'Staking, a gonzo guide', by Ultan Banan. Ruminations on the technological.
Staking, a gonzo guide
Welcome back to gonzo crypto. Be warned: this is the idiot’s guide to all things blockchain, and if you are at all familiar with crypto, this will be of zero use to you. But, if you are as slack as me and still getting your toes wet, then you may find something of benefit in here. Let’s go.
Very simply, ‘staking’ is the process of submitting your tokens to be locked into a cryptocurrency wallet for a period of time in order the earn rewards. So what kind of rewards for the coin holder are we talking here? Well, perhaps when you were wee, your ma or da opened an account with the building society for you and put a hundred quid in it. And do you remember being taken down there every couple of months with your bank book, and the lady behind the desk taking it off you and printing your interest in it? I do. She handed it back and you had a look inside, and wa-hey!… a free five quid out of nowhere had just appeared in your account. Ah, the days. Long gone the bank book. Also, who’s making interest on their savings now!? Forget it.
Staking is a bit like that. You lodge your crypto in an account and don’t touch it for a while, and when you come back, you got some free money waiting for you. They even call it ‘APR’, an acronym which you may remember from those glory days in the building society, one which now does little more than recall that warm feeling of nostalgia.
So, let’s get technical. Where can you stake? Many, if not most, wallets offer staking as standard. So that I don’t err in my advice, I’ll stick to those I’m familiar with. I’m currently staking in three places. Firstly, I got a handful of ATOM staked through my Kraken account. Kraken is an exchange. What most cryptoheads will warn you about exchanges is that, while they are a good place to buy and sell coins, the cryptographic keys that protect the security of the coins in your account are theirs and not yours, so ultimately, it is still technically their money. Until your coins are offsite and in a private wallet, your money is not entirely safe. Remember Mt. Gox? The Japanese crypto exchange that collapsed (or was rug-pulled?) and billions disappeared? Theoretically, it can happen to any exchange. I’ve been with Kraken since 2016 and never had a problem, but I’ve recently started spreading my coins across various private wallets, the keys of which are held by me and me alone. So, back to the ATOM. I’ve a few coins staked in there at a return of 7 per cent APR, which is pretty slow, but it still brings in a little coin with zero effort on my part. I’m also staking my ADA holdings in a Daedalus wallet. Daedalus is built on the Cardano ecosystem, and the wallet downloads the entire Cardano blockchain and verifies every transaction that takes place on it, which means that, security wise, it’s second to none. Daedalus is available only for PC and not for Android. Finally, I’m staking what Harmony ONE I own in a Blits wallet. Harmony is an ecosystem built on the Ethereum blockchain, and is a system which is showing great promise. (I wrote a few articles a week or two ago detailing how Harmony can be used to mint and sell NFTs for artists.)
Those are three platforms on which I’m currently staking. What does it involve? It goes like this: you nominate a staking pool, which is basically a wallet held by a group of people who are pooling their resources in order to be able to validate the blockchain. Your crypto will go into this shared wallet for the length of time that you nominate, and when the returns come back in the form of shared ‘interest’ (APR), you get a slice of the pie (wa-hey!).
It’s that simple. Staking is done from a minimum of a week to ten days up to a year, or even five. Naturally, the longer the better.
So there you are. If you’ve read this article, well done. You have been inducted into the ways of gonzo crypto. Sit back and watch the pennies roll in.
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‘Staking, a gonzo guide’, by Ultan Banan. Please note: flash fiction, nonfiction and all other content is the sole work of Black Tarn. Ask before republishing.