In traditional finance, passive interest bearing investments include CODs, bonds and money market funds. You invest a certain amount and earn interest over time.
In the world of crypto, there are cryptocurrency coin markets which produce interest as well. Similar to dividends earned by company shareholders, coin owners earn interest over time in exchange for holding their coins in a digital wallet.
KCS & BNB
Two popular examples of this process are KuCoin Shares (KCS) and Binance Coin (BNB). Kucoin and Binance are cryptocurrency exchanges which encourage traders to purchase, transact with and save their proprietary coins and enjoy trading discounts and interest earnings. The business model has proven quite successful: BNB is at the top of the crypto charts at #18 and KCS at #50.
NEO & GAS
An alternative form of crypto interest is earned by Neo (NEO) holders who, instead of earning their interest in the form of NEO, actually earn Gas (GAS). At the time of this writing, NEO is at #13 and GAS at #90 and holders are said to earn an annual interest of about 9% by holding their NEO coins in a compatible digital wallet.
The crypto interest earning process is also known as cold staking. Dash (DASH), ranked #14 and perhaps the most popular staking coin, requires the ownership of at least one masternode consisting of 1,000 DASH coins. At about $250 per coin, that’s a quarter million USD with an annual return of about 10%. The trouble is the price volatility. At $242, Dash is $1,360 cheaper than it was 7 months ago, so if you bought 1,000 DASH at say $1,000 a piece back then and you’re still holding, you’re not going to earn your 10% next January unless we see a miraculous across-the-board market recovery.
This being crypto, it’s all about reinventing ways we can capitalize our finances. There is, of course, a potential solution to the conundrum that may help calm the stormy seas of volatility and, hopefully, reduce risk.
The saying goes that the higher the risk, the higher the reward. In this case, however, it may be wiser to reduce the risk by investing only what we can easily afford to lose. One way of doing this is to search for online staking pools. Staking pools are somewhat similar to cryptocurrency mining pools. A bunch of people add their coins to a large pool and earn a share of the reward (interest) based on their share of the holdings.
Cardano (ADA), currently ranked #8, is about 90% down ($0.15) from its ATH of $1.28 back in January 2018. Staking Cardano can be done through staking pools, a staking enabled Ledger Nano wallet, or the Daedalus digital wallet. The staking process is described as a lottery with no minimums. According to CoinMarketCal, this coming September, Cardano will be accepted as a form of payment in 33,000 stores in South Korea – something that may positively influence the price.
NEM (XEM), ranked #16, is currently priced at $0.15, over 90% down from its ATH of $1.89 back in January 2018. The New Economy Movement (NEM) offers a generous ongoing marketing bounty program. Staking requires the ownership of 10,000 XEM coins and is done on the NEM Nano wallet. Staking XEM is called ‘delegated harvesting’. It should be noted that XEM is neither a PoW nor a PoS coin. XEM is a PoI (proof of importance) coin which means that the percentage of your earned interest is dependent on your trust score which in turn depends on the number of XEM transactions you conduct. The more you use XEM, the more benefit there is for the project and you are rewarded accordingly.
Lisk (LSK), ranked #25, fell from an ATH of $37,27 in January 2018 down to $4.88, a loss of over 80%. Lisk is a dApps (decentralized apps) tool for developers and is about to migrate to mainnet. The project is based in Switzerland and has an enormous fan base with 186,000 followers on Twitter alone. Like Bitshares and Waves, Lisk is planning to release its own DEX (decentralized exchange) this coming October. Lisk also has a dPOS (delegated proof of stake) system which by some interpretations is a notch too political, i.e. complicated, for the average trader/investor.
Too many cryptos?
Most cryto traders and investors want to know how much and for what length of time they have to invest to get a certain percentage gain out. That’s about it. This is one of the reasons why there are so many cryptocurrencies to choose from.
Decred (DCR), ranked #27, is currently priced at $58.98, down about 50% from its ATH of $124.40 back in January 2018. It’s a PoW/PoS hybrid and offers atomic swaps. Atomic swaps are direct, trustless trades between two parties secured by hash time locked contracts (HTLC). Staking is done via its digital wallet and is connected to its lottery like voting system. Stakes are earned through active voting which is random. The Decred project has plans for its own DEX (decentralized exchange) as well.
BTS & dPOS
It should be noted that staking in simple terms means having a stake which produces earnings and gives us a vote. One of the main features of blockchain technology is decentralization of decision making power and staking is one of the ways to achieve exactly that. Stakeholders form a consensus and vote on matters of importance.
BitShares (BTS), ranked #29 and currently valued at $0.18, is about 80% down from it ATH of $0.86 back in January 2018. BTS’ dPOS (delegated proof of stake) system works in a similar fashion as KuCoinShares (KCS). BTS stakeholders own a share of the DEX (decentralized exchange). Bitshares also feature a whopping 100,000 TPS (transaction per second) and offer things like volatility protection (SmartCoins), user issued assets (UIA), recurring and scheduled payments, and an affordable and rather generous referral program. There’s an upcoming Bitshares event in Amsterdam called BitFest and it’s scheduled to take place around September 20th 2018.
Somewhat similar to Bitshares, Waves (WAVES) has an online and offline DEX (decentralized exchange). Waves Token Launches let you create your own cryptocurrency tokens for your customer loyalty program, crowdfunding and voting. Holding WAVES in your WAVES wallet earns you a small dividend. The project also offers a leased proof of stake (LPoS) option enabling staking (earning interest) without ownership. WAVES is currently ranked #49 at $2.56, about 80% down from its ATH of $14.11 back in January 2018. Upcoming events include the Summer Road Show in Moscow this coming August.
PIVX (PIVX), ranked #81 and priced at $2.02, is down about 80% from its ATH of $13.75 back in January 2018. PIVX is a privacy coin and its features include speed and security. Staking and voting is done directly inside the digital wallet. A built-in DEX (decentralized exchange) and Invisible Internet Project (I2P) integration are in the works as well. Additional anonymity features can be found on their roadmap page. Staking can also be done using a Ledger Nano S wallet and the Secure PIVX Masternode Tool (SPMT). Between September and December 2018 PIVX has a total of five important events, most of which have to do with increasing anonymity for its stakeholders (see CoinMarketCal.com).
ANON & ZCL
Speaking of anonymity, a new PoW/PoS coin called Anonymous (ANON) is about to fork from Zclassic (ZCL) and Bitcoin (BTC) on September 10th 2018. The testnet is scheduled to be released around the 10th of August, followed by the supporting exchanges announcement five days later. A new team is taking over the ZClassic project on September 1st 2018 and there’s talk about enabling staking. ANON’s two main features are anonymity and interest earnings through masternode ownership.
Bitcoin Interest (BCI) is ranked #172 and priced at $1.87, down 90% from its ATH of $22.42 back in March 2018. The purpose of BCI is to save your coins in your BCI digital wallet and enjoy annual rewards of about 20%. BCI is an ePoW (enhanced proof of work) coin. Theoretically, the more people save their BCI instead of spending it, the more stable the price and it looks like the price stabilized at more or less $2. The project also has an ongoing referral program.
Ark (ARK), ranked #86 and priced at $0.95 lost 90% of its value in just 7 months. ARK is another dPOS (delegated proof of stake) coin and staking is done on ARK’s desktop wallet with interest earnings of about 7%.
Peercoin (PPC) has been in existence since 2012 which makes it one of the oldest altcoins (alternative cryptocurrencies) around. It is ranked #138 and has a current price of $1.98. Back in January 2018 is was worth $9.77 – that’s a loss of about 80%. According to its site, the project offers a 1% annual interest. PPC is a PoS coin, the first ever. Staking PPC is properly called ‘minting’. The project prides itself for its instant transactions and a super low transaction fee of only 0.01 PPC. Peercoin can also be mined.
XSN (formerly POSW)
Originally a multi cryptocurrency staking wallet called POSWallet, the project has been active since 2015 and is going through a revamping process which will soon include Ledger Nano S staking, a DEX (decentralized exchange), CCPoS (cross chain proof of stake) and atomic swaps.
Stakenet (XSN) is currently ranked #267 and priced at $0.27, about a quarter from its ATH of $0.78 back in June 2018. XSN is a tPoS (trustless proof of stake) coin and Stakenet is a cloud based staking pool. One of the main features is zkSNARKs, the same privacy tech used by ZClassic and ANON. In order to run a Stakenet masternode you must own 15,000 XSN, however, thanks to options like pooled staking and masternode sharing, there are no minimums required to participate and earn instant rewards. According to CoinPredictor, XSN will triple in price over the next 12-15 months. Twelve upcoming events shown on CoinMarketCal seem to explain the math. XSN is yet to be listed on a top exchange, something that may lead to price appreciation.
Linda (LINDA), ranked #340, is one of many sub-cent ($0.001454) coins crypto hopefuls who missed the Bitcoin boat dream of hitting the jackpot with. For a brief moment back in January 2018, LINDA’s price surpased $0.01 and has been on a roller coaster since. LINDA’s features include anonymity, security and speed. LINDA is a PoW/PoS hybrid and staking is done using LINDA’s digital wallet and MyNodePool.com (pooled staking). LINDA’s staking pool offers daily returns, no minimums and 96% in annual interest earnings (according to the site). Atomic swaps, dApps, merchandise and the Linda X ICO platform are in the works.
Electra (ECA), ranked #251, is a sub-sub-cent ($0.000767) coin which may or may not moon at some point in time and buy someone a lambo. Though it may come across as a joke, it’s known to have happened. The way the math works is as follows: for a coin like this to reach say #99, its market cap would have to grow to about $80 million or 4x (four times) what it’s worth now. When a coin like this goes up 100%, people start talking about it, FOMO (fear of missing out) kicks in and, before you know it, the price touches something close to $0.01 or 10x (ten times).
ECA is a PoW/PoS hybrid coin. Annual staking rewards are said to be at 50% pre-fork and 10% post-fork. Mining is n/a which is not good for the price. One look at CoinMarketCal tells us that ECA has five upcoming events this year, including masternodes and merchant payment gateway integration.
Last but not least…
When it comes to crypto going mainstream (and the crypto market recovering), upcoming decentralized social media platforms will be the driving force. The best ones will offer something that traditional social media doesn’t: advertising revenue sharing. Once masses of people around the world start earning, trading, charging and paying with cryptocurrencies on social, crypto will become as common as customer loyalty rewards. Imagine earning $15 worth of crypto per social media platform each month doing what you do anyway – times 2.5-3 billion social media users worldwide.
Two soon to be crypto/blockchain based decentralized social media platforms I’m looking forward to are Presiam (PRSM), a Facebook alternative, and VibraVid (BeatzCoin), a YouTube alternative. Both will have stakable cryptocurrency coins which will be used as participation incentives, referral rewards and platform currency in general.