The Proof Of Stake system is exactly the same as mining, except you don’t need special hardware to solve mathematical problems on a particular algorithm but just some coins in your wallet. While it sounds great, the traditional mining system is still leading now, but some Altcoins using this system could be interesting to invest in. There are also a few services that are acting as “pool” and redistributing profits from stakes to investors.
The downside is that the coin that you are “staking” can crash.
The Proof Of Stake system is really new and many projects are trying to take advantage of it. I researched and found many interesting ways to earn interests.
Earn interests directly (no counter party risks) :
What you need to know is that many new cryptographic currencies have been created and have those interests directly written into the code. But we’re talking about economy here and some projects have been thinking about limits to mitigate the risks of “the rich getting richer” (well, that’s how the world’s economy is working right now but anyway).
- BitShares is a very interesting and becoming a successful project of a decentralized exchange on where you can trade assets pegged called BitAssets. While it can be difficult to understand, basically you can save for example some BitUSD (for US Dollars) and earn interests on it, as they write on their website “All BitAssets earn a variable yield derived from transaction fees, interest paid by short sellers, and other sources.” Interesting right ? I haven’t been really digging it but many people find it promising. Serious investors will maybe want to search a little more about the value mechanism of those assets and how much interests you can really earn. But the idea is really big : the fees are rewarding everyone and not only a centralized exchange, because it’s completely and purely decentralized. As I’m writing, BitShares is fourth by market capitalization (behind Bitcoin, Ripple and Litecoin). I think it’s good if you are already familiar with cryptocurrencies, but BitShares can be a bit difficult to understand. They have a FAQ explaining everything. I think we can summarize it like that : it’s a complete decentralized bank with a specific token (bitshares) and pegged tokens (BitAssets). Crazy right ? Well that’s what Bitcoin indirectly started. I would not recommend it if you’re completely new to cryptocurrencies though.
- NXT is a digital currency which didn’t take its code from Bitcoin but have have been developed with its own base. Some people are strongly thinking that it could the “next Bitcoin” because it has impressive features such as private messaging, decentralized marketplace, and even an asset exchange. The proof of stake rewards are coming from transfer fees.
Proof of Stake with a bitcoin based code currencies are becoming very popular. From hybrid ones to 100% POS system, from low interests to very high ones (often experimental) it could be interesting to have some money invested in it. Usually you just need the official wallet to stake.
- Peercoin is one the first cryptocurrency to have implemented the POS system, with 1% interests/year. They even have a page for investors.
- Blackcoin is a successful and innovative cryptographic currency that also has 1% interest a year.
- CLAM is a very interesting POS cryptocurrency that gained popularity with the Just-Dice gambling game website using it instead of Bitcoin. Expected rate is around 0.2% per day but the exchange rate is remarkably resilient as I guess people are holding their stash. The problem I see is that the currency is heavily tied to Just-Dice, from an investor’s point of view it’s a risk to consider. Even if you hold safely your coins, their value could plummet as people panic sell. On the other side, other gambling websites are now using clams and it could save the currency as users would go to alternative services. The official website is a bit difficult to surf on, you can instead just see the CLAM coinmarketcap page.
I have listed the most interesting ones I think. I you would like to suggest a good POS coin, let me know in the comments or by e-mail !
Earn interests with a third party wallet :
This way to stake is quite new and I haven’t services that have enough trust to list it here. The only one, is again Just-Dice that will constantly earn you 0.2% interests a day (without using the offsite investing option to leverage, risks are very low to lose with lucky gamblers).
Disclaimer : I can’t be held responsible for any loss encountered using these services. Sometimes the links are affiliates links. It can often provide you a discount and help me running this website. It does absolutely not influence my reviews and opinion.