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How do you earn Algorand?

learn to earn algorand

February 9, 2021 | 

3595 Views | 

JOHN K MWANIKI | 

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The cryptocurrency market has helped millions of people to generate plenty of wealth. There are many cryptos available in the market. As a result, it can be challenging to find the best cryptocurrency to invest in. Algorand is one of the top 100 cryptocurrencies available in the crypto world. It is a proof-of-stake blockchain platform that seeks to solve the blockchain trilemma. Create a decentralized, secure, and fast ecosystem. This platform aims to create a decentralized, secure, and fast ecosystem. So, how do you earn algorand?

Ways to earn algorand

Are you interested in investing in and earning algorand? You can mine popular cryptocurrencies, like bitcoin and ethereum, using various computing hardware. But, it is impossible to mine algorand in this manner. Through its proof-of-stake consensus mechanism, investors can earn algorand by staking it in its wallet

Staking allows crypto users to earn an income passively by confirming transactions on the crypto network. Algorand is one of the most popular cryptocurrencies that offer staking. This involves holding the crypto in a cryptocurrency wallet in support of the network's operations and security. In other words, it is locking up cryptocurrencies in a wallet to earn rewards. So how can you start staking to earn algorand.

How does staking work?

Staking is as profitable as trading or mining cryptocurrencies. It does not come with the associated risks of trading and mining. All you have to do is buy and hold ALGO tokens in your wallet to add them to the mining pool. The actual profits derived from staking depend on the duration and how much you invest. As a general rule of thumb, the more you stake, the more you earn from staking. 

Additionally, there are several factors to consider if you want to increase your staking profits. First, you must always track the coin price or value. As a general rule of thumb, you should not stake a coin with high volatility. Although you can make high staking rewards from such coins, their value will drop quite fast, leaving you with low profits. Thus, it is better to stake a coin with low volatility.

As mentioned earlier, algorand is a pure proof-of-stake blockchain platform. It creates and verifies new blocks through the staking process. Proof-of-work blockchains depend on the mining process to add new blocks to the blockchain platform. Staking is the buying and holding coins. The process allows a random selection at specific intervals by the protocol to produce a block. Usually, crypto users who stake larger amounts have better chances of being the next block validator and receive a reward.

Upon selecting a node to create a new block, it begins by verifying each transaction in the block, ascertaining their validity. Upon validation, the node will forge the new block and add it to the blockchain. Consequently, the node will receive a reward in the form of transaction fees.

ASIC mining, which is a popular mining method, requires a significant investment in computing hardware. On the other hand, staking needs a direct investment in the crypto itself. It is also vital for validators to ensure their stake is secure by keeping the funds in a wallet. Algorand has an official algorand wallet and an Exodus Algorand staking wallet. These wallets allow anyone to perform diverse network functions in return for staking rewards.

How does the Algorand staking reward calculator work?

Before you invest and earn algorand, it is advisable to check your expected staking rewards. Using an algorand staking rewards calculator, you will have an estimate of your earnings from staking ALGO

Calculation of staking rewards occurs by dividing the staking reward ALGOS for that specific period by the total number of ALGOs from all participants. The count happens only once per reward period, usually at the beginning. 

The algorand staking program

In August 2019, the Algorand Foundation offered 200 million ALGO staking rewards to its subscribers. The program received plenty of attention from the crypto world and was fully subscribed to by the due date. Interested participants were to register and qualify by filling in a KYC by February 23, 2020. This was to verify their eligibility to receive the staking rewards. Coinlist was responsible for performing the KYC beginning September 9, 2019. 

Upon verifying the account, users must ensure they maintain the least wallet balance throughout the whole duration. The algorand foundation has specific guidelines for users to ensure they remain qualified for the entire program. The project should take about two years. 

If a user becomes disqualified, the balance in the algorand wallet drops, the staking rewards they would receive remain in the staking pool. It is then distributed to the remaining eligible users, giving them a larger distribution share. 

Algorand rewards

As mentioned earlier, it is possible to earn income from proof-of-stake blockchain platforms, like algorand, passively. Generally, every verified address with 1 ALGO or more is capable of receiving rewards. The current yearly yield on algorand is about 5% to 6%.

You can claim algorand rewards every time a transaction occurs from or to your account. According to the foundation, disbursement of rewards occurs every 20-40 minutes. Upon claiming your rewards, you will receive a global balance in your account. Going by this, it is safe to say that algorand is a good investment

Conclusion

You can earn algorand by merely holding the coins in a suitable wallet. While there are many staking-based networks, algorand remains the most dominant. Although ethereum also seeks to become a proof-of stake blockchain, algorand shows impeccable potential to remain at the forefront of this list. It is effortless to stake ALGO, meaning anyone can do it from anywhere in the world. 

It is also crucial to ensure that you hold your algorand coins in a high-quality wallet to safeguard your investment. So, if you want to enjoy algorand's rising popularity, it is advisable to take part in algorand staking now.

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