NavCoin Cold Staking Guide
Summary of Proof of Stake and Cold Staking
Proof of Stake (POS) is the process for a supported wallet (NavCoin Core or NEXT) to validate transactions in a distributed consensus through creating new blocks on the blockchain. Staking will annually payout approximately 4% to your wallet and 1% to the Community Fund. This is an alternative method to the more widely known and energy-intensive process Proof of Work (POW) which is used by Bitcoin. For more information on general staking, click here.
Ever since December 21th, 2018 you are no longer required to have all your coins connected on your Hot Wallet to consistently stake. This allows you to participate in staking the network while also keeping your coins offline for added protection.
Why Cold Stake?
Staking through your Hot Wallet allows only a single point of failure to being compromised. By connecting just your Cold Wallet you effectively delegate the staking process to another wallet that cannot transfer your funds. While a compromised Hot Wallet will put your funds at immediate risk, a compromised Cold Wallet can disrupt your staking process but puts your initial NAV at no immediate risk.
In the future when there is hardware wallet support (Ledger Nano), you can cold stake NAV while keeping your funds safely in your hardware wallets.
- NavCoin client (NavCoin Core or NEXT)
- A Wallet with NavCoins (backed up)
- Two NavCoin Addresses (Staking and Spending Address)
Process (If you only own one device)
Open your supported NavCoin wallet where you have all your NavCoins and go to Receive tab. (Below I provided screenshots from both NavCoin Core and NEXT)
2. Click Copy To Clipboard and save your address somewhere, this is your Spending Address
3. Next you will locate you wallet.dat in your data folder and back it up. If you are unsure where to find your data folder here official NavCoin Knowledge Base guide. Rename it to something you will remember. I suggest wallet_spending.dat
Warning: Please backup your wallet.dat somewhere else in the event you will need to regain access to you spending wallet. NavCoin will only recognize wallet.dat
4. Afterward renaming your wallet, restart your NavCoin wallet. After a few minutes NavCoin Core/NEXT will regenerate a new wallet.dat
5. Once NavCoin restarts you should expect your balances to be zero. This is because all your NavCoins is stored within wallet_spending.dat.
6. Go to Receive and copy your second NavCoin address. This is your Staking Address.
In my example I have the following two addresses ready:
Spending Address: NNXULhuZGkXfHoTpzXNvKkk9mTmBG1v7Ha
Staking Address: NNnJrnDiNQmpw3oqCUKtzAgNPqtMys6ve5
7. Click on Create A Cold Staking Address and follow the Set-Up Wizard.
8. If you set everything up right, you should now have a Generated Address
9. After you are done, return to your data folder and rename your newly created wallet.dat to wallet_staking.dat
I highly suggest keeping a copy of both backup wallets safe somewhere else in case you mix them up. Hopefully in the future the process will be much simpler.
10. Finally, make a copy of wallet_spending.dat and call it wallet.dat, next time you start your NavCoin Core/NEXT you will be able to see your NAV balance again.
Send the NAV you want to Cold Stake to your Generated Address
11. You’re done! To see your cold staking balance, close NavCoin Core/NEXT and switch your wallet_staking.dat as the wallet.dat
I hope you enjoyed this guide, I’ve been following NAV since early 2017 and am very excited to finally see Cold Staking.
If you found my guide useful and would like to donate for the price of a coffee (or two ;]) please send it to my alias firstname.lastname@example.org