What does staking mean in mining?

The primary benefit of staking is that you earn more crypto, and interest rates can be very generous. In some cases, you can earn more than 10% or 20% per year. It’s potentially a very profitable way to invest your money. And, the only thing you need is crypto that uses the proof-of-stake model.

The staking method requires cryptocurrency holders to ‘stake’ their coins . Users have to lock their coins on the blockchain network for a fixed period where they cannot withdraw them, making them illiquid.

Ethereum is moving to Proof of Stake completely by December 2021, which means ETH proof of work mining will become obsolete . Currently, you can either stake ETH to earn more of it instead of mining with a GPU, which uses more energy.

There are two major consensus mechanisms used by most cryptocurrencies today. Proof of work is the older of the two, used by Bitcoin, Ethereum 1.0, and many others. The newer consensus mechanism is called proof of stake, and it powers Ethereum 2.0, Cardano, Tezos and other (generally newer) cryptocurrencies .