of everything that goes in the stock market. In all your investments, use your spare money ( do not borrow money, sell all your property or deny yourself basic needs to invest).

I think that Crypto Staking is like getting Stocks in crypto, but better. You have most of the benefits that Stocks investing provides and the opportunity to make mouth watering profits. CryptoStaker provides you with resources to learn more about Crypto Staking and gives you the most trending news updates on Crypto Staking so that you can get those additional tokens (profits and more $$ in your bank account).

Tags



Read More: Crypto Staking vs Stocks: All You Need To Know | HackerNoon

Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments