What is Staking ?

• Staking is locking up cryptocurrency that you already own in order to earn rewards in a blockchain that uses a Proof-of-Stake (POS) consensus protocol. The protocol then randomly assigns the right to validate the next block and earn the block rewards associated with adding that block to the blockchain to a user who has locked up the required amount of cryptocurrency.

• In simple terms, it’s almost like pledging an asset so that you can be entered into a lucky draw where the winner gets the prize of writing the next ledger entry, or block, to the distributed ledger (called the blockchain), and the fees for doing so. You don’t lose the asset you pledge, regardless of whether you are chosen or not, and the more coins you pledge, the higher your chances of being selected as the lucky winner. Some systems even offer a small reward for staking your cryptocurrency. Staking is NOT used for a cryptocurrency that relies on Proof-of-Work (POW) protocols, the most famous being Bitcoin.