How to Stake Cardano

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Staking has become a new cryptocurrency dream. It enables you to take part in blockchain networks, but without pricey rigs and high electricity costs. Besides, it is environmentally friendly, as it doesn’t consume enormous amounts of electricity during the process. As such, it’s possibly the simplest way to generate passive income while requiring you to do absolutely nothing.

Staking is extremely straightforward and easy to understand. It is a process during which cryptocurrency holders deposit their crypto tokens in order to be active participants in running the blockchain network. This way, they become validators, aka stakers, whose duty is to validate new data added to a blockchain network.

However, stakers don’t perform this duty without a reward. For this reason, staking is an excellent way of earning yield on your crypto holdings. Even though they are randomly chosen to participate in the blockchain, not everyone will be accepted. The selection criterion is fairly straightforward — the more tokens you have to lock away, the higher the chance of being selected is.

As mentioned above, staking supports, and secures the stability of blockchain networks, just like mining. However, as opposed to mining, which uses a proof-of-work (PoW) consensus mechanism to validate transactions on the blockchain, staking employs a proof-of-stake (PoS) mechanism. This is the system used by blockchain to make sure that the participants' conduct on the network will be in its best interest.

Since there is no central authority that will monitor who obeys the rules, anyone can take part in the blockchain network. Consensus mechanisms such as