Why Is Staking So Popular in 2021?

By Achal Arya
May 21, 2021 Updated May 21, 2021
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Staking cryptocurrencies is a great way to increase your income, but so is mining. Actually, the rewards are bigger if you chose crypto mining. And still, it lost a lot of popularity in the last couple of years.

On the other side, staking became the go-to source for many cryptocurrencies. Student Coin, for example, managed to raise $40 million through the STC token in just 12h after it was launched. Why staking got the spotlight? You will get the answer in this article. 

The impact of social responsibility

Starting with millennials, the concern for Earth’s health increased considerably. Global warming, endangered species, air pollution, everything became too dangerous to turn our back on it.

And thanks to the internet, the news about our current situation spread quickly, with a lot of influencers doing their best to wake the world up. 

So, when crypto mining became a thing, young generations were in a tight spot. It gave them the freedom they wanted for many years, but it came with a lot of electric power consumption. On March 18th, the recorded annual power consumption of the Bitcoin network was over 129 TWh. That’s a lot of electricity. 

Therefore, the launch of the staking option was greeted with a lot of enthusiasm. Staking doesn’t require mining software or cooling systems; just the device you are usually using daily. 

It is basically a “greener” option. And if it comes with lower rewards, so be it. But at least we protect the planet. 

Mining takes a lot of time

Young generations barely have time for themselves due to the unpredictable changes in the market. And to mine cryptocurrencies, you would need constantly check your computer, which needs to be on all the time – or the reward could slip through your fingers. 

Crypto mining uses the Proof-of-Work mechanism, where users have to validate the transactions on the blockchain. To do that, they need a powerful ASIC or GPU mining software that solves cryptographic equations in order to find the right 64-Digit Hexadecimal Number. 

Staking, on the other hand, uses the Proof-of-Stake mechanism, which gives validating power based on the amount of crypto held by the users.

In other words, staking requires just a deposit of your assets. You get daily rewards and you can check your earnings with a simple click. Not to mention most of the wallets that have the staking option are available on mobile. So it’s quicker and a lot more convenient.

Did we answer your question? What are your thoughts regarding staking popularity? Tell us in the comments! 

Achal is an entrepreneur and a product designer with a bachelors degree in Computer Science. He works in the Web3 domain and manages new developments at Coingape. Follow him on Twitter at @arya_achal or reach him at achal[at]coingape.com.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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