If you’ve been in the crypto sphere for a while, then you probably know what to expect. You might have even experienced it first-hand. However, if your experience is limited and you want to maximize your returns. This guide will be worth reading. So, without further ado: let me walk you through my expectations and reality of staking the best coins.
Staking is a process where you hold a certain amount of coin used as an investment. In return, those coins will generate more tokens for the owner every day. The gain is called staking reward. The value of your staked coins can increase or decrease depending on what happens to the price of that particular cryptocurrency at any given time. When it comes to staking, you have to pick the right coin. It’s not about choosing the most popular coin and hoping for the best. The key is to find a project with a solid team, active development, and real-world use cases.
Things to Look for When Choosing a Coin
The Team Behind the Coin
Do they have experience in blockchain? Look into their track record and research to find out about their experience in blockchain.
The Development Roadmap
A well-defined roadmap tells you how serious the development team is about their project. It also gives you an idea of what to expect in the near future. Make sure that the roadmap is realistic and achievable. You don’t want a team that promises the moon but fails to deliver on their promises.
The Real-World Use Cases
The key to a successful cryptocurrency is adoption. Without it, the project will eventually die. That’s why you need to find a coin with real-world use cases. Something that people can use and benefit from.
Once you’ve found a project that meets all of these requirements, it’s time to do your research and see if the coin is worth staking.
Research The Coin
Do your research and see if the coin you want to stake meets all of these requirements:
- Is it in a healthy position on the market? You don’t want to stake a coin that is amid a bloodbath.
- What are the staking rewards? The higher the rewards, the better. However, make sure that the rewards are sustainable and not too good to be true.
- Is the development team active? You want a team that is constantly working on improving their project. Check out their social media platforms and see how often they post updates.
- What are the real-world use cases? This is one of the most important factors to consider when choosing a coin. Make sure that there is something to use the coin for.
By doing this, you’ll quickly identify whether or not that particular cryptocurrency is worth staking. Let’s take a look at some real-world examples to give you an idea of what I mean by “active community support.” With Bitcoin (BTC), we had Segregated Witness (SegWit). We also got Lightning Network which significantly improved transaction speeds and fees for everyone involved.
Expectations may differ from one person to the next, but they usually boil down to a few key factors. Some expectations may be accurate, while others may be a pipe dream. When it comes to staking, you may:
- Expect the value of your investment to go up over time
- Expect to receive a daily return on your investment
- Expect you can withdraw your funds at any time
- Expect to get rich quick
On the other hand, the reality can be a bit more complicated. To get the most out of staking, you need to be aware of the following:
- Your coins may not always increase in value over time
- You may not receive a daily return on your investment
- You may not be able to withdraw your funds at any time
It’s important to remember that staking is an investment. There are no guarantees when it comes to cryptocurrencies. If you do your research and pick the right coin, you stand a good chance of staking profitably.
How should you choose the best coins to stake?
The key is doing your research before investing money into any cryptocurrency. You want to know exactly what you’re getting yourself into before throwing your hard-earned cash at something else promising big returns but ending up giving you nothing but losses instead (and trust me when I say this happens quite often). If you’re still unsure, it is advisable to start small. Don’t go buying thousands of dollars worth of cryptocurrencies right off the bat because then you might lose more money than you can afford to. So start small and slowly build up your portfolio little by little until it’s the size of a big one.
Some of the best coins to stake include Litecoin (LTC), Ethereum (ETH), Peercoin (PPC), and Dash (DASH). Each of these coins has its unique benefits. It’s therefore crucial that you do your research before investing in any of them. For example, Litecoin is great for everyday transactions, while Ethereum can create smart contracts. Peercoin has low fees, and dash is perfect for online purchases. So as you can see, there’s a little something for everyone when it comes to staking cryptocurrencies. Just make sure you do your homework first.
To conclude, staking can be a great way to make some extra money, but you must not go in blindly. Do your research, pick the right coin, and then sit back and watch the profits roll in.
David is a crypto enthusiast and an expert in personal finance. He has created numerous publications for different platforms. He loves to explore new things, and that’s how he discovered blockchain in the first place.