Steemit Crypto Academy Contest / S8W6 - STEEM Staking

Hi, This is Asad Fazal from Pakistan. I hope everyone here is fine and enjoying their life to full. Today I'm here to take part in the Season 8 Week 6 contest held in SteemitCryptoAcademy. The topic decided by the team is STEEM Staking. I will share my complete knowledge of this topic and how Steem Staking can be done. So let's start!

There are many ways that let us earn passive income from cryptocurrency and staking is one of them. In simple words, cryptocurrency staking is like freezing your cryptocurrency holding and earn a passive income every day until you unlock your coins. There are different types of it that includes either a user lock his coins for specific period or he can lock them until he likes to unlock them. Another type is by simply holding cryptocurrency in your wallet either exchange or digital wallets.

The staking process on blockchain operates on proof-of-stake consensus. While staking your holdings, you are actually securing the network and validating the transactions. By doing this, the small amount of fees or newly generated tokens are being distributed to the staking accounts.

In order to stake in a specific coin network, there are some rules to follow. One must have required amount of that token in order to start staking his tokens. After you stake your coins, you are helping the network to validate transactions and avoid fake transactions thus securing the network and in return earning the rewards either in that token or new token form.

Let's learn about it by taking real world example. Let's say you have put your money in bank saving account and the bank said you can't withdraw this money till 6 months or 1 year. After the agreement, the bank will invest your money in business or lend it to someone and in return bank earns profit. From that profit they will give you some percentage like 10-15%.

The staking process can only be done on the proof-of-stake blockchain because it uses PoS consensus mechanism. If you have such token then you are eligible to stake your holdings. The staking blockchain pick some trustworthy validators holding required amount of token to validate transactions and add new blocks in the network.

The validators validate the blocks and transactions and in return they earn passive income in the form of fees or reward. The algorithm of PoS selects a block and give it to the validator to validate it. The validator will review it and check legitimacy of the transaction. If the transaction is perfect and there is no issue then he adds that block to the ledger and in return gets transaction fees and small reward of that block.

If a validator is trying to scam by adding wrong blocks on the network so that he earns more reward, the algorithm will penalize his staked holdings. PoS is much more better than mining and PoW because it is super energy efficiency and low barriers for entry plus more scalability.

Yes Steemit ecosystem offers staking of STEEM token but it doesn't work if you hold STEEM token in your wallet. We have to convert our STEEM into SteemPower (SP) in order to stake it. The process of converting STEEM to SP is called "PowerUp". Let me show you how does steem staking works. I have currently 5 Steem that I will convert to SP and stake them. Scroll down and follow the steps:

Step 1

If you have Steem in your Steemit wallet then it's good but if don't have, you need to purchase Steem from exchanges like Binance, poloniex, coinbase etc. I prefer Binance because it is my favorite exchange till now.

Step 2

After you purchase Steem send them to your Steemit wallet address that will your username on Steemit. You have to put username on exchange withdrawal options and your amount will be sent to your Steemit wallet.

Step 3

Now when you get your Steem in Steemit wallet, click on Steem and a dropdown will show from where you need to click on PowerUp as shown in the screenshot below.

Step 4

After that A box will appear that will ask you how much Steem you want to convert to SteemPower (SP). Put the amount in the field and click PowerUp button. I will add 5.249 Steem in the field.

Step 5

After you click on Powerup button, it will confirm you one more time that you are doing Powerup of this much Steem. If you agree click on Ok button. After that you will be asked to put your Active key or Owner key in order to process the transaction. Put your Active Key there and click on Sign In button.

Everything is done now and you don't need to manually stake your SteemPower because when we convert STEEM to SP then it gets locked for 1 month and staked. If we want to unstake the SP and convert back to STEEM, we need to wait for 4 transactions to complete. Each transaction takes 1 week and in total 1 month for all SP converted back to STEEM. Below you can see my SP increased because I convert STEEM to SP.

Staking on Steemit wallet or exchange wallet, both are good to go with. But I prefer Steemit wallet because everything is in one place and there are numerous benefits of staking Steem on Steemit platform. The exchange will only give you reward that is few percentage but Steemit you get much more benefits. Let's discuss those benefits.

1. APR

The first thing that attracts me is APR that is 2.89% and sometimes it goes to 2.94% or more depending on market situation. It let me earn passive income on my SP everyday until I withdraw the SP to Steem. Currently I have 2022.640SP and every day as per 2.89% APR, I will get 0.160Steem and yearly 58.454Steem just by staking my STEEM tokens. So it is a best option to do for me.

2. Reputation

The higher the reputation the more you will be noticed and if you have good SP you will have high reputation. The reason is many by getting support in the form of upvotes from highly reputated accounts and your repu also increase. The ranking on platform increase if you have good SP and thus will get noticed by many users on the platform.

3. More Influence

With higher SP, you will have more influence on the platform. It let you help others and support them by doing upvotes and comments. If you upvote, you will also get curation rewards and it will increase your rewards. So the higher the SP the more influence you have on the platform.

4. Curation Reward

The more your SP is, the more weight of your upvote will be. If you upvote a post you will get reward for it and if you have higher SP then you will get more rewards. Like currently I have 2022 SP, if I upvote with 100% weight, I will get between 0.015 to 0.021SP and I can do 10 upvotes in a day to stay up to 80% voting power. You can see how it benefits you.

5. Secure the Network

By staking your STEEM on Steemit platform, you are not only getting rewards but are helping in securing the network. We all users want Steemit to stay active so we have to support to network and I personally has started 100% powerup instead of 5050% because I want to secure and support the network just like Steemit team supports me.

6. Delegation

This last option is also good but it is not recommended one. On Steemit, you can delegate your SP to bot accounts who will return you Steem or SP daily but will keep TRX reward. It is not liked by the Steemit team and I also disagree with it because we are making these bot users strong by increasing their influence on the platform. We can also delegate to good communities and they will not give you reward but you will only support them and I think it is good option.

These are the benefits I have seen and personally experienced on Steemit platform by staking my STEEM. On Exchange wallets, I will not get these benefits so I prefer staking STEEM token on Steemit platform.

Yes from past 1 and a half month I am only focusing on building up my Steem Power because I know the benefits of it. In February mid, I had 1400+ SP but now I have 2022SP just after 1 and a half month. I am continuously building my Steem Power balance and not withdrawing any STEEM but just TRX to cover my expenses.

I have set my targets till December 2023 and currently I am a little behind them because of not getting proper support don't know why. I am focusing on quality content but I think there might be a mistake I am doing thats why not getting proper support. But I will continue my journey till death on Steemit.

Currently I am part of club5050 but I am doing 100% powerup. I can't join club100 right now because I withdraw some Steem 2 months before and to join club100 we need to powerup 3 months. My target of 2,000 Steem is already achieved but now I am focusing on 5,000 Steem which I need to achieve within 3 months maximum. I am working on it and will buy some Steem if needed.

I think I have good SP to support other users now and I have seen since I got 1500 SP, users are interacting with me. The reason for it is now I am getting noticed more in the communities.

Furthermore, I have learned the importance of engagement not only upvotes but comments and replies. It is very important. As I said above, since 1500SP and engaging with other users, I am now being noticed by other users. It is a good think and I recommend everyone to please focus on engagement as it will help your posts get noticed by many users.

This is all from me for the "Steemit Crypto Academy Contest / S8W6 - STEEM Staking". I invite @samminator, @malikusman1, @steemdoctor1, @simonnwigwe, @preye2, @lavanyalakshman, and @theentertainer to participate in this contest.