When you stake your cryptocurrency, you not only hold a certain amount of coins in order to validate transactions and create new blocks on the blockchain. In addition to being more energy-efficient than traditional proof-of-work mining algorithms used by Bitcoin (BTC) and other cryptocurrencies like Litecoin (LTC), Proof-of-Stake protocols enable smaller-scale participants – even those without specific technical expertise – to contribute towards sustaining decentralized networks while earning attractive returns at relatively low-risk levels compared to trading activities. Instead of competing with other miners through brute-force computing efforts, stakers are rewarded based on their contribution to maintaining the stability and security of the underlying blockchain network. This process differs significantly from traditional mining methods that require specialized hardware and intensive computational power. Essentially, cryptocurrency holders can support network operations and maintenance by depositing funds into a designated account, known as a “staking wallet.” In exchange for this service, users receive rewards from newly-created tokens or transaction fees. Cryptocurrency staking is becoming an increasingly popular way to earn passive income in the world of blockchain technology.
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