Proof of Stake is a cryptocurrency mining protocol that has been gaining popularity in recent years. It’s an alternative to Proof of Work, which cryptocurrency miners have used since the beginning of cryptocurrency. One reason for its popularity is how it can offer more energy-efficient mining than what was possible with Proof of Work. This blog post will explore some reasons why you should start looking into Proof of Stake now!
What is Cryptocurrency Mining?
The cryptocurrency mining process is a way for cryptocurrency transactions to be verified. A cryptocurrency transaction requires the miner, or user with specialized hardware that performs this job, to solve complicated mathematical problems in order to verify it before it can go through and become part of the blockchain, which is the decentralized public ledger used by cryptocurrencies like Bitcoin.
What is proof of stake cryptocurrency mining?
Proof of stake cryptocurrency mining is another method that cryptocurrency miners use to verify transactions. With proof of stake cryptocurrency mining, instead of having hardware like specialized computers or ASICs perform cryptocurrency mining, cryptocurrency transactions are verified using the currency’s existing users.
The cryptocurrency that uses proof of stake cryptocurrency mining is said to have “staked” currency units in order for them to verify transactions. For example, if you had 100 Bitcoin staked on your account and someone was trying to send 50 BTC somewhere else, they would first need to get your permission because it would require those cryptocurrency units from you. If the transaction was allowed, then it would be verified and added to the blockchain just as if a cryptocurrency miner had solved complex mathematical problems for that particular cryptocurrency’s network.
Proof of stake cryptocurrency mining is said to have several advantages over proof of work cryptocurrency mining. For instance, cryptocurrency users who stake cryptocurrency units can earn cryptocurrency mining rewards just for staking their coins. This is a great incentive for cryptocurrency miners because it allows them to make money without having to spend money on expensive hardware and electricity costs.
What is different about Proof of Work
In Proof of Work, cryptocurrency miners are rewarded with cryptocurrency when they successfully mine a block. This process is called mining because the miner has to solve complicated math problems in order for it to be verified, or mined. A cryptocurrency’s blockchain consists of blocks that contain data about all transactions made on the network at any given time. These include details such as who sent a coin, and for how much. This helps keep the network secure, but it does have its downsides.
Proof of work cryptocurrency mining has been under fire by critics in recent years since the energy costs needed to mine cryptocurrency have become so high that some countries, like China, have banned cryptocurrency mining in order to reduce energy outputs. Since the majority of cryptocurrency mining takes place in these countries that are trying to cut back on their energy usage, this has caused cryptocurrency prices to fluctuate.
In addition to this issue, cryptocurrency mining itself is an extremely complicated process that requires a lot of computing power in order for it to be successful and efficient. Thus, cryptocurrency miners have had to purchase specific hardware called ASICs which are expensive pieces of equipment that perform the cryptocurrency mining operation much faster than traditional computers ever could.
What are the advantages to proof of stake cryptocurrency mining?
Many cryptocurrencies are already using proof of stake mining, these include Cardano, Peercoin, Nxt, OKCash, BlackCoin, NuShares/NuBits among others. Here are just a few of the benefits:
- better for the environment
- more energy-efficient than proof of work cryptocurrency mining
- increased security
- faster transaction speeds
- opens opportunities for smart contracts and NFTs
- potentially lower cryptocurrency transaction prices since mining are not as expensive
What makes proof of stake cryptocurrency mining better for the environment?
The main reason why many cryptocurrency developers are moving towards using proof of stake cryptocurrency mining instead of proof of work cryptocurrency mining has a lot to do with sustainability and cost. In addition to this, it’s simply better for the environment.
Should You Invest in Proof of Stake Coins
One of the best cryptocurrency mining investments you can make right now is to purchase cryptocurrency units that use proof of stake cryptocurrency mining. This method may be somewhat new, but it allows cryptocurrency users to earn more coins just by staking their existing cryptocurrency in return for transaction fees rather than expensive and complicated mining methods. If you are thinking about
Where to Start Investing in Cryptocurrency
Our top choice for beginning investors is Coinbase. Read more about Coinbase and our review below.
Coinbase is a trading platform that allows you to exchange cryptocurrency. Coinbase was founded in 2012 and has over 10 million customers worldwide. Coinbase offers its users the ability to buy, sell, or trade Bitcoin, Bitcoin Cash, Ethereum, Litecoin, and many other coins. Coinbase also offers a growing list of complementary products, such as Coinbase Wallet and Coinbase Pro.
- Coinbase offers users the ability to buy, sell, store, and trade any number of cryptocurrencies within the app.
- Coinbase has over 10 million users worldwide which is more than enough to allow for a deep liquidity pool.
- Ability to easily transfer coins through their wallet to other wallets.
- Feature Rich.
- Easy for beginners to Cryptocurrencies.
- Free Crypto ‘learn & earn’ learning library.
- Borrow real cash against your Bitcoin.
- Stable and profitable company.
- The fee schedule is slightly confusing and they don’t do a great job of explaining add-on costs for using products like Paypal.
- Fees are higher than many of its competitors.
In Summary
Proof of stake cryptocurrency mining rewards cryptocurrency miners for staking their coins and has been gaining momentum in recent years as cryptocurrency developers move away from proof of work cryptocurrency mining. This is mainly due to the fact that it’s better for the environment, more energy-efficient, and offers increased security among other benefits. As with all technology, its impossible to know for sure about what the future holds, but its definitely something worth paying attention to.
Check out our other articles about getting started with Cryptocurrency
