Is Ethereum staking a game changer? The Ethereum organization made a major announcement last week that shocked the crypto world. Ether’s network is migrating from Proof-of-Work (POW) to Proof-of-Stake (POS).
The Ether network upgrade, dubbed Ethereum 2.0 is a major one. The new system will allow holders to participate in Ethereum staking, where each person is called a validator.
Proof-of-Stake (POS) market dominance
Crypto staking or Proof-of-Stake (POS) is the fastest trend in blockchain technology right now. With a market capitalization of $25.8 billion, staking is dominating with 10% of the total cryptocurrency market capitalization.
The 10 top coins that support staking account for over 90% of the $25.8 billion worth of transactions to date.
What is crypto staking & how profit is made?
staking is a form of Proof-of-Stake (PoS) performed on the blockchain that allows crypto holders to earn passively income in the form of interest or rewards on for participating on the network.
The process is fairly straight forward. Participants deposit and hold tokens on network in order to help maintain it. In return, they earn rewards based on the amount held.
Whatever profit the network earns is distributed to holders. In the case of Ethereum staking, the participants are called network validators.
Until the switch, Ethereum was using the same system as Bitcoin; Proof-of-Work (POW). In POW, instead of mining blocks, they are validated.
Rewards or interest are issued to block validators based on the amount of tokens they deposited to the network. A user deposited 10 ETH as collateral to Ethereum’s Proof-of-Stake (POS) will get rewarded based on that number.
Participants have the options to cash out or continue holding the extra tokens to get additional rewards for them.
When is Ethereum staking (Ethereum 2.0 POS) release date what’s the reward percentage?
ConsenSys senior executive, Collin Myers revealed earlier this week that Ethereum staking platform will be released in January 2020. The reward or interest for Ethereum 2.0 validators will be between 4.6% to 10.3% annually.
Mathieu is a Information technology professional with over 15 years of experience. He started one of the first bitcoin blogs existed in 2010. He started writing about, investing in bitcoin and promoting the first cryptocurrency when only a few technological savvy people knew about it. Mathieu is a world traveler who enjoys culture, technology, finance, salmon, rice and beans. He’s cool, collected and knows a great deal about blockchain technology.