If you opened this article, then you must be interested in how to earn crypto besides classic forex trading. So there’s mining and staking crypto. But which one should you choose?
The answer depends on what is more important to you – quick profit or security and environmental care?
If you want quick profit, then sure, you can choose to mine crypto. But take note that this might costs you more than you think.
Why is staking a better idea?
There are three main reasons why people prefer staking over mining:
- It’s cheaper;
- It’s easier;
- It’s ECO-friendly.
First of all, to mine crypto, you need mining equipment, like ASIC, GPU, or CPU – depending on what crypto you want to work with. And if you want to have real chances, you certainly don’t need equipment that breaks down in just a couple of weeks.
Even more, some cryptocurrencies like Bitcoin come with high competition. Just write “Bitcoin mining farms” on Google and see what you’re up against.
Staking crypto, on the other hand, doesn’t need any equipment – just a digital crypto wallet that has the staking feature.
Secondly, you need to constantly check your results when you mine crypto – to make sure it works how it should. But staking is a pretty straightforward validation process: you deposit your crypto in a pool and get daily rewards until you choose to withdraw your profits.
And lastly, crypto mining is known for how it affects the natural environment. We are talking about a validation method that hit the annual electricity consumption of 129 billion kWh – and that’s just Bitcoin.
But crypto staking happens online, on the web, or on mobile. It doesn’t consume more than an episode of your favorite Netflix series.
The only disadvantage is that the rewards aren’t just as big as from crypto mining, but it’s a lot safer and gives you a long-term profit.
What are the risks of crypto staking?
Like any other method of earning passive income, crypto staking comes with its own risk – and that is the impermanent loss.
Think about it this way: if you stake 100 tokens with an individual value of $500, and by the end of the staking period the value decreases to $350, your staking rewards will most likely not cover your loss.
To avoid this kind of impediment, you need to choose a crypto platform that comes with a high Annual Percentage Yield. One of the best ones is Student Coin, which has a 13% APY.
If the price of the STC Token goes down while you’re in the staking period, you will be covered. And if it goes up, then the profit will be significant. And looking at the 500 universities that back up the project, it’s hard to imagine it will ever face a bear run.
In conclusion, you need to know how and where to stake crypto before deciding to invest in such a validation method. It’s better than mining in terms of ECO-friendliness and costs, but you need to keep your eyes on APYs no matter what.
What platform do you use for crypto staking? Tell us in the comments!