For new traders picking the right Proof-of-stake crypto for investment is quite a hurdle given the complexity of the subject.
Back when Ethereum announced its shift from the consensus algorithm of Proof-of-Work (PoW) to Proof-of-Stake (PoS), this transition was thought to be new and noteworthy.
It was expected that this switch would be transformative, will reduce consumption of energy, enhance engagement and would usher into a new age of blockchain technology that would be sustainable.
Even though all these things are certainly true, however; PoS is not new and a lot of platforms use this consensus algorithm for powering their expanding blockchain ecosystems.
This transition has had considerable implications for the crypto users who are trying to decide between which PoS to stake.
This article will enable you to decide in this regard by evaluating some platforms that are promoting this approach.
There could be several reasons for which people stake a token. To make informed decisions, some factors need to be looked into.
How to pick the right Proof-of-stake crypto
First, crypto mining is a source of acquiring freshly minted cryptocurrencies via computer power and the electricity for maintaining their blockchains. So, while deciding the platform for the stake, the reward should be given topmost consideration.
Second, the admittance cost is a critical point that cannot be overlooked while selecting some PoS token. The users need to work with those platforms which are affordable for them.
Third, there are numerous blockchain networks and all are at the different developmental stages. Therefore, the user needs to find a blockchain network that fulfills all the requirements and intentions of the user.
Fourth, by examining the organizational structure and development team of a project, a lot could be learned for an informed decision. For instance, the decentralization level could indicate the stability status of the platform.
Lastly, when selecting a token to stake, the user needs to understand the economic model of a project. Moreover, factors such as the period for lock-up, staking rations and the inflation rates must be evaluated.