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The concept of staking in cryptocurrencies has become one of the most talked about aspects of owning and profiting from digital assets, in part because of its ability to generate yields higher than bank savings rates.
The term “staking” stems from an alternative mechanism for validating transactions and securing blockchain networks called Proof of Stake (PoS). PoS attempts to improve upon the original mechanism used by Bitcoin called Proof of Work (PoW). Only cryptocurrencies that use PoS can be staked.
However, despite the touted improvements, not all cryptocurrencies use staking or have changed their mechanics to staking. Bitcoin, in particular, doesn’t seem to even think about switching in the near future.
Bitcoin was the first blockchain-based asset to gain mainstream recognition and widespread adoption as a secure digital currency, thanks to a simple and ingenious invention called Proof of Work (PoW).
PoW provides a solution to a coordination problem known as the Byzantine Generals Problem that was long considered insoluble.
