Staking Pools — How They Work
BTC, the first generation of cryptocurrency, brought the necessary change in our world. It is the first decentralized blockchain product. However, it failed to solve the energy consumption issue or consider the impact they will make on the environment because they required Proof of Work (POW).
With the cryptocurrency world growing, it is now common to see Proof of Stake(POS) coins. They don’t require energy consumption to verify transaction. On top of that, you can make a lot of profit by staking the POS coins.
Have you ever wondered what you stake coins in pools to have better gains? Well, you can, and that’s why in this article, we will focus on Staking Pools. Staking Pools are focused on making the most out of the staking process. It works similar to Pooling mines that are available for POW coins.
Staking Pools — How they work
Staking Pools are focused on making the most out of the combined staking capacity. Generally, the bigger the staking pool, the more chances are there that the staking pool will be picked and verify a block.
Let’s take an example.
Person A: He is a staking wallet with 1000 ADA coins. He doesn’t want to stake his coins and just want to do it solo. Now, when a block needs to be mined, the blockchain tries to find the most suited staking wallet to do it. In this case, there are slim chances that Person A wallet will be chosen to validate the block.
Person B: Person B understand staking pool. He takes part in the staking pool by contributing the number of his coins into it. As the staking pool value is way higher compared to other wallets/pool, there are high chances that it will be rewarded for resolving a pool. For example, the pool has more than 1 million ADA. This makes the pool at higher chances of being chosen for block verification.
By taking part in staking pool, Person B has a higher chance of earning more profit. The reward is divided among the pool participant. The pool service might take some percentage of the reward as service charges.
Should you go for a Staking Pool?
Well, it entirely depends on your requirement. If you already have a good number of staking coins in your wallet, then it might not be a good idea to take participation in a staking pool. However, if you have a low number of coins, then staking is your best bet to gain more profits.
Where to join staking pools?
Staking pools are coin specific, and that’s why there is not a one staking pool where you can put your coin. First, you need to confirm that you have a POS coin. Once done, you need to check their forum or guides related to that coin.
You can also try out StakeUnited.com which offers to stake for popular staking coins such as XP, Dash, and others.
FundYourselfNow is also offering Staking Program where all the FYN holders can enjoy 15% or more staking bonus every quarter end.
You can also read our guide on how to make money through staking which also lists the best staking coins out there. Also, don’t forget to comment on what do you think about staking pools. We are listening.
Staking Series (5 part series — PART 1): Earning Crypto without a Powerful Mining Rig