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TOP 5 best cryptocurrencies for stacking in 2021

TOP 5 best cryptocurrencies for stacking in 2021

TOP 5 best cryptocurrencies for stacking in 2021

Staking has replaced Proof-of-Work (POW) mining, which requires a lot of computing power, equipment costs and maintenance. Instead of buying staking equipment, users buy the cryptocurrency itself and place a bet to get the right to add blocks and claim rewards for their share in the network. In this article, we will look at the top 5 best cryptocurrencies for stacking in 2021.

What is staking and how does it work?

The first PoS-based blockchain set high limits for staking: users had to freeze thousands or even tens of thousands of dollars in a crypto wallet in order to be eligible for rewards, confirm transactions and add new blocks to the network. This problem was fixed in the new generation blockchain, which switched to the Delegated Proof-of-Stake (DPoS) algorithm. In DPoS networks, the main role is played by network validators, who are responsible for validating and adding new blocks, ensuring network security and maintaining its operability. Validators compete with each other to be the first to add a block and receive a reward, and in order to become a validator, it is necessary to block a large amount in the wallet, which is inaccessible to most users. In addition, validators need to configure nodes and monitor the operation of servers. (Also, if you are interested in blockchain, read our article, the first cartoon based on blockchain.)

 

Holders who simply store small amounts of cryptocurrencies and want to participate in staking can become delegates. This means that they delegate their coins to validators and claim rewards without participating directly in mining. But the delegates pay a commission on the profit, which, as a rule, is set by the validators themselves in accordance with the protocol limits.

 

Ethereum 

 

Ethereum is the second largest cryptocurrency by capitalization and the largest blockchain with smart contracts, with a huge infrastructure of decentralized applications. (You can also read our article on what smart contracts are.) The platform leads in the number of applications and tokens issued on it, and the network supports a large community. Since its creation in 2013, Ethereum has attracted the attention of crypto enthusiasts, since it had a broader functionality compared to the first cryptocurrency bitcoin. The platform provides the Ethereum Virtual Machine (EVM) and the Solidity language for creating decentralized applications (dApps) based on the Ethereum blockchain. Currently, the platform operates on the PoW mechanism, but the Medalla test network has already been launched, running on PoS, in which BETH coins, tokens replacing an equivalent amount of ETH, are available. Holders can now send Ethereum to stacking and receive an income of up to 20% per annum to their wallet, but the coins will be blocked for almost two years. 

 

Cosmos Network

 

Cosmos is a decentralized network or ecosystem of parallel blockchain based on the TenderMint consensus algorithm, which are interconnected, but can function independently of each other. The network is also called the cosmos “Internet of blockchain”. The cosmos network solves the problem of isolation of blockchain by providing a single infrastructure that allows them to interact. In other words, users can easily transfer tokens from one blockchain to another. This property is called interoperability. To ensure cross-chain interaction, we have developed Inter-Block Communication (IBC), a protocol that provides a strong connection between different blockchain.

 

Cardano 

 

Cardano is the world’s first considered decentralized platform created on the basis of scientific research and empirical data. The platform is also known as the “Ethereum killer”. This protocol allows you to create and run blockchain applications and smart contracts like Ethereum. The Cardano platform was developed back in 2014, but unlike the Ethereum developers, the team did not launch the protocol quickly, but concentrated on researching and solving the problems of the blockchain industry. In 2017, ADA tokens were released, which act as a native cryptocurrency. The Cardano network is based on two layers: the first layer is responsible for processing ADA transactions, while the second ensures the operation of the smart contract. Cardano is able to become one of the main competitors of Ethereum not only because it has high bandwidth and does not have such pronounced scaling problems, but also because the entire ecosystem consumes only 6 GW/h of electricity, which is only 0.01% of the consumption of the bitcoin network. This makes the platform more eco-friendly and sustainable.

 

ZHCash 

 

A multifunctional platform based on the ZRC20 standard with master contracts aimed at business modernization and digitalization. ZHCash provides an advanced SDK and intuitive tools for convenient and fast development of decentralized applications with smart contracts and the creation of tokens. Thanks to the ZHCash SDK, developers do not need to create code from scratch, and minimum requirements are set for the software.

 

 The platform supports the PoS algorithm of the third generation (Proof-of-Stake 3.0). This means that users’ wallets are full-fledged nodes of the network and can act as validators, receiving rewards depending on the share they own. ZHCash supports the decentralized DGP management protocol, which determines the parameters of the blockchain using a smart contract and strives to make the number of forks minimal. 

 

In other words, developers do not need to create a branch for a new network to change the mechanism of the protocol, which makes the ZHCash blockchain flexible for improvements. For comparison, let’s give as an example Ethereum, which is not the original blockchain, but it’s a hard fork. The original protocol was renamed Ethereum Classic. For further changes, developers will combine Ethereum with the Beacon Chain network to form a new platform. This approach makes the development of blockchain tough and only complicates the process. At the same time, developers in any case have the right to create new branches if they want to create a new platform based on ZHCash.

Polygon 

Polygon Network, formerly known as Matic, is a scalable decentralized network that provides frameworks for creating a multi–blockchain ecosystem of blockchain compatible with Ethereum. The platform is also called the “Ethereum blockchain Internet”. The Polygon platform solves the problems of scalability of blockchain, as well as slow and expensive transactions without compromising network security. The protocol works on the principle of a modular “security-as-a-service” and resembles the Cosmos Network in structure, since it is aimed at the compatibility of blockchain, but in the Ethereum network. Why is Polygon one of the best blockchain for staking? The Polygon platform is based on Ethereum, the largest ecosystem in the field of DeFi, which is supported by a large community of crypto enthusiasts. Developers are constantly working to improve the network and strive to provide a scalable solution that will allow instant and cheap transactions.

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