Can you mine the ADA token? How to make money using Cardano Staking?

This article is all about whether can you mine the ADA token and how to make money using Cardano Staking. Let's take a look at it.

Prasanna Peshkar

Prasanna Peshkar

October 12, 2022 7:44 AM

Can you mine the ADA token? How to make money using Cardano Staking?

Cardano as a network is still growing and improving its blockchain. Its prices increased enormously during the last bull run. Yet, prices took a sharp plunge back lower with the current market crash. But that doesn’t mean that Cardano doesn’t have huge potential. This article is all about whether can you mine the ADA token and how to make money using Cardano Staking. Let’s take a look at it in more detail.

What is Cardano?

Cardano (ADA) is a blockchain network depicted by a blend of scalability, security, and decentralization. Cardano is viewed as one of the most technically grown blockchains on the market. Above all, the scientific procedure for the additional development of the blockchain assures that the network has amazing growth potential.

Cardano’s network token is named ADA. Cardano is viewed as one of the most significant competitors for Ethereum because the blockchain can execute smart contracts and is somewhat ahead of Ethereum in many areas such as efficiency and security. In the past, Cardano was often called the “Ethereum killer”.  

The further growth of Cardano takes place in various stages, which we explain in more detail in our article on the Cardano roadmap. The further expansion runs in 5 phases. Scalability is presently being developed as a component of the Basho phase. 

Can you mine Cardano?

Mining is the name given to the operation of a cryptocurrency such as Bitcoin, in which new blocks are constructed using computing power. The process continues to confirm transactions on the blockchain. Miners solve complicated arithmetic functions to verify transactions and add new blocks to the blockchain. The consensus mechanism is called Proof-of-Work.

This process has lived with Bitcoin since the blockchain existed. But there is no mining with the Cardano blockchain. Cardano does not depend on proof of work. Cardano mining can therefore not exist. Unlike Bitcoin or Ethereum, you cannot make money with mining activities.

What is the alternative for Cardano mining?

Instead of the Proof-of-Work consensus mechanism, where computing power is required for confirming transactions, Cardano has been utilizing the efficient Proof-of-Stake consensus mechanism since its birth. Instead of computing power, this also utilizes the so-called “stake” of a validator. The coins utilized and the time these coins are maintained are assertive. More information on Proof of Stake can be found here.

Proof-of-Stake is the more modern consensus mechanism. It is more energy efficient than Proof-of-Work. This has some advantages like faster transactions and better sustainability. Most modern cryptocurrencies rely on proof-of-stake. One of the first blockchains to use it was Cardano.

Can you make money with Cardano mining?

Bitcoin mining is a method to make money from cryptocurrencies. This is not possible with Cardano because the ADA tokens cannot be mined. This may not even be a weakness in 2022, since Bitcoin mining is barely possible for people due to the high mining difficulty. Mining is almost only beneficial for big mining companies with high computing power.

An alternative is Cardano staking. This is the method of verifying transactions on the Cardano network. Anyone having ADA tokens can participate in Cardano staking. It is the more profitable alternative to mining for Cardano.

How to make money using Cardano Staking?

Staking illustrates the process of providing your tokens to the network to validate transactions on the network. The more tokens you provide for staking, the higher the likelihood of becoming a validator for a transaction. In return, you get staking rewards in the form of additional tokens.

The process of staking can be lucrative. As already mentioned, Cardano utilizes the efficient Proof-of-Stake consensus mechanism, which not only keeps transaction fees low but also requests users to stake. The users who have ADA tokens can stake them and thus partake in the validation method of the Cardano blockchain.  The special thing about Cardano is that the network has the most increased staking quota of all known blockchain networks. Up until last year, around 70% of all ADA tokens in circulation were staked. 

There are essentially 2 methods to execute Cardano staking:

Stake yourself

To execute Cardano staking yourself, you require a proper Cardano wallet and must trust your ADA tokens to a staking pool from this wallet. There are two different methods to do this. The first is Daedalus. It is a desktop wallet and is advised for more cutting-edge Cardano users. The second one is Yoroi. It is more geared toward newbies. You can utilize the wallet as an extension for your browser. The method for both wallets for Cardano staking is identical. 

Via exchanges and brokers

If configuring the wallet and trusting the Cardano staking pools is too difficult for you, you can utilize certain platforms on which you can do Cardano staking. Crypto exchanges specialize in cryptocurrencies, while brokers are mostly standard platforms that also offer cryptocurrency trading.

When staking Cardano, the returns rely on a combination of elements. These contain the size of the staking pool, the pool fees, or the platform fees. Most platforms offer you 4-6% annual returns. You can also utilize a staking calculator to estimate your return. You can utilize this link to easily calculate your average returns. 

  • >>CLICK HERE TO STAKE AT BINANCE<<: Binance is the world’s biggest and most well-known crypto exchange. Cardano staking is achievable on it without any issues. In addition to Cardano, Binance has approximately 30 other cryptocurrencies to select from that you can stake. Overall, Binance presents over 100 cryptocurrencies that you can trade.
Prasanna Peshkar
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Prasanna Peshkar

Prasanna Peshkar is a seasoned writer and analyst specializing in cryptocurrency and blockchain technology. With a focus on delivering insightful commentary and analysis, Prasanna serves as a writer and analyst at CryptoTicker, assisting readers in navigating the complexities of the cryptocurrency market.

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