Currently, there are a lot of blockchains worldwide, and all of them need some kind of user participation to provide consensus. The consensus protocol is a mechanism that allows blockchains to validate and approve or disapprove data and transactions before storing them to make blockchain faultless. There are quite a few different consensus algorithms, and Proof-of-Stake (PoS) and Delegated Proof-of-Stake (DPoS) are the most modern and advanced ones.
What is Staking in Cryptocurrency?
To take part in the DPoS process, users save up digital assets to form a 'stake,' and delegate it to those who do all the up-keeping work and get a share of the reward in return. This process is called staking. By staking, you take part in the consensus mechanism, and the wallets that work as staking pools, share a part of their rewards, according to your stake with them.
Initially, this process required a considerable understanding of staking coins, but currently, there are a lot of staking tools for older blockchains, which makes the process very easy.
How Does Staking Work?
To start staking coins, you need to select a coin, accumulate enough of it for staking and find yourself a pool. Working with staking services is very straightforward and allows you to forget about all the technical hassles. The pool will provide you with all the stats about your stake and reward share, and its support can assist you in case you have questions.
Every service has a wallet address for a certain coin, and the only thing you need to do is delegate your stake to it. Once you do it, you are staking!
Is it Safe?
Staking is comparable with sending your funds to someone, but don't worry. They can't spend them and you retain full control of them. However, pools will have a possibility to cheat you, give smaller rewards, and use other possibilities of the protocol. Hence, you should always do your own research, and trust only pools that are transparent enough. Check our all the stats, research for the people behind the business and their contacts, check if they have any other blockchain-related businesses.