What is staking ETH? Do you need a super-powerful computer to get started? Find out here.
Are You Need a Powerful PC to Stake ETH?
The crypto world is built and relies on technology. These highly advanced digital assets are a testament to the computing power of today, and simply couldn’t have existed with the tech we had in previous years.
While simply buying some Bitcoin or checking the SingularityNET price might not require much in the way of computing power, getting more involved with the industry and mining coins of your own requires far more firepower. Do you need a powerful computer to stake Ethereum? Let’s find out.
What is Ethereum?
Ethereum is a decentralised blockchain platform that has its own native cryptocurrency called Ether (ETH). ETH is the biggest cryptocurrency in terms of market cap after Bitcoin and has a wide range of uses due to its highly scalable and programmable blockchain network.
Originally, Ethereum’s blockchain platform operated on something known as a proof-of-work (POW) system. POW is what’s known as a consensus mechanism, it allows users to validate and record cryptocurrency transactions.
Transactions are recorded as blocks and are then added to a chain after verification. Each block generates a unique hash code, with miners on the network vying to generate a hash with a value equal to or less than the block. After this hash has been generated, the block will be validated and added to the chain, and the miner will receive a payment in cryptocurrency.
In November 2022, Ethereum moved away from this POW system by completing a lengthy process known as the Ethereum Merge.
Now, Ethereum uses something known as a proof-of-stake (POS) system. Under this system, transaction verifiers are randomly selected from all currency holders, based on how much ETH they have ‘staked’ in the blockchain. The ETH in the blockchain is used as collateral when these verifiers are chosen and they are then rewarded when a transaction is validated.
This is what’s known as staking ETH. Users can participate in staking to help validate transactions and earn ETH in return.
What Kind of Computer Do You Need to Stake ETH?
Mining Bitcoin is incredibly processor intensive; it requires an advanced setup capable of performing complex mathematical equations. What’s more, mining Bitcoin uses a lot of energy, not exactly ideal in today’s times of rising energy bills and climate meltdown.
By moving to a POS system, Ethereum effectively reduced the need for participants to have expensive and sophisticated computer setups, as ETH staking can be carried out using a relatively standard modern computer.
However, when staking ETH, participant computers are what are known as nodes. Ethereum requires these nodes to be online and fully operational 24/7, with financial penalties facing those who even briefly disconnect from the server.
What Else Do You Need to Stake ETH?
If you want to get involved in the crypto world and start staking ETH, unfortunately, it’s not a case of simply jumping in and getting straight to it.
First, you will have to have staked a minimum of 32 ETH into the blockchain to be considered for validator status. At the current price of ETH, that comes to a total of just under $58,000.
What’s more, there’s no guarantee that your staked ETH will have held its value by the time you decide to withdraw. This makes staking ETH an incredibly risky process that should never be done unless you’re certain you can afford to lose your staked crypto.
Why Stake ETH?
So far, it probably sounds like staking ETH is a complicated and technical process that requires a large investment to get started. While these things may be true, there are also a number of benefits that you can enjoy should you choose to stake ETH.
First and foremost, there are obvious financial incentives. Staking can see you earn yearly interest of around 5% – 7% of your staked sum. This might not seem like much, but considering staking can be fully automated after the initial setup, it can serve as an excellent source of passive income.
Additionally, staking ETH can be a low-risk way of getting involved with crypto. Other investing and trading approaches can be highly unpredictable and volatile, requiring expert market knowledge and constant vigilance to ensure your investments are doing well.
Finally, the crypto community is tightly knit and incredibly supportive. Many people believe that digital assets and blockchain technology are the future and are set to usher us into a new digital age. By staking ETH, you can get involved with the crypto world in a direct, meaningful way. You’ll be helping to validate transactions, grow the blockchain, and further establish crypto as a viable payment method.
Cryptocurrency and the blockchain are two of the hottest topics in tech today. Experts predict they are set to revolutionise a number of different industries and sectors and will herald a new dawn of internet tech.
Ethereum is one of the most promising cryptocurrencies and blockchain platforms out there. If you want to get involved with Ethereum and start staking ETH, thankfully it’s easier than you might expect. You don’t need a supercomputer, but you will need considerable funds to stake your initial collateral and get started.