How to make money online on staking?
Today, people’s vision of saving money is going separate ways. Some funnel their funds into variable banking products thinking that’s the best way of safekeeping, others are desperately going for trading sticking to the stock market. It seems like there’s a financial product for each taste. Yet only a few know about modern investment solutions. What are these high-tech alternatives?
Why is leaving your money at the bank’s disposal not profitable and safe to invest in? Keep on reading to find out the answer!
1. Why Do Banks Fail?
- Safety & Security.
- No Profit But Losses.
- If Not Banks, Then What?
2. Why Staking?
- How Staking Works?
- Staking Coins.
- Why is Staking Profitable?
3. Staking & Saving.
- Savings Account.
- Crypto Staking Risks.
Why Do Banks Fail?
In this topsy-turvy year, many have tackled the question of how to save and multiply their money. Lock-down times made some people address high-risk ways to increase their principal, such as futures trading, options, leverages, and others. On the flipside, conservative-approach investors got bogged down in bank account savings deposits and other unprofitable products of traditional institutions. In fact, these products do not only bring benefits but losses. Here are a few reasons why.
Safety & Security
Storing your money in a bank account is not as safe as many think. Are you sure that your deposit is just at the most secure place on the globe? As a matter of fact, your money is in circulation, turning over among loan-takers, the bank utilizes it in many different ways, and nobody knows if the bank will crash or be robbed one day. Let’s recall just a few cases.
Take a peek at the perpetual financial crises in Latin America that started from 1980 and some of them are still going on. The most notorious case, informally called Corralito, happened in 2001-2002. In that period, many banks in Argentina went bankrupt, and people got their bank deposits frozen. A pretty safe store of money, isn’t it? In a situation when the country experiences the biggest foreign debt in the world economy, banks can do nothing, so no guarantees are given in fact.
What about the Cyprus high-resonance financial crisis in 2013? International creditors imposed a one-time levy on both uninsured and insured deposits. In other words, they confiscated funds of bank depositors. A process of seizing savings to protect the Cyprus banking system was called a bail-in. It has proved that banks by no means and no longer spur confidence and guarantee your principal safety. Imagine that one day you lose $1 in every $15 of your deposit. What if it’s $1 in $10 or even $1 in $5?
What happened in Cyprus became a notorious case of banks in big trouble across all Europe. Investors lost billions in this incident.
These are just crises, but nobody excludes robberies and holdups, let’s be honest:
- Let’s recall the Banco Central burglary at Fortaleza, which was the theft of about R$160 million.
- Еhe Securitas robbery was the largest heist in England happened in 2006.
- In 1976, Beirut witnessed the biggest holdup in the world when a group of people decided to rob the local branch of the British Bank.
And that’s not the final list at all.
No Profit But Losses
Have you ever heard of negative interest rates? If so, do you like the idea of paying the bank for storing your money there? It would be weird if you did. Imagine that in Germany you pay 0.4-0.5% APY to the bank if your deposit is more than €100,000. More than 200 banks in Germany currently charge negative interest rates to private customers. Charges range between 0.4% and 0.6% for deposits beginning anywhere from €25,000 to €100,000. For people whose objective is to increase their capital, this instrument can’t but mean one thing: in fact, you do not earn, you have one more expenditure.
Essentially, banks reduce interest rates below zero to spur growth, and this is one of the tools of monetary and fiscal policy to affect economic demand.
If central banks cut interest rates, interest payments such as mortgages or loans get cheaper, with borrowers having more money to spend on other things. Vice versa, it discourages depositors from opting for savings and keeping their capital in a bank. This way, economic spending increases.
If Not Banks, Then What?
Many stick to investing money in real estate in U.S. dollars. Real estate investment can be profitable but you should prepare for risks:
- However, the nature of the real estate market is unpredictable, and you never know when it will head the downgrade trend.
- Real estate is time- and money-consuming, especially if you rent or sell. Say that you have to deal with rental tenants and maintain your property.
- Real estate assets are not liquid – you’re not able to cash out immediately.
- Sometimes, to buy a property, you need to take on a mortgage which means you go to the bank.
- Among other risks are bad location, negative cash flow, high vacancies, structural problems that you can’t predict or define beforehand.
To make an upshot, the biggest flaw of investing in real estate is that you don’t have a chance to take out your capital anytime you want.
And there are always many pitfalls awaiting you at the corner. Of course, you can use this strategy to start building your wealth, but alongside, it’s better to have something more than just keeping your money in property and trying to catch up with the inflation rate.
Investors often swing from the high APY offered by staking and the imposed security of the traditional savings and other financial products. The cryptocurrency sphere has got the false impression of instability and high risks. Actually, this is a new space that most people tend to avoid since they don’t know much about it. We often rely on something familiar to us and don’t want to discover new options offered by the new-age finances. Once you lift the curtains for a peek, you’ll see a plethora of opportunities in investing with crypto. Besides buying and holding cryptocurrency, there’s a more lucrative and fascinating way of making money: crypto staking. What does it mean to stake crypto? Keep on reading!
How Staking Works?
That’s not rocket science, and you will quickly get the gist. The main point is that staking is available on Proof-of-Stake (PoS) blockchains. These blockchains use a Proof-of-Stake algorithm which defines how transactions will be verified. When a transaction is sent to the network, the network’s nodes make sure that a person owns enough tokens or won’t cause any harm to the network and then confirm it. After the transaction is added to the blockchain, it can’t be changed. Among the famous PoS blockchains are Cardano, Ethereum 2.0, Polkadot, Binance Chain, and Algorand.
Staking means that you put your coins on the line to participate in the network operation and earn rewards for this, and the proportion of the rewards correlates to how many coins you stake. Some of the blockchains allow users to participate only with a certain amount of stake.
Staking Coins and Platforms
Let’s spell out the following. Some cryptocurrencies can be staked and others are not available for staking. Why? The answer is that the blockchains these cryptocurrencies relate to are built on different mechanisms: PoS and PoW. One of PoW (Proof-of-Work) coins is Bitcoin, and you can’t stake it. PoS (Proof-of-Stake) coins can be staked.
Compared to regular cryptocurrencies, there are coins that don’t depend on fiat – stablecoins. Stablecoins are pegged to real-world assets (e.g., U.S. Dollar) and don’t change much in value. As we know, cryptocurrency coins are highly volatile, so stablecoins were created to decrease the volatility. Essentially, staking stablecoins also offers lucrative investment prospects.
Speaking of where to go staking crypto, there are numerous blockchain networks. Some of them run on purely Proof-of-Stake mechanisms, others use PoS versions, such as DPoS, and others. Among all this rich assortment, there are a bunch of highly referenced and recommended ones.
Let’s have a look at the most profitable places where your capital will not only be safe but multiplied! Here are the top platforms that are reliable, lucrative, and prospective!
Don’t want to lock up your assets with no opportunity to sell or withdraw? Go to Huobi Earn: there’re no lock-up periods and you can still earn up to 50% APY! Be flexible with your funds as much as you want! For simple staking and permanent and lucrative returns, choose Huobi Earn! Huobi is a global cryptocurrency leader since 2013, so you can enjoy maximum safety and reliability. Staking on Huobi is just that very way to grow your income fast!
Enjoy quick and hassle-free growth on eToro with no actions from your side. eToro leads all the staking process and you systematically get monthly returns! Just deposit your money, lock them up, and that’s it! Real passive income is right in your hands! Rewards are compounded and vary between 75% and 90%. That’s the perfect booster to increase your capital! eToro has over 20 million users worldwide and is regulated by top bodies (the UK’s FCA etc), you can feel maximum safe! Don’t lose a moment – take your finances to a higher level with eToro!
If you strive for safety, reliability, and want to sleep well at night, go to Binance, the largest crypto exchange on the globe. Binance is the best place to earn with crypto for both for beginners and seasoned traders and investors. While Binance is not regulated by top bodies, your funds are protected by SAFU. Congrats, you can forget about nerve-wracking. Generate passive income easily and safely! Besides, try to stake newly-minted coins and get higher APY.
Just a few easy steps to start earning passive income on Polonix: deposit funds, hold them in your account, and earn rewards! Easy as pie. Afraid that you can’t trade or withdraw your funds while earning rewards? Don’t worry, you can! While Poloniex is generating highly-competitive returns for you, you’re welcome to sell, trade, and withdraw your funds: there’s no lock-up period and no fees!
If you have just $1, you can already increase this amount by staking on Coinbase. With just $1, you can start earning passive income! Staking is technically difficult? No worries, Coinbase will do all the work for you. This is a top U.S. crypto exchange. It helps run and sync nodes to the blockchain, so you can just sit back and earn rewards. Isn’t it an excellent beginning to increase your income?
Why is Staking Profitable?
As you are picking up the gist of staking, let’s discuss why it has grown that big.
When you buy coins and start participating in the network operation, you earn rewards. This way, you make your money work and generate passive income. In fact, you can compare it with just holding your coins in your wallet for a certain time period and giving permission to stake them. As passive as can be!
While the yield depends on a blockchain, the average still reaches more than 10% that is way more lucrative in terms of APY than traditional banks. In general, staking represents an effortless way to generate passive income.
As time goes by, it’s getting easier concerning technical burdens to stake. The thing is that participating in staking, for now, includes just a few steps: setting up a wallet, filling it up with coins, and starting staking! That’s not rocket science indeed!
Staking & Saving
Savings account is the most popular financial product offered by most banks. Here, you get paid regularly depending on your saving amount. Yet, rates and available options vary depending on your country’s location. Usually, investors get no more than 2% APR. We don’t consider countries with the highest inflation rates where APR can reach up to 30%, yet the actual profit is lost.
Banks make their own income with such low odds by utilizing your money, e.g. – to give loans. The profit gained from these business practices is shared with depositors in an unprofitable way for the latter.
Basically, you don’t control your capital in a bank; you don’t own it. If any crisis, don’t raise your hopes – the bank can fulfill their guarantees with the government’s help but there’s always the second scenario when they escape liabilities and savers lose their money.
Staking is different. Firstly, you get paid for participating in the network operation. Secondly, the most minor lucrative reward is still higher than that one in banks – around 5%. Anyway, it’s higher than in any savings account offered by a bank.
Speaking of risks, they do exist in crypto staking. A well-known fact is that cryptocurrencies are quite volatile, and during your lock-up period, they can decline depending on the market situation (in the worst scenario). In this case, you might lose money. However, they can increase as well, and you will get a generous sum of money additionally to your staking reward. To avoid such instability and high volatility, people opt for staking stablecoins, for instance, USDT. They’re not likely to plummet or soar up all of a sudden, so it makes investors somehow calm and confident in the future earnings.
While traditional savings are less risky in these terms, don’t forget about the macroeconomic situation, when the banks are literally guided by the government and very often follow their orders.
Speaking of how much time you need to start, staking wins. Actually, it’s by far the fastest option. It can take several days to open a savings account (sometimes weeks) but starting staking might take just a few minutes.
All in all, staking is easier in many ways and more lucrative than bank products; however, it has certain risks. Yet, it’s possible to combine both and have a diversified portfolio.
Today, there are multiple ways to save and multiply your income but frequently people opt for old-fashioned and trivial options, such as – bank savings account or real estate. Imposed to be reliable and safe, these options bring about loads of pitfalls and what’s more – real-life failing plots. It would be best if you kept your eyes open and always stayed sharp even with these seemingly “bomb-proof” investment solutions from banks.
The better thing will be to keep up with the times and go for opportunities the digital world offers to us. The cryptocurrency industry is rich and abundant in numerous investing options. For many, it’s hard to deal with because they are not familiar with this sphere, however, it’s not late to kick things off! Don’t be afraid to increase your income with cryptocurrency, master the modern ways that are far better and more effective in terms of generating passive income!