Is Staking Cryptocurrencies More Profitable Than Mining?

Okay, a lot is going on in the crypto market these past few months and everyone is thinking about a few things – is it still worth staying in, will it be OK or should I mine or stake?

All of you that are in crypto for some time already know what mining is, and we will not cover that today, but we will talk a bit about staking since not many of us opted for this option. What many are interested in is if the staking works and if they can turn around any profit with it?

Today we will address staking and we will discuss which is more profitable the standard mining or staking. Before we do that we must explain what staking is all about. What you need to understand is that you will have to deposit, or lock away some funds, in this case, stake coins on your computer that is connected to a network. After you do this you have made a stake and turned your computer into a node, in technical terms.

In this case, Stakers don’t mine anymore, they forge blocks and thanks to several factors like how much money was staked, for how long as well as randomisation it is determined who will forge the next block of transactions. The reword for the winner, and his contribution to the network is in those beloved crypto coins. If you need a bit more explanation try staking crypto, while we will focus on the topic at hand from now on.

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So we all know that mining brings you income in cryptocurrency over time. We also know that you have to have some expenses before you make money mining, and they come in a form of hardware, electricity, and space if you don’t have on set for your mining operation. Now before you start mining you should do some math to see if it can be profitable at all. It would be silly to start mining to just break even or if not calculated well start going into debt. Math is important and it tells you if you are profitable and by how much.

The usual math needs to have a GPU that can do a certain amount of hash rate than you have to have your GPU price, and you need the wattage to calculate your daily or monthly profits. If this all pans out and you are in green then great, if not you have to think of another solution that will bring you income, or it doesn’t even payout to start at all.

This is probably the part that fends off many of us because until you do the raw math you actually can’t see what you can get and just how much you lose. To be perfectly honest some countries have insanely low electricity prices, as well as hardware prices, and any type of mining operation manages to pay off, but in countries where you have to pay 2/3 of your mining income for electricity, it doesn’t sound very appealing, does it?

Now the alternative to this entire thing would be staking right? Well, let’s see if it is more profitable, or is it profitable at all.

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Now for staking you need some crypto you can invest, stake right?! We will take Ethereum for example and start staking you need to put down 32 ETH. Now, to be perfectly honest this is a huge investment upfront. At the time this article is being written the stake you will have to put in is worth $103,728.00. This is mind-blowing.

Now there is the issue of math again. Here you will enter the stake, your revenue that will be calculated in the node tab and your node costs. Now, this last thing is interesting and we will tell you why. The cost of running the node is a lot less than running a hefty mining rig or an entire mining operation. This is where people instantly start thinking that staking is a lot more profitable, but is it? If you compare the two maths you will see that staking does get you a bit bigger revenue daily but it is a huge investment up front.

Many do argue that if you take that much of an investment and put it into mining operation, not forgetting the costs that are scaled up as well, you will surpass the profits made by staking, but and there is always a but. But, what about deprecation and what about faults of mining equipment? You are using those graphic cards constantly, they are working non-stop, one or two or all eventually will stop working – die on you, your power source will die due to failure, old age, overuse and what not. What about that, ha?! Graphic cards will lose their value over time and they will not be worth a dime after you are done, plus the gamers dread these GPUs because they have been used for such a long time and you are never sure when they might fail.

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When it comes to staking, yes it needs a hefty investment, but what is important to remember is that 32 ETH is still going to be 32 ETH in the end. You are not using your stake so although your end profit is a lot smaller with staking than if you mined, or invested those 32 ETH in mining equipment, you will earn a hefty profit non less that is going to add that initial investment of 32 ETH on top. If you sit down to do the math you will see that the staking does earn you a lot more especially after a period of 2 to 5 years, and it is a lot less hassle than going out of your way to purchase a bunch of GPUs, PSU units and hooking everything up.

It certainly takes a lot fewer expenses (this goes for the countries that have much more expensive electricity), and a lot less trouble to stake than mine, which is why you all should consider doing it. If you don’t mind robbing yourself of some crypto coins, or cahs for a longer period (you are doing the same with mining anyways, just a bit different form) then staking is your sure proof of earning good money without much trouble.