If you have Bitcoin, you are likely looking for ways to grow your crypto and may have heard of Bitcoin staking. But what is Bitcoin staking, and is crypto staking actually profitable? It can be profitable if you make the right decisions, but there is still plenty to learn before you start staking your Bitcoin.
Basics of Bitcoin Staking
Staking Bitcoin or any other cryptocurrency is considered an alternative to mining that requires significantly fewer resources. With staking, you essentially lock up your cryptocurrency in exchange for receiving rewards.
Some cryptocurrencies use a Proof of Stake consensus mechanism. In that case, you would stake your crypto in an approved Bitcoin staking wallet and earn more crypto for holding it there.
Platforms can also offer Bitcoin staking. In this case, it involves holding your crypto on the given platform or exchange and earning interest or additional crypto for doing so.
Remember that Bitcoin staking results in you having more Bitcoin than you started with. You will also benefit from any increase in its price during that period.
How Does Bitcoin Staking Work? What Is Proof of Stake?
Proof of Stake (PoS) is an alternative to Proof of Work (PoW). PoW is how Bitcoin is created, i.e., mining, and it is known for being highly resource-intensive and not available to everyone. That resource use comes from the need to solve increasingly complicated equations, which use extensive computer resources.
By contrast, Proof of Stake requires participants to lock up or stake their coins. Then, the protocol chooses one of the participants to validate the following block. In exchange for the validation, they receive cryptocurrency. The more of the crypto in question you hold, the more likely you are to be chosen.
Delegated Proof of Stake
There is also another variation called Delegated Proof of Stake (DPoS). In this mechanism, your crypto holdings entitle you to voting rights. You get more votes if you have more crypto. You then use the votes to elect delegates. Those delegates typically receive the rewards and then return them proportionally to their electors.
Platforms With Staking Expand the Cryptos You Can Stake
Now that we explained Bitcoin staking, you can see that it technically only works with cryptocurrencies that use Proof of Stake. Bitcoin is not one of those. Some common ones are Ethereum 2.0, Tezos, Algorand, and Icon. However, crypto users are savvy, and platforms offer an alternative.
The term crypto staking has expanded to include any act of holding your cryptocurrency or locking it up to profit. This means that something like a crypto savings account or crypto investment account can qualify.
That provides nearly endless opportunities, as you can find a platform that engages in Bitcoin lending or other methods of growing your cryptocurrency. It also lets you stake nearly any crypto you want, including Bitcoin. You don’t have to limit yourself to those with Proof of Stake consensus mechanisms.
Is Bitcoin Staking Profitable?
Yes! Crypto staking is set up to be profitable. Remember that staking works because of Proof of Stake. In other words, cryptocurrencies offer profits in exchange for staking to help them run the network. As such, they need to make it profitable as that is the best way to encourage people to participate.
Bitcoin staking can also be profitable, even if you cannot do it with the traditional Proof of Stake model. In practicality, you will want to look for Bitcoin staking opportunities that offer strong performance or good interest rates. These will typically come from platforms using a range of strategies in addition to Bitcoin lending to generate a profit.
While you should do some research on the Bitcoin staking wallet, exchange, or platform you are considering, you do not have to do anything after you pick one. At that point, you only need to deposit your Bitcoin and leave it there. That is the entire point of staking. You receive a reward in exchange for no effort other than letting your cryptocurrency sit.
Non-traditional Staking Can Be Even More Profitable
In the case of cryptos without PoS mechanisms, the platform offering the staking wallet will rely on other methods to generate a profit. These can include lending cryptocurrency, trading it for profits, or using arbitrage (which is the difference in prices across exchanges).
In this case, you can think of the Bitcoin staking in any terms you want. You may consider it as lending Bitcoin, using a Bitcoin savings account, or investing your Bitcoin. Any of those are valid as there is some overlap between them.
This type of non-traditional Bitcoin staking can be even more profitable than staking a PoS coin. The returns will depend on the quality and experience of the experts.
How to Start Bitcoin Staking With Haru Invest
If you want to start Bitcoin staking, Haru Invest is one of those platforms that gives you the opportunity to do so. You simply agree to lock your Bitcoin in your Haru Invest account for the investment period. Then, Haru’s experts make savvy investments, lend, and use other methods to generate profits. In exchange, your Bitcoin grows in value, just like it would if it were a coin that you could stake with PoS.
To start staking Bitcoin with Haru Invest, visit the signup page. You will first have to create a username and password. Then, you will get to choose what type of account you want and deposit your Bitcoin. If your goal is to stake Bitcoin, you want the Haru Invest Earn Like the Best account.
This account has an investment period of three months or more. There are no fees unless you earn at least 15% APR, and the fee is just 15% of those profits.
Latest Performance Numbers of Haru Invest
To get an idea of how profitable Bitcoin staking can be, look at the latest performance figures from Haru Invest Earn Like the Best. Haru announces returns biweekly, and the most recent data is from March 1-15, 20121. There was a biweekly return of 0.6261%, which is 15.23% annualized. You can check our latest performance numbers from our medium page.