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Does Bitcoin Grow In Blockchain Wallet? (What does?)

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Since cryptocurrencies want to be analogous to money, one question gets raised: do they grow when they are kept stored in a wallet?

After all, fiat money allows you to make a profit by keeping it safe on a bank account.

Does bitcoin grow in blockchain wallet?

No. It can’t grow in your wallet if you just leave it there without doing anything with it. Crypto coins and wallets work differently than fiat money and bank accounts. So, to make your crypto “grow” in your wallet, you need to be active about it.

Depending on the type of bank account you have, you might have already seen your money grow between months.

That happens because when you signed the contract, you gave the bank authorization to use your money while it is not being used by you. They borrow your money without ever letting you without it. Then, you get interest off of it.

The same thing doesn’t happen with Bitcoin and wallets because they work very differently from fiat money.

If you just leave your bitcoins in a wallet, they simply stay there, and you can use them to buy things, trade them for other currencies, or withdraw them in the form of fiat money.

Read How Does Bitcoin Know Your Balance?

However, this conversation doesn’t end here. There is more than one way to make a profit off your bitcoins when they are in a wallet.

How can cryptocurrencies grow in wallets?

Even though leaving your bitcoins (and other PoF coins) in a wallet doesn’t make them grow instantly, there are some wallets out there that let you earn interest upon your savings.

You can do that on Binance, Coinbase, Gemini, BlockFi, and many other wallets.

The screenshot above is from the Coinbase Wallet app. There is an option inside the app that lets you lend your coins with smart contracts.

As long as your money is being borrowed, you will receive interest. Interest is not always the same, but you can rest assured that you will get something.

The app shows you how much APR is applied on each different coin.

On some wallets, you can see the projection of how much money you will make with the coins you are investing. Here is how it looks on Gemini:

APY means Annual Percentage Yield. Gemini says that “APY may change at any time before or after an account is opened. This calculator is for illustrative purposes only and may not apply to your individual circumstances. Calculated values assume that principal and interest remain on deposit and are rounded to the nearest dollar. All APY’s are subject to change.”

However, earning interest on your crypto coins is not the only way to make money off your cryptocurrency savings. Check the next topic.

How does staking work?

Staking is an alternative to mining as a validation process. Staking is the process of actively participating in transaction validation on a proof-of-stake (PoS) blockchain.

On these blockchains, anyone with a minimum-required balance of the cryptocurrency can validate transactions and earn staking rewards.

Once there is a minimum balance, a node will deposit some crypto coins/tokens into the network. This is the stake.

Read Is Staking Crypto Worth It?

When staking tokens, a user locks their coins into their chosen PoS blockchain. The tokens are used to achieve consensus, which is needed to keep the network safe during each new transaction validation process.

The stake’s size is directly proportional to the odds of the node getting picked to create the next block.

If the block is successfully forged by the node, a reward is sent to the validator. This is similar to the reward given to miners.

If validators double-sign or try to attack the network, they lose part of their stake.

Which crypto are most profitable to stake?

This might have already changed by the time you are reading this article. After all, cryptocurrencies’ values fluctuate all the time.

Let’s check which are the most profitable cryptocurrencies to stake in May 2021.

Akash Tokens

Akash tokens (AKT) are issued on the Akash network. These tokens are utility tokens used to govern and secure the blockchain.

The Akash network seeks to be multi-currency and multi-chain.

Akash has one of the highest staking rewards, going up to 58%. You can stake it on Keplr wallet.

Raydium

Raydium (RAY) runs on the Solana blockchain providing on-chain liquidity to a central limit order book. You can stake it to earn nearly 50% APR.

A Solana wallet like Phantom is required to stake RAY.

BNB

Binance is a popular exchange that has its own coin, BNB. You can earn up to 30% by staking with it.

There are two main ways to stake with BNB. The most popular is through BNB Vault. This method is available on Binance exchange. Here you can know everything about it.

You can also stake BNB with Trust Wallet. Trust Wallet is a mobile wallet, and you should be aware that mobile wallets are not as safe as other types of wallets. Read How To Transfer Crypto From Exodus To Trezor.

Still, staking BNB with Trust Wallet can be highly rewarding.

NOW

The NOW Token is issued by the ChangeNOW crypto exchange. Initially, the token only existed as an ERC-20.

Right now, however, it also figures on the Binance Chain. And, lately, it became possible to stake NOW. You can gain up to 25% on interest by staking NOW.

Flow Token

Flow is a blockchain used for games and NFT. Right now, there is a perspective that you can earn up to 20% a year by staking Flow tokens.

There are three methods to stake Flow tokens:

  • Kraken exchange
  • Coinlist
  • Blocto wallet

Neblio

Neblio is a sort of more complicated cryptocurrency to stake. However, there are good guides out there to help you get access to the coin and stake it.

And it also compensates, as the annual return can go up to 10%. It is not skyrocketing but is not too low as other coins.

You need NEBL staking wallets to stake it. Here is a helpful guide to get started.

DASH

DASH isn’t a fancy cryptocurrency used for many different purposes. It grounds itself on the idea of being a digital currency to replace everyday money and works very well like that.

More than that, it was one of the pioneers in letting users stake and make a profit off it.

Reaching the end of the list, profits start to drop. Staking DASH isn’t very profitable compared to other coins on this list, giving you an annual return of only 7,5%.

Tezos

Tezos (XTZ) is listed here because it is easily accessible. It is a paradigmatic blockchain because it is one of the first PoS crypto coins supported by major exchanges.

As you have seen from the coins listed above, they require you to create accounts at many different exchanges.

Tezos, on the other hand, is supported by Coinbase, Binance, Gate.io, and Atomic Wallet. You have zero fees to stake on Binance. The annual return, however, is a bit low, only around 6,8%.

How do you start staking Cryptocurrency?

General considerations

Contrary to mining, staking won’t require special hardware. This might make it look like staking is cheaper than mining. The truth about this is relative to the token you want to stake.

As with PoW coins, PoS coins also vary in price. Some are very cheap, and some are very expensive. And sometimes, even if one single token is relatively cheap, you won’t be able to stake with one single token.

To mine a block of any PoW cryptocurrency you don’t need to start buying that currency. You need the hardware to validate transactions, and from that point on, you will have coins.

Staking, on the other hand, requires you to have access to tokens from the start (note that we are using coins and tokens interchangeably, but they are not the same in all cases).

Choosing a currency

Because of the necessity to acquire tokens to start staking, you need to check the profitability of tokens (as shown on the topic above) and how much each token costs.

To find out how much a coin/token is worth right now, you can check CoinMarketCap. Upfront, you will see a list of the most traded coins at the moment. But you can search for any cryptocurrency you want to see.

If none of the tokens showed on the topic above sounded good enough for you, you can look online for cryptocurrencies you can stake.

Pay attention to how many tokens of a currency you need to start staking it. Each currency requires a different minimum amount. That will determine how much money you will invest at the start.

Wallets and DCEs

When you choose your token to stake, find out which is the method to stake it. Some can be staked on wallets, and others can be staked on digital currency exchanges (DCEs).

If you need to create an account at a DCE to stake, pay attention to fees. Some DCEs will charge you fees for staking while others won’t.

Hardware

Usually, staking requires the stake to be connected 24/7. A common desktop computer can do the job, as it only needs to keep connected to the internet.

Some people use a raspberry pi to do it as it consumes less electricity. Another option would be running on virtual private servers (VPS), which is a cloud option. VPS doesn’t require you to be connected all the time.

Final Thoughts

Simply holding coins can be profitable too. More than that, the staking method is less power-consuming and has a different safety approach.

Some people are worried that the carbon emission of PoW blockchains might damage the environment, so PoS blockchains might be the future of cryptocurrency.