Staking cryptos. Can't lose?

[LostInABlizzard]

I've recently delved into crypto and have been reading about "staking". Has anyone done this? It seems a no-brainer—one of them (on Binance) is currently offering 30% interest for a 90 day stake.

What's the catch?

I’m new to the space too but from what i gather some stakes are locked in for an amount of time eg 30/60/90 days and others are not (flexible savings) so the catch is that if the coin drops in price you cant do anything but wait until the staking period is over to cash in your coins, the high % reflects the risk of that length of staking i guess.

I've done a bit of staking

as @makingmiracles says, there is the risk of a coin price falling (possibly even to zero), and the risk of an exchange being hacked (although binance is quite respected, this is crypto).

Above all if you are staking through a platform, you do not hold the private key to any crypto you stake, although that is much simpler than staking yourself and often there are minimum staking limits which can be v. high, not having the private key to your crypto is a risk.

For a newbie with small capital it should be fine, but f you have a lot of capital in it, or are willing to put a bit of time into exploring take a look at staking on defi, where you can retain private key control.

If you don’t know what you are doing, all of this is unregulated and you are risking all your capital. Avoid. It’s not a scam, it’s just wide open to abuse. Some people have made millions, but good luck if you risk it.

Yes @Bard6817 that’s very true.

Never invest more than you can afford to lose and do your research-read white papers and research as much as you can about the coin your investing in. Don’t invest in shitcoins ie xrp, safe moon, elongate, dodge etc etc
And don’t invest small amounts in bitcoin, the sheer value of it at present means a small investment is unlikely to handle the volatility- it can swing up/down by thousands a day, wiping out small investment on downswings.

Also the other risk to staking is your coins are on the exchange and potentially at risk, cold storage is always a better option, a ledger nano is what i have. As they say, not your keys, not your crypto.

@makingmiracles

Yes *@Bard6817* that’s very true.

Never invest more than you can afford to lose and do your research-read white papers and research as much as you can about the coin your investing in. Don’t invest in shitcoins ie xrp, safe moon, elongate, dodge etc etc
And don’t invest small amounts in bitcoin, the sheer value of it at present means a small investment is unlikely to handle the volatility- it can swing up/down by thousands a day, wiping out small investment on downswings.

I'd disagree.

It is much better to exchange small amounts regularly than a lump sum all at once.

makingmiracles What are "shitcoins"?
I had a flutter with XRP yesterday and made a small profit. Got back out now though. (I have no idea what it is / for!)
I doubled my money on Decentraland a few weeks ago too.

Lump sum investing Vs Pound Cost Averaging.... Both have their benefits.

Lump Sum = Buffett style - can reap huge gains.

Pound Cost averaging (small regular amounts) - can reap huge gains.

Crypto - can reap huge gains.

And of course - the opposite can be said o fb all of the above.

@Cailleachian i think you got lost in what i meant, i mean small amounts in bitcoin-not alt coins- can be lost, for instance if you invest £500 in bitcoin and then btc loses £1500 in value over 24 hours, that’s your money gone. People who can afford to invest in bitcoin successfully are the ones who have enough capitol to invest into it to be able to weather the highly volatile up and downswings.

Altcoins are another matter, most people dollar cost average, small amounts here and there, many are very affordable.

@LostInABlizzard lol just my on opinion really, but general consensus across crypto communities, just watch out for pump and dumps and rug pulls. I’m heavily into vet, it has really good devs, real world uses and is being trialed by big companies like pws, aws, bmw, walmart, just to name a tiny amount. It’s ridiculously underpriced and predicted to hit $1 this bull run although some say it could easily do what xrp did in 2018.
Investing in coins you don’t know what they are for is a little risky!

@makingmiracles thats not how it works.

Say 1 btc = £50K,
If you put in £500, you will get 0.01btc.

If Bitcoin then drops to £40k, you still have 0.01btc, its just that its now worth £400 rather than £500. Even if bitcoin drops to £1 each, you would still have that 0.01btc which wouldthen be worth 1p.

Bitcoin cannot fall to £0 per bitcoin because there are market orders at 1c that are greater than the entire amount of bitcoin in the world.

How you can lose all your money is through margin trading. Do not margin trade unless you are very sure that you know what you are doing. It is very risky and there is the very real risk that you could lose all your bitcoin.

Or countries will devalue BTC by creating their own (China) or Banning it (8 now.).

Make your money & get out. If you think countries will accept this as a country for much longer, it’s simply too independant and they would lose fiscal controls.

Make your profits and get out.

@Bard6817

Or countries will devalue BTC by creating their own (China) or Banning it (8 now.).

Make your money & get out. If you think countries will accept this as a country for much longer, it’s simply too independant and they would lose fiscal controls.

Make your profits and get out.

They cant create their own bitcoins tho, because bitcoin is by necessity the most secure, to make a more secure one, you would have to go back in time.

It cant be banned because it is permissionless, borderless, censorship resistant, neutral and decentralised.

Bitcoin isnt really about money or profit at all. its just that people are realising how valuable bitcoin is, so offering you more money for it.

How can you ban a digital coin? Loads of countries have tried to "ban" apps or websites, it never works, people always get around it. You can get around the Great Firewall of China with a VPN.

I'm currently staking about £55 worth of CAKE in Pancakeswap. I've accrued about 20p in 1.5 days, which isn't bad! (Each CAKE currently priced at about £20). Basically you get paid in whatever token to keep your token on that exchange, the APR for this one is something like 95%. The payment comes from transaction fees and newly mined coins.

Obviously the risk is that Pancakeswap gets hacked/disappears, or that the CAKE token goes to £0, which is why I wouldn't put your life savings on it....

I don't know what staking is, but I invested in Ethereum 20 days ago and have gained 30% profit already.

@LordOfTheOnionRings

I don't know what staking is, but I invested in Ethereum 20 days ago and have gained 30% profit already.

Staking is when you lock your tokens and in return receive more of them.

Ethereum is moving to staking as its main way of producing more ether as of the London Upgrade (EIP 1559), scheduled for July. Ethereans are pretty excited about this, and the details of the EIP 1559 mean that it is likely that eth will grow ever more scarce (so people are calling it "ultra sound money", compared to bitcoins "sound money".

A lot of staking solutions have no actual purpose but ethereum is different, as the staking secures the network through staked validators who check the transactions and keep the network honest. If they behave badly and pass through faulty transactions or are lazy and dont keep validating the transaction, their staked ethereum is "slashed" (ie the ethereum protocol takes some of their eth as punishment), if they behave well tho, they are rewarded with approx 20% extra eth per year.

It costs a lot to run a full eth validator node (32 eth, approx £100k at the current exchange rate). However there are various solutions for smaller holders to also stake.

Centralised exchanges like Coinbase and Binance will stake the eth in their vaults and pass on some of the rewards to people who have eth in their system, but thats likely to be pretty small.

Decentralised solutions exist, the best known is probably RocketPool, (www.rocketpool.net/) where you can run a validator node with just 16 eth rather than 32 and other people can make up the difference, and also receive staking rewards.