Staking is the process of participating in a cryptocurrency network by holding a certain amount of that specific cryptocurrency in a wallet. By doing this, individuals can help validate transactions and secure the network. In return for their contribution, stakeholders are rewarded with additional cryptocurrency tokens.
Staking helps to incentivize network participants to act in the best interest of the network, as they have a vested interest in its success. The more tokens a person holds, the more influence they have in the network and the greater their potential rewards.
There are different forms of staking, such as proof of stake and delegated proof of stake. Proof of stake involves individuals being selected to create a new block on the blockchain based on the number of coins they hold. Delegated proof of stake allows users to vote for a select group of individuals to validate transactions on their behalf. Both methods play a crucial role in maintaining the integrity and security of the network.
