With Coinbox.org, users can now generate passive income, simply by keeping 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.
Skate networks use Proof of Stake as their consensus algorithm. To better understand what it is all about, you need to master this concept.
Both Proof of Work (PoW) and Proof of Stake (PoS) 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 on PoS blockchain platforms are "counterfeit" rather than mined. Unlike the way it works in PoW systems, the blockchains of PoS networks can develop and validate new blocks without special hardware (eg ASIC). Thanks to the Proof of Stake protocols, any user who is in possession of the required minimum balance (stake) of a specific cryptocurrency can confirm transactions and earn rewards for participation. In PoS systems, those who "guard" the coins always own the coins, and the greater the quantity 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 selection just by stake size would result in centralization, which would obviously be highly undesirable. That is why other selection methods have been added (such as the selection based on the age of the coin and the selection of random blocks).
Coinbox.org has now introduced staking for ALGO
ALGO is the official native cryptocurrency of the Algorand blockchain network. Logically, it is based on the open PoS Algorand blockchain platform. Unlike most other public blockchains, this scalable platform boasts fast transaction processing time while sticking to decentralization.
The advantages of Algorand technology are as follows:
- Validators do not risk being hacked (drawdown is an event where 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 properties.
The Annual Percentage Yield (APY) is the interest rate that reflects the total amount of interest, in this case, gambling rewards, that are expected to be earned in one year. Currently, it is 6.12% for ALGO.