Home Crypto Education Cryptocurrencies 5 Best Staking Coins in 2020: Checking Out Number 4

5 Best Staking Coins in 2020: Checking Out Number 4

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Investors stake their cryptocurrencies by locking their assets for the reward incentives. Staking is similar to saving in banks because users lock their money in preferred financial services, but crypto staking earns higher ROI than fiat savings in banks. 

Staking is an innovation that allows users to reap maximum gains from their digital investments. Users can earn passively when their nodes validate and add blocks to blockchain networks.

Staking coins utilize a special, more user-friendly blockchain consensus for mining cryptocurrencies called Proof of Stake. In this article, we take a look at five of the best staking coins in 2020 you need to check out. But first, let’s get into the nitty-gritty details of the mining consensus. 

Proof of Stake vs. Proof of Work

Traditional Proof of Work (PoW) validates blocks of transaction information via complex cryptographic computing that generates consensus. In contrast, Proof of Stake (PoS) relies on democratic, open-source electioneering to select validating nodes for every block.

PoW rewards miners for solving mathematical problems with newly created crypto tokens, while PoS rewards validators with transaction fees. PoS systems select random users in the blockchains, making the networks impressively secure.

Proof of Stake systems start by selling a stock of pre-mined coins, and others switch from PoW systems. The switching process is called forging, and it includes locking coins in stakes. The size of each stake determines if it’s viable for validating the next block. Robust stakes have a more competitive advantage.

Nodes forge blocks by first authenticating transactions to match details on previous information blocks. Designers had to address the concern that wealthier nodes could get all the staking bids. Therefore, crypto startups implement:

  • Coinage selection: this strategy considers how long users lock their coins in stake. Coinage is determined by the number of coins multiplied by the period of stake. Coinage is reset to zero after forging, and networks stipulate minimum coinages for staking. This way, nodes with large stakes don’t get dominant control over the network.
  • Randomized block selection: this strategy is predictable, but it provides sufficient protection from corruption. The system selects validating nodes transparently via stake sizes and hash values.

Now, without further ado, let’s review the best staking coins in 2020 worth your time and fiscal investment. 

Best Five Staking Coins in 2020

NOW Token

This digital asset is native to ChangeNOW, a robust crypto exchange platform. The staking coin empowers users to buy numerous products within the NOW infrastructure.

The staking rewards are annual, and staking longer rewards more. You can lock as little as 10 NOW tokens and manage these digital assets via:

  • Token Freezer.
  • Guarda Wallets staking tools.
  • BEPTools.

The tool you use to freeze your tokens will automatically predict your rewards every week. Users stand to gain significantly by staking NOW tokens, yielding high interests, weekly rewards, and demanding little principal investments.

Decred (DCR)

This staking coin was announced in 2016, and it forked from Bitcoin. The designers, miners, and validators disagreed with internal Bitcoin governance. Therefore, they created this hybrid coin, which is powered by both PoW and PoS mechanisms.

The Decred platform makes DCR tokens attractive via:

  • Smart contracts.
  • Public proposal platform.
  • Cross-platform wallets.
  • Cross-chain atomic swaps.

Decred PoW/PoS mechanisms require miners to build new blocks by validating transactions. The miners earn 60 percent of block rewards, and DCR holders can obtain voting tickets for all open network proposals.

You can stake DCR in two ways:

  • As a solo voter.
  • Through voting service providers.

When voting solo, you need to use the native command line and connect your wallet to Decred’s blockchain. Voting service providers charge about five percent of rewards for staking on behalf of users.

It supports user democracy, empowering network members to vote for consensus. However, much like Bitcoin, Decred can’t scale easily, and it falls behind in transaction speeds.

Tezos (XTZ)

This cryptocurrency is novel compared to others since it was launched in June 2020. It serves multi-purposes and is reliable for executing smart contracts. It is the native coin of a self-correchttps://tezos.com/ting platform.

The Tezos blockchain utilizes a unique codebase, using the OCaml computer language. Its PoS consensus implements delegated Liquid Proof of Stake.

XTZ is popular because it offers high staking to third-parties, who claim up to 25 percent of staking rewards. The 2020 ROI for staking Tezos is 5-6%. It is stabilized by its codebase, which allows self-correcting and built-in governance. Thus, it minimizes the risk of hard forks like the case of Bitcoin’s blockchain.

Tezos are created via ‘baking,’ which is just another name for staking. Validators allowing fraudulent transactions are to lose all their staked Tezos immediately the incorruptible blockchain flags incorrect validating. This is significant because bakers must have 8,000 Tezos to stake.

Algorand (ALGO)

ALGO is permissionless and decentralized. It transcends bordered economies and bypasses the need for financial regulators and other third-parties. ALGOs are great staking coins because of the low transaction costs involved.

This coin is native to the Algorand network, which utilizes Pure Proof of Stake to validate transactions. It does not facilitate users to delegate staking responsibilities to other nodes.

This blockchain reduces the risk of dominant users taking over. It decentralizes the network and disallows staking delegations. Thus, it reserves the voting power for the majority’s interests. Staking ALHGOs is relatively easy, and you only need a non-custodial wallet to hold ALGO tokens.

Just one ALGO is enough for staking. Users can earn ten percent annual interest, 5.46% staking on StakingRewards.com, or eight percent on Binance. Algorand facilitates 1,000 transactions per second, attracting them because of easy user experiences. Staking rewards are paid out every 20 minutes.

Loom Network (LOOM)

The Loom Network is a Platform as a Service meant for dApp developers. It supports Solidarity dApps running on side chains of the crypto network. This platform allows different application developers to personalize their consensus-building mechanisms.

Validating Loom transactions is easy, and users can rely on Delegated Proof of Stake. Scaling becomes easier, but users still enjoy Ethereum’s blockchain security.

These staking coins come into the market in 2018, but users started staking LOOM tokens a year later. By 2020, the Loom Basechain bridged different chains via impeccably high performance.

Cross-chain functionality makes LOOMs attractive stake coins. Developers use this Platform as a Service network to pay for hosting, and staking users can enjoy the rewards of creating new blocks.

All you need is one of the following wallets that are compatible with Loom’s blockchain:

  • Trezor.
  • Metamask.
  • Ledger.

Users must meet gas costs on the Ethereum network by depositing some ETH. Afterward, they need to connect their wallets to the LOOM Basechain Wallet for staking.

This network is popular because you can delegate staking to validators, who will claim 25% of your stake rewards. You can expect an annual ROI of 17% from LOOM stakes.

Parting Shot

Let’s agree that these coins are all pretty attractive investment options. Their main benefits include:

  1. Fast delivery.
  2. Lucrative ROI.
  3. Transparent, immutable accounting.
  4. Daily and annual payouts.

Validators are much quicker than bitcoin miners, which makes staking coins appealing to novice users. 

Staking crypto coins is a great investment option for crypto users. It makes it easier to earn high-interest rates on your savings, and you can conveniently, securely convert fiat currency into digital currencies. 

Embrace staking coins as crypto asset institutionalization edges closer to reality. The next time your friends ask for a great investment idea, share this article with them. 

You can also check out these coins for yourself and start earning passively. Please share your best staking coins in the comments section. 

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