Tezos made big waves recently by announcing that staking was available for Tezos (XTZ) coins. What exactly is staking, you are probably wondering? Staking, in this case, involves making x amount of your coins illiquid for a period of time and thereby earn interest (paid in XTZ) In other words, I could stake 20 XTZ for 1 year and earn 1.400 XTZ. At current market value that would be $1.71 earned on a $24.40 investment. 7% earned just for holding on to your investment ain't too shabby. That is not including any gains to the underlying value of the coin.
I assume most of you know about the power of compounding interest, now just imagine earning interest on an asset that has the potential to grow in value organically. There are a growing number of Altcoins that can be staked and percent yield varies from less than a percent to over 150%. Risk varies and all Cryptocurrencies are highly volatile so do your own research, but there are a number of folks looking to turn crypto staking into a stream of income.
Speaking of income, Coinbase also announced they would gladly stake your XTZ on their exchange... for a piece of the pie of course. If you stake on Coinbase you earn 5.6%, but literally, do not have to do anything in order to stake that asset and begin earning. If that sounds like your cup of tea, click here to purchase XTZ on Coinbase. (If you sign up and purchase or trade $100 or more we both get $10)
Right now the 3 most reputable Altcoins that can be staked directly are XTZ 7% XLM 1% and EOS 1.84%. All three are in the top 100 cryptocurrencies, each has great use cases, and all 3 will eventually find their way into my portfolio, so I may as well earn some interest in holding them.
Unfortunately, staking proceeds are taxable in the US. From Coinbase "US customers who are subject to US tax reporting are required to report their earnings from Staking rewards. US customers that earn over $600 in Staking rewards will receive a 1099-MISC from Coinbase. You can learn more about the 1099-MISC on the official website of the IRS"
While I am of the taxation is theft crowd, I would still rather earn money to be taxed on than not have the money at all. 75% is a whole lot more than 0% any way you slice it.
Is there a Proof of Stake coin you really like? Drop me a line, and tell me about it.