With Coinbox.org, users can now generate passive income, simply by storing the cryptocurrencies in a special wallet. This new feature offered by Coinbox.org is called “staking.” It can be a great way for hodlers to increase their crypto assets easily and effortlessly.
Staking networks use Proof of Stake as their consensus algorithm. To better understand what it is about, you need to understand this concept.
How does the Proof of Stake work?
Both Proof of Work (PoW) and Proof of Staking share the same goal, which is to achieve consensus on the blockchain. But the processes that allow to achieve this objective in these systems differ from each other.
The blocks of PoS blockchain platforms are ‘forged’ rather than mined. Contrary to the way it works in PoW systems, PoS blockchains can develop and validate new blocks without any special hardware (eg ASIC).
Thanks to PoS protocols, any user who has the minimum required balance (stake) of a specific cryptocurrency can confirm transactions and obtain rewards for it. In PoS systems, those who “watch” the coins are always the owners of the coins. The higher the number of those coins, the greater the chances that a node will be selected as another validator.
However, the blockchain developers who created the PoS algorithm quickly understood that targeting by size of stake would only lead to centralization. This, obviously, would be very undesirable. This is why other selection methods have been added (such as selection based on the age of the coin and selection of random blocks).
Coinbox.org has now introduced staking using ALGO
ALGO is the official native cryptocurrency of the Algorand blockchain. Logically, it is based on the open platform of the PoS Algorand blockchain. Unlike most other public blockchains, this scalable platform boasts of fast transaction processing time while sticking to decentralization.
The advantages of Algorand technology are as follows
Validators are not at risk of being “stabbed” (stabbing is an event in which the validator gives up a defined amount of “staked coins” which are then redistributed to other stakeholders or burned).
It is impossible for the minority and it does not make sense for the majority to cheat the system because it would devalue their possessions.
Annual Percentage Yield (APY) is the interest rate that reflects the total amount of interest, in this case, staking rewards, expected to be earned in one year. Currently, it is 6.12% for ALGO.
For more information, you can visit the official site of Coinbox.org.