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Ethereum is one of the most popular cryptocurrencies on the market. Since it first launched in 2015, its valuation has grown massively, making it second only to Bitcoin.
You can check the price of Ethereum today with a calculator, showing you any amount you want converted into dollars. For example, 0.07 ETH to USD.
Recently, the Ethereum network switched from proof of work to proof of stake, meaning it’s now far more sustainable as it uses a lot less energy. It also means it’s possible to stake Ethereum and earn real rewards passively. In this article, we’ll look at what staking is and how to do it, so you can generate more ETH without doing a thing.
What is Staking Anyway?
Staking is the process of locking up your crypto and earning rewards for it. Ethereum isn’t the first coin to offer staking, but it is one of the biggest and most important cryptocurrency networks to use proof of stake.
Previously, the Ethereum blockchain used computational consensus to add blocks to the chain and process transactions. Miners solve cryptographic puzzles in order to validate transactions and earn rewards for doing so. This is known as proof of work, and it’s how other chains, such as Bitcoin, work.
In 2022, Ethereum made the long-awaited switch to proof of stake, creating a new age for the Ethereum network. Instead of the chain being validated by a process of mining, it’s validated by nodes that stake Ethereum. Each node must stake a set amount of Ethereum, and by validating transactions and adding blocks correctly, they’ll earn rewards.
The process of proof of stake works well because those who stake ETH have a vested interest in doing the job correctly. Failing to validate accurately can result in having the ETH destroyed. In addition, little hardware is required, and the energy usage is extremely low.
How to Stake Ethereum
There are a number of different ways to stake Ethereum, all of which will earn varying levels of rewards. The first is the simplest, in that you can stake the full amount of ETH required to run a node. However, this requires a significant initial investment and a level of capital that most people won’t be able to afford. It also puts a lot of responsibility on the person operating the node and the hardware needed.
Failing to understand the staking process could result in the loss of funds, which is why solo staking isn’t advised for most people. The node you run will need to be online constantly, and the larger your stake, the more chance you have of earning a reward.
The other option for staking Ethereum is to use a staking pool. This is where you provide your ETH with others as part of a pool of people. A third-party service provider then runs the node on your behalf, ensuring you don’t have to worry about it. The advantage is that there’s less complication, and you don’t need as much capital to get started.
You can still earn rewards for being part of a staking pool, although they’ll be shared between people. The downside of this is that you give up your Eth to a third-party. This is often offered by wallets and crypto exchanges, which are generally trustworthy. However, there’s still the fact that you won’t really own your crypto unless it’s in your private wallet.
It’s worth noting that however you choose to stake, your Ethereum will be locked up for the entire period. That means you won’t be able to move it or sell it until the staking contract is complete. This decreases your liquidity.
