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Investing and earning crypto assets, what is the difference …

Investing and earning crypto assets, what is the difference ...

Fit and to earn Crypto assets seem to be becoming increasingly popular in Indonesia through a number of crypto exchanges (crypto exchange). Given that this product is relatively new, few are still confused about the differences, including the benefits and risks.

What is that Fit Crypto?

Basic concepts stumbling Crypto was first implemented in 2012 through the Peercoin project. They introduced a consensus algorithm Proof-of-Stake (PoS), as the antithesis or alternative Proof of work (PoW) transmitted by Bitcoin, after Ethereum on July 30, 2015.

If PoW relies on high-performance electronic devices and hungry electricity to verify transactions, PoS only needs a computer server (for example it costs less than the ASIC Bitcoin mining tool) and requires the validator to keepstake) a number of cryptocurrencies. This crypt is proof (evidence), that the validator is willing to participate in securing the network.

There are more and more cryptocurrencies in PoS systemsstake, which receives more crypto rewards, for its services in securing the blockchain network. While in PoW, the higher the tool specification, the higher the chance of getting a reward for each block which is validated. in PoW there is no need to store cryptocurrencies as proof of performance.

While crypto rewards are earned miner and validator comes from a new cryptocurrency that is published every time block transaction created.

The PoS system has not faded today, although Peercoin has finally lost its popularity over other projects that still rely on or are developing PoS.

Other variants have emerged from the PoS, such as Delegated proof of participation (DPoS) Tron, Cardano and Binance Smart Chain.

Ethereum 2.0 which is expected to be completed next year also relies on a PoS that is more or less similar to a classic PoS.

So, up to this point, you can interpret the advantages and disadvantages between PoW and PoS yourself.

If PoW is criticized for not being environmentally friendly because it consumes a large amount of electricity, PoS is sometimes criticized because only those with a deep pocket are entitled to big rewards.

In fact, if taken more seriously, a PoW with an ASIC or GPU is no less unfair, as only large-capital customers can afford to buy in large quantities and have a chance to win the mining battle. Both have aspects of the concentration of ownership of resources.

But PoS criticism has been offset by the Staking Pool component. This component has something to do with Solo Staking (validator) to. Remember that one validator needs capital to rent a computer server (usually type VPS or dedicated server), including insurance bandwidth Internet from and to server it must be stable.

The reason is if the computer server that validator offline either not active for some time or trying to trick the system, then the mechanism is applied cutting called “forced disappearance” cryptocurrenciesstumbling-He.

Just imagine that the solo investment of ETH on Ethereum 2.0 is at least 32 ETH or the equivalent of IDR 1,792,000,000 at the current exchange rate of 65 million IDR per ETH.

The Staking Pool component is applied here, where several ETH owners jointly contribute to the ETH Solo Stacker. They also receive interest for this contribution stumbling within a certain period of time.

Many other PoS blockchains have different size rules stumbling this in units of years (APY /annual percentage of yield). It usually works more and more stumbling, then the flowers obtained are smaller and vice versa.

Fit Crypto in Indonesia

in Indonesia, crypto exchange which offers products stumbling the crypto is Triv. They offer rewards stumbling various cryptocurrencies of different sizes.

For stumbling ETH for example, the annual interest rate offered is between 4-6 percent per annum. Minimum ETH that can be redeemedstake is equivalent to 50 thousand Rp.

With this reward, then for 1 ETH, you can earn an additional 0.0109589 ETH per day or 0.33333333 ETH per year. For the record, the Ethereum blockchain is currently underway hybrid, respectively PoW and PoS systems, so stumbling it has already happened.

Fit is of course an easier and less risky alternative to increase your crypto cash register, especially when you don’t have the skills and time to trading or when the crypto market is slowing down and it just happens “by system”For the many blockchains they carry Proof-of-Stake (PoS).

Fit and To earn Different crypto assets

The other way is “to earn”Or many other services call it“savingThe ultimate goal is the same, and that is to get more cryptocurrencies than the cryptocurrencies we have.

For example, they offer additional revenue of up to 4 percent per year for Bitcoin (BTC) customers. This number also varies, it can be smaller or larger.

Based on the simulation, if the value of your investment is 1 BTC, with a percentage return of 4 percent, then in 5 years you can earn about 121.66 BTC or the equivalent of 21.66 percent per year.

Compare with howhold on (using data from the last 5 years) you can get a surplus return of 4500 percent.

How to Product To earn Can he give prizes?

If the product stumbling crypto rewarded ”by system”From the blockchain code itself, then the product to earn have a mechanism regarding the origin of the awards.

Although there is not much detailed information about it, at least there are some clues that explain it. One of the variables is that Bitcoin funds are “transferred” to a third party service. Of course, this is a rather speculative conjecture.

Amount crypto exchange outside of Indonesia they have had a program like this for a long time. At Crypto.com, for example, you can earn up to 8.5 percent “Bitcoin Earn” rewards per year. For ETH USDC up to 14 percent per annum.

There is a similar OKEx program to earn which promises 1 percent interest per year on BTC. OKEx uses BTC for other products, namely OKEx marginal loans. It is a product to lend to other consumers who need BTC, good for trading and so on.

In other words, the funds of the customers in this product are again used by the stock exchange manager for profit. The result is initially shared among BTC owners.

This time, this is speculative and this mechanism may not apply. Toh Moreover, the stock exchange must be more open to the public regarding the use of its clients’ funds, while ensuring its security.

As for this crypto prize product that does not have a PoS system, Gabriel Rey as CEO of Triva said, it is possible that Bitcoin customers will turn into a DeFi application (Decentralized finance) usingto replace Bitcoin wrapped tokens (WBTC).

“This method is also very risky, like the hacking that recently happened to BadgerDAO,” Rey said on Thursday (December 23, 2021).

Another example, Rey said, is that the BTC can be turned into an arbitration mechanism, such as BlockFi product in gray tones.

“The problem is that the value of Grayscale products is now negative. This means that this investment activity suffers a loss, ”said Rey, citing an example of the alleged decline in the value of investments in the BlockFi product in March 2021. Rey has a more detailed account of the difference between stumbling and to earn cryptocurrency from blog This Triv.

Conclusion

Fit and to earn Crypto assets basically have their advantages and everything comes back to the convenience of each user.

Only that fund managers need to be more careful and transparent about where and where funds are managed, while being careful that the crypto ecosystem does not turn into hell. [ps]

Bitcoin Evolution

 

Bitcoin Evolution

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