For as long as time has been recorded, traditionalism and modernism were always in some kind of competition. There will always be people who remain loyal to the origins and people who live to explore as much as possible. We can see that in fields like art, education, or management.
And crypto is no exception.
Today we will focus on the most controversial subject in this area – mining or staking? Which is the most efficient way of earning crypto and sustaining the network at the same time?
But before jumping into the evaluation, let’s be sure we understand what each of them means.
What is Crypto Mining?
To put it simply, crypto mining is the process of solving intricate mathematical equations in order to validate transactions between users and adding them to the blockchain ledger. After that, miners get rewarded in crypto.
It originates with the arrival of Bitcoin, which implemented the Proof-of-Work consensus algorithm. Knowing the fact that the crypto industry wouldn’t exist without the white paper of Satoshi Nakamoto, it is not surprising why there are people who prefer to stick with mining.
Crypto mining is not an easy task though.
You need specialized and powerful gear, which will require a lot of computational power. And mining comes with a lot of responsibility too, as miners have to secure the network and to process each crypto transaction.
But if you are confident in your computer power and you love to use your grey cells, then nobody should stop you. It can be your ticket to the rich land.
And if you want to start with the right foot, keep an eye on the best coins to mine: BITCOIN, MONERO, and ZCOIN.
What is Crypto Staking?
Crypto Staking is a substitute for mining coins, a solution for the consumption of electric power needed to maintain the blockchain network. And the best part, there’s no need for miners to confirm transactions.
The difference is that there are forges who lock their coins and tokens in order to get the rewards. Crypto staking is sustained by the Proof of Stake protocol, that randomly makes the forges suitable to create new blocks. The bigger the amount locked, the bigger the chances to get the role.
There are two types of staking – hot and cold staking. The first one is done online, and the second one is mostly offline. We recommend cold staking, for a plus of safety.
Crypto staking proved to be way more popular among crypto users, therefore there’s a lot of coins to choose from. According to Coinzilla Academy, some of the best coins to stake are EOS, CARDANO, TEZOS, NEO, and COSMOS.
PROs and CONs – Crypto Mining
If crypto mining were outdated, then it would have disappeared a long time ago. Yet, it’s still here, so it definitely has some advantages. Let’s take a peek at some of them:
- You can increase your income considerably – The value of 1 BTC is $17,300 at the time of writing. Starting with May 2020, the reward for a new block generated is 6.25 BTC, the value being distributed between contributors according to the network difficulty.
- It’s secure – The more computer power is added to the network, the more difficult it is for bad actors to appear. In order to add a malicious block, the mischievous guy should have a computer more powerful than 51% of the network – which is really not worth it.
However, all good things came with a price, and crypto mining has its own set of disadvantages.
- It’s expensive to work with – Until you can start mining cryptocurrencies, you need to invest in mining software, a GPU or ASIC, cooling equipment, and the electric bill isn’t friendly either.
- You contribute to global pollution – by using a lot of electrical power in order to compete with other crypto miners.
- It’s difficult – in order to validate a transaction, your computer needs to solve a complex cryptographic puzzle, in order to find the right 64-digit hexadecimal code.
PROs and CONs – Crypto Staking
As we said before, crypto staking became way more popular than mining, and people have their own reasons. Here are some of its advantages.
- It’s effortless – All you need to do is stake an amount of your income, and you will get rewards. Nothing more.
- It’s secure – The rule of 51% still applies, but this time with the total amount of coins, not computers.
- It’s cheap – You don’t need computational power in order to join. Just a crypto wallet, which usually has very low fees.
- It gives you daily rewards – Until you withdraw your money.
- You don’t need to check it daily – The rewards are being accumulated anyway.
- It’s environmentally friendly – Being a solution to the electrical power consumed with mining.
Although crypto staking covers each disadvantage of crypto mining, it is also worth noting that you should not expect a high-interest rate. You can get up to 2% of your investment in a year, which is really low compared to mining.
We don’t have one.
Whether crypto staking is better than mining or not, the decision is all yours. If you are adventurous, you love challenges, and you strive for a big success, then mining it is.
If, on the contrary, you just want some source of additional income or you feel a connection between you and the Earth, then the crown is for staking.
So. What would you choose? Tell us in the comments!