In recent blog posts we have been talking about crypto staking, how it works and the benefits of crypto staking. We have also mentioned that crypto staking and crypto mining have some similarities. This is mainly in the way that a reward is available to both stakers and miners.
However, you may be wondering what the difference between crypto mining and crypto staking is.
The process that miners complete is also known as proof of work. Meanwhile, the process that stakers complete is known as proof of stake.
In proof of work miners will solve complicated mathematical puzzle of cryptographies. The first miner that successfully resolves the cryptography mathematical puzzle correctly adds a block of data to the blockchain.
The mining and proof of work process requires specialised mining hardware. The biggest issue of this is that is consumes a lot of energy. This can make it very un-environmentally friendly. The miners that have the most computing power will have the most chances to solve the block’s puzzle. This will make it more likely that they will get the reward.
Meanwhile with stakers the proof of stake process participants support a cryptocurrency network by locking up some of their crypto funds. The participant in the network creates a block by staking coins on the blockchain. A lot less computing power is needed for staking when compared to mining, making it a more energy-efficient and eco-friendly solution.
The validators that have the most crypto coins staked in the cryptocurrency network are most likely to get a reward from the network.
These are the main differences between crypto mining (proof of work) and crypto staking (proof of stake). If you have the computer power, tools and technology for crypto mining then this could be the right crypto reward solution for you. However, if you don’t have the computer power and are looking for a more energy efficient crypto investment solution you may prefer crypto staking.