The Top Proof of Stake Cryptocurrencies for Generating Passive Income

In the realm of cryptocurrencies, two primary consensus mechanisms prevail – proof of work and proof of stake While there are some variations and hybrid models, the core of the crypto ecosystem relies heavily on these two protocols. From an income perspective, they can be viewed as sources of active and passive revenue. Proof-of-work often gets a bad rap as doing work for the sake of work itself. Essentially, it's about solving complex algorithms to mint new coins, which demands considerable computing power and electricity that's costly to the environment to generate distinct cryptographic hashes. This system ensures that resources like computational power and energy costs control coin creation, preventing inflation from running rampant.

On the flip side, proof of stake is a less energy-intensive method for generating income. It rewards holders for performing vital functions on the blockchain by locking up significant amounts of their coins, thus contributing to the security of the blockchain by dispersing control among several stakers. It also encourages smaller investors to hold onto their assets, rather than risking them in the market.

We're set to explore the state of proof of stake as it was in 2018. While determining the 'best' proof-of-stake coin is subjective, we'll be evaluating various criteria such as staking requirements, potential revenues, user-friendliness, and more to sift through the options. By the end, we hope to pinpoint a selection of proof-of-stake coins that can offer investors some degree of passive income.

The coins are arranged randomly to avoid suggesting any biases or preferences. A brief overview will be provided at the conclusion.

NavCoin

NavCoin emerged as an open-source spin-off of Bitcoin in 2014. It's one of the earliest to embrace proof-of-stake and reliably yields around 5% annually. There's no staking minimum, but larger stakes typically lead to greater and quicker rewards. For instance, staking a modest 50 NAV could take anywhere from 150 to 200 days for a block reward. Remember, this 5% assumes your wallet is online and actively staking year-round.

Dash

While not a pure proof-of-stake coin, Dash uses a masternode system allows holders to earn dividends, aligning it with traditional proof-of-stake investments. The returns are quite substantial, up to 7.5–8.4%, besides any value gained by the coin itself. However, becoming a masternode is costly, requiring at least 1,000 DASH, equating to about $162,000 as of October 2018.

NEO

The so-called “Chinese Ethereum,” NEO offers proof-of-stake capabilities along with smart contracts. Much like Ethereum, it serves as a prime platform for launching decentralized applications and ICOs. NEO and its counterpart coin GAS can be staked, but only through a personal wallet, unless you're on exchanges like Binance or Kucoin. Not all wallets are suitable, so verify compatibility to earn GAS rewards. Annual returns range between 4–6%. NEO is particularly interesting as it can't be fractionally divided—the smallest unit is 1 NEO, which is also the staking requirement. NEO is akin to owning a stake in the blockchain, whereas GAS functions as the fuel required for blockchain operations.

PIVX

PIVX is a fork of Dash, known as Private Instant Verified Transaction, launched in 2016. PIVX offers masternode operation for those willing to invest 10,000 PIV, roughly $12,000 in October 2018, or just simple staking. There's no staking minimum, but the wallet must be continually active. Masternode holders can expect an average return of 5.5% annually, while those who simply stake may see about 4.8%, per PIVX's guide. They clearly explain the randomness in the staking process, often likened to a lottery where the number of coins is akin to holding lottery tickets.

\"The reward system inherently includes randomness for security. Calculations may be complex,\" the PIVX team explained. \"Expect a masternode reward roughly every 1-2 days, varying based on active masternodes. For staking, the rule of thumb is 1 reward every 30 days for about 1,000 PIV, but remember it's randomized—you might have none for 15 days, followed by multiple in a day.\"

Lisk

Lisk is reminiscent of Ethereum for everyday users due to its decentralized app scriptures. Unlike Ethereum, Lisk employs JavaScript for applications, broadening its user reach. Its delegated proof-of-stake diverges from standard proof of stake. Users stake LSK to vote for delegates. Only the top 101 delegates are block creators and earn staking rewards. How these rewards are shared with voters depends on the delegate, ranging from 6.25% to 100%. Given these nuances, it’s advisable to use the Lisk Nano wallet and consult Lisk guides before starting. There's no minimum stake, but a vote costs 4 LSK, suggesting holding 200 to over 500 LSK for worthwhile returns. The LSK token was about $3.10 in October 2018.

Reddcoin

Reddcoin is a unique player in the space, created primarily to facilitate tipping across social media. It offers a staking option with yearly returns around 5%. There's no minimum threshold for staking, but realistically, to achieve the 5% return, one might need as much as 200,000 RDD. The good news is, with prices around $0.003193 per RDD, acquiring 200,000 RDD would cost approximately $640.

VeChain

The latest iteration of VeChain Thor endeavors to emerge as an enterprise-grade decentralized application platform, positioning itself as a formidable competitor against Ethereum. Its ecosystem involves two tokens – VET, the core VeChain token, and THOR, akin to THOR Power token. These mirror NEO and GAS.

By holding VET, users can generate THOR through staking, similarly to how GAS is generated from NEO. No minimum is required to start earning THOR, and some exchanges even support THOR generation by simply holding VET in their wallets. The pure staking rewards are more modest, around 1.68%, though VeChain offers a masternode option at 10,000 VET.

Okcash

Okcash has been a steadfast presence in the crypto world since 2014. It boasts a notable staking ROI of up to 10%. There's no minimum for staking, however, keeping the wallet open is necessary, as with most proof-of-stake coins. OK was designed to facilitate micro-transactions, unlike bigger cryptocurrencies like Bitcoin.

\"The Okcash mobile app makes it seamless to send tips, share OK, or make purchases on the move,\" the team highlighted. \"Payments are straightforward and swift, utilizing QR codes or direct address input, eliminating sign-ups, card swipes, and PIN entries.\"

This clearly focused application showcases a key aspect of staking; rewards typically come in the staked currency, so it's prudent to stake in a coin you believe in. Simply put, staking a currency without confidence in its future can be a futile exercise.

ARK

The Ark project distinguishes itself as a bridge builder, rather than a dominant currency contender. The Ark initiative connects various blockchains using SmartBridge tech, functioning like smart contracts bridging different protocols such as Bitcoin and Ethereum.

Ark's approach is notable for using a delegated proof-of-stake system, as seen in Lisk, a direct descendent of Ark's framework. Rather than direct staking, users' ARK is used to vote for 51 delegates, who then share rewards with voters. Common voter rewards hover around 10%, though some delegates offer 90–100% of their rewards to voters, who distribute remaining rewards based on vote weight.

Discover the Top Proof of Stake Cryptocurrencies for Generating Passive Income

KuCoin Shares

We're diving into the proof-of-stake arena in 2018, examining which cryptocurrencies are the best choices for passive income. exchange KuCoin The cryptocurrency domain primarily recognizes two consensus protocols –

Bean Cash

. Ignoring hybrid and niche variations, these two strategies mainly chart the cryptosphere's course. From an income perspective, they can be viewed as active versus passive revenue streams. Proof-of-work is frequently criticized as 'work for work’s sake,' as it demands significant computational resources and

Why Stake?

energy-intensive electricity

to form unique cryptographic hashes. This ensures a cost, in terms of both computational power and energy, controlling the minting of new coins, thus preventing inflation from spiraling. the Nimiq project or NIM Proof of stake stands out as a more passive income approach, also favoring electrical efficiency. It rewards those who hold coins by allowing them to perform vital operations on the blockchain, often involving committing significant quantities of their holdings. This aids in maintaining blockchain security by promoting decentralized ownership among numerous stakeholders. It additionally encourages smaller investors to secure their coins instead of risking them in open markets.

Read: Proof of Stake Cryptocurrencies

Let's look at the proof-of-stake landscape in 2018. While defining the 'best' proof-of-stake coin can be tricky, we'll consider staking prerequisites, potential earnings, convenience, and other elements to spotlight certain coins. We aim to find proof-of-stake currencies that might offer investors a chance for passive income. ASIC running full blast Coins are presented randomly to maintain fairness and avoid bias. We'll summarize our findings afterward.

originated from a 2014 Bitcoin fork, adopting proof-of-stake early and remaining a trustworthy option for annual earnings around 5 percent. No minimum staking limit exists, though the more coins staked, the greater and swifter the rewards. A modest 50 NAV stake might need 150 to 200 days to earn a block reward. The 5 percent estimate presumes constant wallet operation, 24/7, throughout the year.

enables holders to enjoy dividends, making it comparable to traditional proof-of-stake coins from an investment perspective. It offers significant returns up to 7.5–8.4 percent, plus any price rise in the coin. A primary barrier is the substantial initial investment to establish a masternode; as of October 2018, this required 1,000 DASH, equating to roughly $162,000. There are plenty of speculators is uniquely positioned as a proof-of-stake coin with smart contract functionality, resembling Ethereum, and thus serves as a launching pad for decentralized applications and initial coin offerings. a masternode , along with its sibling coin GAS, can be staked, though only in self-hosted wallets except for some exchanges like Binance and Kucoin. Wallet choice is crucial since not all are equipped to generate GAS rewards. Annual rewards fall between 4–6 percent. NEO differs from other cryptos as it cannot be fractionally divided below one unit – the smallest amount required to stake. Regarding NEO versus GAS, think of NEO as an ownership stake in the blockchain, while GAS is like fuel that powers blockchain operations.

, standing for Private Instant Verified Transaction, branched from Dash in 2016. PIVX owners can either operate a masternode, necessitating 10,000 PIV or about $12,000 by October 2018, or stake without a minimum. Masternodes yield yearly returns around 5.5 percent, while simple stakers see about 4.8 percent, PIVX's staking guide explains. They’re transparently forthcoming about the lottery-like randomness that defines staking, where crypto holdings function as tickets in a draw.

References

1. https://medium.com/@bocyaj2012/nav-coin-proof-of-stake-informational-guide-71c9c3417212
2. https://www.reddit.com/r/dashpay/comments/6kjg1t/what_are_the_methods_of_staking_in_dash/
3. https://www.finder.com/neo
4. https://cryptosis.io/best-proof-of-stake-coins/
5. https://pivx.org/reward-system/
6. https://www.reddit.com/r/Lisk/comments/7owgsd/is_it_worth_staking_less_than_200_lisk/
7. https://www.reddit.com/r/reddCoin/comments/7wp042/how_many_rdd_coins_allows_for_regular_staking/
8. https://thorcalculator.com/
9. https://okcash.org/okcash-for-individuals.html
10. https://arkdelegates.io/