Staking is a fundamental concept in cryptocurrency – it refers to the process where users leverage their digital assets to support a blockchain network while earning rewards in the process. Users who stake their cryptocurrencies are known as “validators” or “stakers” and contribute to the operation and security of the blockchain.
This concept comes from the proof-of-stake (PoS) mechanism of consensus and operation. In this model, blockchain transactions and maintenance are handled by validator nodes, which are computers operated by users who staked their cryptocurrency. The stake is like a collateral of sorts to ensure validators carry out their responsibilities, with their collateral at risk of being slashed if they fail to perform.
Now the Question is
How to stake Ethereum 2.0Ethereum 2.0 operation is based on the PoS model, which is an upgrade from Ethereum’s original proof-of-work (PoW) mechanism. In the PoW model, transactions are validated by network computers that perform complex tasks, which is incredibly energy and time intensive. The Beacon Chain is the consensus layer that underpins Ethereum 2.0’s PoS model of operation.
It went live in December 2020 and will take over from the current PoW algorithm as the execution layer after The Merge. When Ethereum 2.0 is fully in place, the PoS system will experience significant improvements in energy efficiency.
