While the best-known virtual currencies such as Ethereum (ETH) and Bitcoin (BTC) operate on the basis of proof of work, there are others which use proof of stake. With proof of work expensive ASIC-based or Graphical Processing Unit-based mining rigs are applied while with proof of stake coins ordinary computers running software that is not computationally intensive are used.
All that users are required to do is attach their stake which is basically some amount of the virtual currency that you are putting up to act as proof that the right software is being used and that you are not trying to game the system. Those who are caught cheating lose the amount they had staked. Consequently those who hold on to the cryptocurrency get to earn some interest on their stake making digital currencies an asset that generates yield rather than one that doesn’t such as gold.
Low-interest rate environment
Coming at a time when there is a lot of money that is chasing yield across the globe, especially considering that in some countries interest rates are at zero or negative levels, proof of stake coins can generate healthy returns. This has to be done carefully though as it is a nascent industry and there is no proof yet that it can be done at large scale. Some of these POS coins can give annual yields of between 3% and 8%.
Below are some of the Proof of Stake coins that have stood out as being among the most profitable.
This Proof of Stake cryptocurrency was started four years ago with the goal of being used for micro transactions. The annual yield of OKCash (OK) is 10%. To stake this currency the OKCash Desktop Wallets have to be used.
NEO has been dubbed the Ethereum of China since it is the first open-source blockchain project in the world’s most populous country. As a virtual currency it exists on the blockchain of NEO. Besides NEO the open-source blockchain project possesses another crypto-token known as GAS which has an annual return of approximately 5.5%. The primary staking wallet of GAS is the NEON wallet.
3. NAV Coin
NAV Coin (NAV) has been in existence for a period of four years now and is based on the core code of Bitcoin. Some of the features of this POS coin includes optional privacy offered by dual blockchains and faster transactions. The annual yield of NAV Coin is around 5% and to stake this digital currency NAV Coin Desktop Wallets have to be used. Interested parties can stake as much as they want as there is no cap.
The goal of Reddcoin (RDD) is to become the cryptocurrency used on social networks for tipping purposes. This has been achieved by Reddcoin integrating a virtual currency platform with major social networks. Reddcoin’s annual yield is approximately 5%.
PIVX is acronym for Private Instant Verified Transaction and as the name suggests is focused on security and privacy. The annual yield of PIVX is around 4.8%.
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