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    Author Topic: What is staking?  (Read 21863 times)
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    • onepix (OP)
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    February 02, 2016, 01:42:34 AM
     #1
    The question is in the title, I've only heard of this when people talk about altcoins so I think this is the best section.

  • arbitrage
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    February 02, 2016, 09:34:10 AM
     #2
    Better of mining!
    You get a small fee from your keeping coins in open wallet.
    Probably best way for getting coins, but you must choose wisely which coin you will stake..

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    February 02, 2016, 10:32:04 AM
     #3
    Normally you mine with your computer and get coins as a reward. Thats how transactions are confirmed.
    Thats called Proof of Work (PoW).

    But there is also a System called Proof of Stake (PoS).
    The transaction confirmations are not done with hardware but with already owned coins.
    An amount of your coins are on the stake, while they are used for staking. That depends a little on the implementation.
    But basically you get a certain percentage of your coins as a reward.
    Some people think, they can "earn" here, but that's nonsence, because if the market cap stays stable, the single coins are worth less, if new coins are generated. So you just "keep" your value, if you are staking. And "loose", if you are not...
    Its like in a bank if you get 2% interest and the inflation is 2% as well.
    You only "earn", if there are transaction fees and if those are also payed to the staker.

    There are also similar coins that don't use "staking". They use for example "forging" (NXT) or "harvesting" (NEM), what is also based on the coin stack, but they don't create coins and only get the transaction fees.

    There are also coins, that combine PoW and PoS. In general there are 3 possible ways:

    1. Only PoS coins, that are "premined" and just sold in an IPO (NXT, NEM)

    2. Use of PoW and PoS hybrid (Peercoin)

    3. Use of PoW only as a distribution method until a certain time and then use only PoW (Blackcoin, Bitz)

    I think its a matter of taste, what is better. I personally like the 1. and 3. option the most.

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    February 02, 2016, 11:02:55 AM
    Last edit: February 02, 2016, 04:00:59 PM by Snail2
     #4
    Quote from: onepix on February 02, 2016, 01:42:34 AM
    The question is in the title, I've only heard of this when people talk about altcoins so I think this is the best section.

    Staking is the "mining" of PoS (proof of stake) coins. As BTC using PoW, indeed you can't hear about PoS outside the altcoin board. You can find some basic info here: https://en.wikipedia.org/wiki/Proof-of-stake

    Staking starts with storing your coins in your wallet. If your coins reached "maturity" (coin age=whatever days) you can start staking by opening your wallet and unlocking it for staking. Then your wallet start competing with other wallets for signing the next block. After signing a block you will get a reward -depending on the given coin that used to be a few percent of your staked coins- and your coins age will be zeroed out.

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    February 02, 2016, 11:38:33 AM
     #5
    Normal mining as oppose to staking though require hardware that needs to be upgraded just like what Bitmain is doing. While in POS, you don't need such.
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  • riceberry
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    February 02, 2016, 03:14:02 PM
     #6
    Staking is like earning interest on the coins you hold. In POS it supports the network.

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    February 02, 2016, 07:06:05 PM
     #7
    Quote from: riceberry on February 02, 2016, 03:14:02 PM
    Staking is like earning interest on the coins you hold. In POS it supports the network.
    This is a nice concise answer.

    Staking is the reward you receive for supporting the network by holding coins and running a node. If you have coins in a wallet that is a POS coin your supply of coins will grow as long as you are holding the coins.

    Staking is also related to time. You are paid an amount based on an amount of time that has elapsed. Some coins also have limitations on when the coins will stake and for how long.

    Different coins have different values for how the staking works and these values are important for assessing the value (or future value) of a coin.
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    February 02, 2016, 09:30:10 PM
     #8
    Are there any lists available of high staging coins? Could be interesting for buy and hold. Thanks in advance  Smiley
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  • onepix (OP)
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    February 02, 2016, 10:57:19 PM
     #9
    Quote from: lordoliver on February 02, 2016, 10:32:04 AM
    Normally you mine with your computer and get coins as a reward. Thats how transactions are confirmed.
    Thats called Proof of Work (PoW).

    But there is also a System called Proof of Stake (PoS).
    The transaction confirmations are not done with hardware but with already owned coins.
    An amount of your coins are on the stake, while they are used for staking. That depends a little on the implementation.
    But basically you get a certain percentage of your coins as a reward.
    Some people think, they can "earn" here, but that's nonsence, because if the market cap stays stable, the single coins are worth less, if new coins are generated. So you just "keep" your value, if you are staking. And "loose", if you are not...
    Its like in a bank if you get 2% interest and the inflation is 2% as well.
    You only "earn", if there are transaction fees and if those are also payed to the staker.

    There are also similar coins that don't use "staking". They use for example "forging" (NXT) or "harvesting" (NEM), what is also based on the coin stack, but they don't create coins and only get the transaction fees.

    There are also coins, that combine PoW and PoS. In general there are 3 possible ways:

    1. Only PoS coins, that are "premined" and just sold in an IPO (NXT, NEM)

    2. Use of PoW and PoS hybrid (Peercoin)

    3. Use of PoW only as a distribution method until a certain time and then use only PoW (Blackcoin, Bitz)

    I think its a matter of taste, what is better. I personally like the 1. and 3. option the most.
    thanks, this clears it up for me
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