Staking (PoS) Major Advantages

Stable price, low volatility, increasing value and profitability.

In a previous article I wrote a month ago (you may view it here), I briefly discussed the difference between Proof-of-Work (PoW) and Proof-of-Stake (PoS) mining algorithms. In summary:

PoW requires miners or physical computers to process transactions in order to earn coins. This can be inefficient since better computers are created and optimized for mining which may lead to centralization, such as of Bitcoin, by pool miners owning 51% or more of the entire mining population.

PoS is greener and requires less energy to confirm transactions. You just need to lock up your coins to process transactions and earn rewards in form of newly minted coins or transaction fees.

First of all, let’s define “blockchain” for those who are new to this technology. Simply put, a blockchain is like a ledger containing all transaction logs since the beginning of its existence, with the very first block commonly referred to as the “genesis block” which Bitcoin dubbed way back in 2009. The blockchain is an integral part of each cryptocurrency and should be understood as a log which stores all of the transactions performed with the currency.

Now let’s describe the “mining” process. The computing power required to decrypt the hash algorithms, to verify new transaction blocks in the blockchain, and the resulting new coins, is referred to as mining. Mining is a distributed consensus system used to con?rm waiting transactions and add them to the blockchain. This transaction veri?cation, which previously only banks would perform, is carried out for cryptocurrencies by a majority vote of users. The vote is taken using a so-called Proof-of-Work (PoW) or Proof-of-Stake (PoS) procedure.

The advantages of staking your coins for as long as possible

As previously mentioned, one of the key advantages of keeping your coins for a longer period of time in your desktop wallet is that you can increase your in?uence in the system and accumulate more earnings in the form of new issued coins and transaction fees. The more coins you keep and the longer you stake them, the higher your influential factor will become.

The other major advantage of staking your coins in your desktop wallet rather than trading them on exchanges, is that, it will help stabilize the market price and maintain low volatility of our cryptocurrency. As per the law of supply and demand, if the demand is high, the price can go higher too. So if we keep the supply very low when many users stake their coins rather than offer to sell them, the demand will be high, which can cause the price to go up gradually.

So staking is really a very effective method of maintaining high demand and its price stability, while keeping low the volatility of our coin which can help convince merchants and investors to consider Indigen as a safe digital asset if we eliminate potential exchange losses due to price fluctuations.

Another thing I liked about our staking process is the simplicity of participation. Unlike other PoS-based cryptocurrencies that require you to lock your coins for at least 30 days which will render your coin unusable (like time deposit in a bank) during the said period, and require a minimum amount of coins to participate which can cost a participant huge amount of investment, ours is more flexible. Simply transfer your coins at whatever amount to your desktop wallet for you to begin staking. Then in cases when you need to transact your coins, you can use them accordingly without incurring penalties. You may also add more coins anytime to improve your chance of getting rewards.

And since there is no need for you to setup and maintain powerful machines to handle the actual work, you can therefore mine more coins easier in PoS than a PoW process without huge expense.

? Larrimar Tia