How to make money online on staking?

Today, people's views on saving go in different directions. Some channel their funds into variable banking products, believing that it is the best way to save them, while others are desperate to trade, sticking to the stock market. There seems to be a financial product for everyone. However, only a few are aware of modern investment solutions. What are these high-tech alternatives? Why is leaving your money at the bank's disposal not a profitable and safe way to invest? Keep reading to find out the answer.

1. Why do banks fail?

  • Safety and security.
  • No profit but a loss.
  • If not the banks, then what?

2. Why staking?

  • How does staking work?
  • Coins to stake.
  • Why is staking profitable?

3. Staking and saving.

  • Savings account.
  • Staking risks.
How Staking Works?
How Staking Works?

Why do banks fail?

In this turbulent year, many users have faced the question of how to save and multiply their money. Unstable times have forced some people to turn to high-risk ways to increase their capital, such as trading futures, options and others. On the other hand, conservative investors have stuck at saving deposits in bank accounts and other low-yielding products from traditional institutions. In fact, these products not only bring in profits, but also losses. Here are some reasons why.

Why Do Banks Fail?
Why Do Banks Fail?

Safety and Security

Keeping your money in a bank account is not as safe as many people think. Are you sure your deposit is in the safest place in the world? In fact, your money is in circulation, it rotates between lenders, the bank uses it in many different ways, and no one knows if the bank will collapse or be robbed one day. Let's recall just a few cases.

Take a look at the perpetual financial crises in Latin America that began in the 1980s and some of them are still ongoing. The most notorious case, informally called Corralito, occurred in 2001-2002. At that time, many banks in Argentina failed and people saw their bank deposits frozen. A pretty safe deposit of money, right? In a situation where the country has the highest foreign debt in the world economy, banks can't do anything, so no de facto guarantees are given. 

What about the high-profile financial crisis in Cyprus in 2013? International creditors imposed a fixed rate on insured and uninsured deposits. In other words, they confiscated the funds of bank depositors. The process of seizing savings to protect Cyprus' banking system was called a bail-in. It has been proven that banks in no way and more do not stimulate trust and ensure their basic safety. 

What happened in Cyprus has become a notorious case of banks in big trouble across Europe. Investors lost billions in this incident.

It's just a crisis, but nobody's ruling out robberies and muggings, let's be honest:

  • We recall the robbery of the Central Bank of Fortaleza, which involved the theft of about 160 million reais.
  • The Securitas robbery was the biggest robbery in Britain in 2006.
  • In 1976, Beirut witnessed the biggest robbery in the world when a group of people decided to rob the local branch of the British Bank.

And this list is not complete.

Safety & Security
Safety & Security

No profit but a loss

Have you ever heard of negative interest rates? If so, do you like the idea of paying the bank to hold your money? It would be weird if you did. Imagine that in Germany you pay between 0.4 and 0.5% interest per year to the bank if your deposit is over €100,000. Currently, more than 200 banks in Germany charge negative interest rates to private customers. The charges range from 0.4% to 0.6% for deposits from €25,000 and €100,000. For people whose goal is to increase their capital, this instrument can only mean one thing: you don't actually earn money, you have an extra expense. 

Basically, banks cut interest rates below zero to stimulate growth, and this is one of the tools of monetary and fiscal policy to influence economic demand. If central banks lower interest rates, interest payments, such as mortgages or loans, become cheaper, and borrowers have more money to spend on other things. Conversely, it discourages depositors from saving and keeping their capital in a bank. Thus, it increases economic spending.

No Profit But Losses
No Profit But Losses

If not the banks, then what?

Many people cling to investing money in US dollar real estate. Real estate investing can be profitable, but you have to be prepared for the risks:

  • However, the nature of the real estate market is unpredictable, and you never know when it will lead to a downward trend. 
  • Real estate takes time and money, especially if you are renting or selling. Let's say you have to deal with renting tenants and maintaining your property.
  • Real estate is not liquid, that is, it cannot be sold immediately.
  • Sometimes, to buy a property, you have to take out a mortgage, which means you go to the bank.
  • Other risks include poor location, negative cash flow, high vacancy rates, and structural problems that cannot be predicted or defined in advance.

To summarize, the biggest flaw of investing in real estate is that you don't have the ability to withdraw your capital whenever you want. And there are always plenty of traps waiting around the corner for you. Of course, you can use this strategy to start building your wealth, but on the side, it's better to have more than keep your money in property and try to keep up with the rate of inflation.

Investing in real estate
Investing in real estate

Why Staking?

Investors often oscillate between the high APY offered by staking and the security imposed by traditional savings and other financial products. The cryptocurrency sphere has a false impression of instability and high risk. In reality, it's a new space that most people tend to avoid because they don't know much about it. We often rely on something familiar and don't want to discover the new options offered by new-age finance. Once you lift the curtains to take a look, you will see a plethora of investment opportunities with cryptocurrencies. In addition to buying and holding cryptocurrencies, there is a more lucrative and fascinating way to make money: crypto staking. What does crypto staking mean? Read on.

Why staking?
Why staking?

How does staking work?

It's not rocket science, and you get the idea right away. The main point is that staking is available on Proof-of-Stake (PoS) blockchains. These blockchains use a Proof-of-Stake algorithm that defines how transactions are verified. When a transaction is sent to the network, the nodes in the network make sure that a person has enough tokens or they won't cause any harm to the network and then they confirm it. Once the transaction is added to the blockchain, it cannot be changed. Famous blockchain PoS include Cardano, Ethereum 2.0, Polkadot, Binance Chain and Algorand.

Staking means that you put your coins on the line to participate in the operation of the network and earn rewards for it, and the proportion of the rewards is related to the amount of coins you stake. 

Staking and exchange platforms

Some cryptocurrencies can be staked and others are not available for staking, why? The answer is that the blockchains these cryptocurrencies refer to are built on different mechanisms: PoS and PoW. One of the PoW (Proof-of-Work) currencies is Bitcoin, and it cannot be put into play. PoS (Proof-of-Stake) currencies can be put into staking.

Compared to regular cryptocurrencies, there are currencies that are not based on fiat money: stablecoins. Stablecoins are tied to real-world assets (e.g. the US dollar) and their value doesn't vary much. As we know, cryptocurrencies are very volatile, so stablecoins were created to decrease volatility. Essentially, staking stablecoins also offers lucrative investment prospects. 

Speaking of where to go to stake crypto, there are numerous blockchain networks. Some of them operate with purely Proof-of-Stake mechanisms, others use PoS versions, such as DPoS, and others. Among all this rich assortment, there is a handful that is highly referenced and recommended. 

Let's take a look at the most profitable places where your capital will not only be safe, but will multiply. Here are the best platforms that are reliable, profitable and have prospects!

Huobi

Go to Huobi: no lock-in period and you can still earn up to 50% APY! Be as flexible with your funds as you want! For easy staking and permanent, profitable returns, choose Huobi! Huobi has been a global cryptocurrency leader since 2013, so you can enjoy maximum security and reliability. staking on Huobi is just that - the way to grow your income fast!

Huobi
Huobi

eToro

Enjoy fast and hassle-free growth on eToro without doing anything. eToro handles the entire staking process and you earn steady monthly returns. Just deposit your money, lock it in and you're done! True passive income is in your hands! The rewards are compounded and range from 75% to 90%. It's the perfect booster to increase your capital! eToro has over 20 million users worldwide and is regulated by leading bodies (UK FCA, etc.), so you can feel confident! Don't miss a moment: take your finances to the next level with eToro!

eToro
eToro

Binance

If you are looking for security, reliability and want to sleep well at night, go to Binance, the world's largest cryptocurrency exchange. Binance is the best place to earn with cryptocurrencies, both for beginners and experienced traders and investors. Although Binance is not regulated by the higher bodies, your funds are protected by SAFU. Congratulations, you can forget about the nerves. Generate passive income easily and safely! Also, try staking, the new way of mining coins and get a higher APY.

Binance
Binance

Poloniex

Just follow a few simple steps to start earning passive income on Poloniex: deposit funds, keep them in your account, and earn rewards. Are you afraid you won't be able to trade or withdraw your funds while earning rewards? Don't worry, you can do it! While Poloniex generates highly competitive returns for you, you can sell, trade and withdraw your funds: no lock-in period and no fees! 

Poloniex
Poloniex

Coinbase 

If you only have $1, you can already increase this amount by staking on Coinbase. With only $1, you can start earning passive income! Is it technically difficult to stake? Don't worry, Coinbase will do all the work for you. It is one of the leading cryptocurrency exchanges in the United States. It helps manage and sync nodes with the blockchain, so you can just sit back and earn rewards. Isn't that a great start to increasing your income?

Coinbase
Coinbase

Why is staking profitable?

Since you are getting the essence of the stakes, let's discuss why it has grown so much.

When you buy coins and start participating in the operation of the network, you earn rewards. In this way, you make your money work and generate passive income. In fact, you can compare it to keeping your coins in your wallet for a certain amount of time and giving permission to play them. 

Although the return depends on the blockchain, the average is still over 10%, which is much more profitable in terms of APY than traditional banks. Overall, staking represents an effortless way to generate passive income.

As time goes by, it's getting easier and easier in terms of the technical burdens of staking. The fact is that participating in staking, for now, involves only a few steps: set up a wallet, fill it with coins and start staking! It's not rocket science.

Staking and saving

Savings Account 

A savings account is the most popular financial product offered by most banks. You receive a regular payment based on the amount of your savings. However, the interest rates and options available vary depending on what country you are in. Typically, investors get no more than a 2% APR. We do not consider countries with the highest inflation rates, where the APR can be as high as 30%, even if the real benefit is lost.

Banks make money from these low probabilities by using their money, for example, to make loans. The profit from these business practices is shared with depositors in a way that is not profitable for them.

Basically, you don't control your capital in a bank; you don't own it. If there is a crisis, there are no illusions: the bank can honor its guarantees with government help, but there is always the second scenario where liability is evaded and savers lose their money. 

Staking Risks

The stakes are different. First, you get paid to participate in the operation of the network. Second, the least profitable reward is still higher than banks: about 5%. However, it is higher than in any savings account offered by a bank.

Speaking of risks, they exist in cryptocurrency staking. A well-known fact is that cryptocurrencies are quite volatile, and during their lock-in period, they can go down depending on the market situation (worst case scenario). In this case, you may lose money. However, they can also go up, and you will get a generous amount of money in addition to the reward of your stake. To avoid such instability and high volatility, people choose to stake stablecoins, for example USDT. They are not likely to collapse or skyrocket all of a sudden, so it makes investors somewhat calm and confident about future gains.

Although traditional savings are less risky in these terms, one must not forget the macroeconomic situation, when banks are literally run by the government and very often follow its orders.

In terms of the time it takes to get started, the stakes win out. In fact, it's the fastest option by far. Opening a savings account can take several days (sometimes weeks), but getting started staking can only take a few minutes.

All in all, staking is easier in many ways and more profitable than banking products; however, it does have some risks. However, you can combine the two and have a diversified portfolio.

Conclusion

Nowadays, there are multiple ways to save and multiply income, but people often opt for old-fashioned and mundane options like bank savings accounts or real estate. These supposedly reliable and safe options come with a lot of pitfalls and moreover, real failed schemes. It would be best to keep your eyes open and always be on guard even with these seemingly "foolproof" investment solutions from banks.

The best thing to do is to keep up with the times and take advantage of the opportunities that the digital world has to offer. The cryptocurrency industry is rich and abundant with numerous investment options. For many, it is difficult to approach because they are unfamiliar with this sphere, however, it is not too late to get started! Don't be afraid to increase your income with cryptocurrencies, master the modern ways that are much better and more effective in terms of generating passive income! 

If you want to know about the best offers from top platforms and crypto exchanges, please join our community! 

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