The cryptocurrency landscape is a rapidly evolving space where you can earn money in different ways. Many individuals have been attracted to the cryptocurrency space due to its ability to offer lucrative money offers. One of the most lucrative ways to earn money with crypto is staking. Since Ethereum is one of the most legitimate and valuable digital currencies, many people are curious to know how to earn money using this cryptocurrency.
The best way to earn money using Ethereum is to stake it. Ethereum staking is gaining popularity as an option for earning passive income while supporting the Ethereum blockchain. Staking Ether (ETH), the native token of Ethereum, allows you to earn money without the risks of trading or investing in speculative tokens.
This article will delve into the staking process of Ether (ETH), why it is valuable, and the 7 steps to earn money by staking Ether.
Why Stake Ethereum?
Ethereum’s proof-of-stake blockchain mechanism, allows users to start staking to protect the network and earn money. Ethereum staking refers to the locking of some cryptocurrency in a smart contract and providing your services to the network as a validator. Validators who have 32 Ether (ETH) will be randomly chosen by the network to validate all the transactions and add new blocks to the blockchain. As compensation for their effort, they will be rewarded with freshly minted ETH. It helps long-term holders earn additional passive income similar to earning interest on your funds.
Ethereum staking secures the network, as more individuals participate in the validating process, the more secure and harder it becomes to attack.
How to Stake Ethereum? 7 Steps to Get Started
To start staking Ethereum, the first step is to decide how much Ether you want to stake. To activate validator software, you typically need to invest 34 ETH. As a validator, you will have to store data, process every transaction, and add new blocks to the blockchain. The more Ethereum you put in, the more rewards you will get. However, staking involves various risks. Once you have decided, let’s look at the process.
1. Set Up a Network Wallet
To begin staking Ether, the first thing you need is a network wallet. Plenty of network wallets are available to stake Ethereum, such as MyEtherWallet, MetaMask, or Trust Wallet. Choose the one you want and transfer your Ethereum to the network wallet to begin staking. Ensure the network wallet supports staking.
2. Add Ethereum to Your Wallet
After creating your wallet account, you have to transfer some funds and decide how much you would like to stake. If you have enough ETH, you can send it or buy the required amount of ETH and transfer it to your wallet.
3. Choose a Staking Pool
You can stake your Ether in 2 ways: individually or by joining a staking pool. A staking pool is considered more profitable than individual staking. It allows you to pool resources with other investors and maximize your chances of earning rewards.
4. Check Staking Options
Once you have completed the above steps, the next step is to find the ‘staking’ option in your wallet and check for the available options. This is why you have to choose a reliable platform with robust security measures because they will offer you attractive rewards. After deciding on the platform, click on the ‘Stale’ button and follow the instructions provided.
5. Verify Your Wallet
Once you have selected the staking pool that you want to join, you will have to verify your wallet and the amount of Ether you will be contributing to the pool. A minimum deposit amount is frequently required, and it varies based on the stake pool. After verifying your wallet, your contributions will be added to the pool, and you will be able to earn rewards based on the total pool contributions.
6. Set the Duration
You can decide how long you would like to leave your stake active. Generally speaking, the longer you stake, the more you will eventually win. However, there are certain risks associated with this. Once you click the ‘Confirm’ button, your stake will be activated.
7. Start Earning Rewards
The rewards you will be earning from the Ethereum staking process are known as the staking reward. Your rewards will vary depending on the amount of Ether you have staked, the duration of staking, and the staking pool you have joined. When you receive rewards, they will be credited to your network wallet in Ethereum. You will also have the option to re-stake your rewards to earn more or withdraw them directly to your bank account.
Risks or Ethereum Staking
There are many risks associated with Ethereum staking. The main risk is the chance of losing your investment if the Ethereum network gets hacked or faces a severe problem. Another risk is regulatory compliance, as Ethereum staking may have tax implications in certain countries. Additionally, if you stake Ethereum individually, there is the possibility that your node fails to validate transactions, leading to a penalty.
Conclusion
As we discussed, Ethereum staking is one of the greatest ways to earn money, without the risk of trading and investing. However, there are certain risks associated with it. Always ensure the reputation of the network wallet you choose and join a reliable staking pool.