"Staking Of Cryptocurrencies And Their Advantages & Disadvantages"

Assalam O Alaikum

Hello dear friends! Well come to my post. How are you all? I hope you will be doing well by the grace of Almighty Allah. I'm also fine and enjoying my day. Today I'm here to share my knowledge with you about the topic "Staking Of Cryptocurrencies And Their Advantages" in this Steem Alliance community. So let's start without any more delay of time.

---

Created with Canva

---

What is the Staking Of Cryptocurrencies?

Friends in the world of digital currencies, staking is a process in which we hold and stake our digital assets and in return we get reward. This reward is in the form of digital tokens and by selling these tokens we can earn money. Overall the staking contains advantage and disadvantage but according to me it is highly effective because it provides us a very easy way to earn money through the different crypto currencies.

The staking can be done in different platforms using Blockchain technology and decentralized network system. In this process we don't sale or trade our digital tokens infact they remain in our wallets and in return we earn free reward from their staking. The staking is done through the proof of stake mechanism and through this different crypto currencies offers staking and they have a specific percentage of rewards and time period as well.

---

Freepik

---

Not every crypto currency offer staking but in the digital world crypto currencies a bundle of crypto currencies offers staking. So when we hold and stake your digital assets UpTo a specific period of time then after that the rewards of your participation automatically adds in your wallet right according to the fixed ratio of rewards. That ratio may be different and it all depends upon the amount of tokens which you want to stake.

The staking is very popular as one of the largest digital network Ethereum offers. We can say that the staking is very rewarding but on the other hand it contains risks. Being a beginner in the digital world or a stake holder you can face a lot of challenges as well due to having less experience and knowledge. But anyways let's have a look at some advantages and drawbacks of staking.

Advantages of staking

---

Freepik

---

• Through staking we can earn rewards by holding our assets in our digital wallets by taking a part in the network's growth. Thus the staking is a part of passive income.

• Staking allow us to hold our digital assets UpTo to a long time and when the market trends goes up i.e the prices of that tokens increase thus you can earn a huge money by selling your assets.

• Also through staking we contribute to the security and integrity of network which increase the efficiency, transparency and reliability of digital Blockchain based and decentralized networks.

• The staking provides is a stable way of earnings because our assets remain safe and there is no chances to lose all your assets as like in trading.

Disadvantages of staking

• The staking can reduce the liquidity of your assets because during staking they are locked thus during that period their liquidity can be limited.

• Your assets can lose their value during the volatility of crypto market. Because your assets also have to follow the trends of market.

• During the pump conditions of crypto market you remain unable to earn a huge earnings by selling your assets at higher prices they are locked during staking.

• The staking can also Lead towards crypto inflation because during staking a huge number of people gets staking rewards which increase inflation.

Conclusion

Friends in conclusion, the staking is a very useful process which can provide us a passive income and if you want earn more then increase the amount of your staking amount. In this way the staking can be a very useful method of earnings as you just have to stake your assets and earn rewards in return. But before diving in the world of digital currencies and staking take a brief knowledge learn risk tolerance, goals and technical capabilities so that you can do done useful decisions on the basis of market trends.

---

Written by @abdullahw2

---

---

Thanks All 💗

---