Block-chain consensus protocols determine how each block chain is verified, and how coins are ultimately created and get their initial value. Common protocols are Proof of Work (P.O.W.), Proof of Burn (P.O.B.) and Proof of activity or importance (P.O.A). All of these protocols have their advantage and disadvantages however; Proof of Stake (P.O.S.) is the one that rewards you for holding (hodl).
Proof of Stake is a simple concept where one holds or stakes coins (holds in a wallet) in order for a chance to define the next valid block in the chain. In return, you receive the fees (coins) for doing so. Your chance of receiving the reward is dependent on each individual coin, but typically revolves around random chance, the amount of coins you have staked, and the amount of time you have staked them. Almost all P.O.S. coins have their own way of determining rewards so it is imperative you research each to determine what makes the most sense for you. These coins allow an individual to create passive income, in many instances placing your coins in your wallet and activating the staking mechanism. Most coins require a certain amount of time to pass until all of your coins become vested and you can receive the full benefit of staking.
These P.O.S. coins are a great way to earn some passive income. Usually somewhere between 1.5% -5% of your wallet’s worth respectively. In the current crypto world, this does not seem like much, after all coins can pump for 5X on a relative basis. However, it is these types of pumps where these investments really shine. Not only do you get the benefit of potential coin increases, but you have also received coins while waiting for the rally to occur. In most cases, staking only really adds value once the value of the coins increases. After all receiving a few coins every week worth .01 or less is not going to make anyone rich, though as the prices of the coins increase so does the value of the rewards.
These coins help the investor because they discourage panic selling and encourage you to hold (HODL) while at the same time adding increased value to your wallet. They allow investors to take more of a hands off approach and can really benefit those people who like to let their money work for them. For someone like myself these coins help provide a healthy reserve, and necessary diversification across various consensus protocols limiting my risk exposure.
A word to the wise, cryptocurrencies can experience extreme volatility, which can be exacerbated by a small market cap. That means they can be pumped and dumped, and like all coins potentially loose most or all of their value. I am providing a few coins that those in my trading community tend to like and invest in, however please do your own research and only invest what you can afford to lose.
If you would like to discuss any all crypto-curriences with myself and other like minded investors feel free to join us as we Get Rich or Die Trying (GRODTC) on slack by emailing us: [email protected]
Please note not all of these coins consider themselves P.O.S. but do provide an incentive for staking/locking coins in your wallet
PIVX- https://pivx.org
Hyperstake- https://bitcointalk.org/index.php?topic=678849.0
Crown- http://crown.tech/
Waves- https://wavesplatform.com/
Ark- https://ark.io/
Mint- http://www.mintcoinofficial.com/
Hyper- https://bitcointalk.org/index.php?topic=1872569
NEM- https://www.nem.io/
Great article on PoS, I love these coins. Help run the network and earn a little. I stake PIVX, Hyperstake, Mint, and lease some waves and ARK. Thanks for the info!
thanks for the reply, feel free to share any others you like with us and I will be happy to research and report
Nice! I've staked PIVX and leased WAVES before but i didn't know about all the rest. Looks like you can even run a Hyperstake staking wallet on a Raspberry Pi, just set and forget that bad boy and let the Hyperstake roll in. I love anything I can stick on a Pi.
I love anything that can make me money while I sit at home.
I bought cheap coins like Dogecoin. I would hope Digibyte becomes a coin for video games soon. I hope they get bigger over time. I see the cheaper coins as a long-term investment and they may be big like Bitcoin is now but in maybe ten or more years.
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POS is a good incentive for holding those kinds of coins.
the only way to make any money in cheap coins is to research, hold, and hope. You only have to be right once
agreed
Thanks for the information. That was enlightening. So if I want to stake my NEM (XEM) coins, how do I go about doing it?
first you need 10,00 fully vested coins which can take awhile. I recommend watching this youtube video it helped me. Pretty simple once you learn to navigate the wallet
Thanks!
Thanks for sharing. It helps
let me know if you have any questions or are interested in joining GRODTC slack. We have lots of individuals who specialize in P.O.S. thats where I started my research
Very very good article.
Thanks a lot.