The increasing popularity of the Proof-of-Stake consensus mechanism has paved the way for cryptocurrency validators, but the main question is what is crypto validator, and will this method be a profitable source of income?
Making money online from home is the dream of many people, but finding such opportunities is not easy. However, the digital currency has now opened new doors for investors to make money, allowing them to use their capital and computer to become a digital currency validator on a blockchain.
Validation can certainly earn you money, but is the income worth the time? In this article, let’s show you what a validator is and how you can earn by staking your cryptocurrency and becoming a validator.
What is crypto validator in blockchain?
In crypto mining for blockchains such as Bitcoin and Ethereum 1.0 that use the Proof of Work (PoW) protocol, validators are individuals who voluntarily perform computer calculations to maintain the integrity of the blockchain by continuously calculating the link from the first block to the last block. Generally, there is a shortened version of the blockchain that is much smaller than the full chain and contains every transaction. Validators of a public blockchain are mostly volunteers who usually dedicate a computer to the process. There are thousands of validation nodes for major blockchains like Bitcoin and Ethereum 1.0.
What is crypto validator?
Before we get into the financial side of validation, let us first explain what is validator. The blockchain that digital currencies use consists of blocks filled with multiple transactions that have taken place on each network. For a blockchain to remain reliable and secure, each transaction must be verified and new blocks created.
This is where lenders come in. These people are the backbone of blockchains and digital currencies in general. Validations work through a proof-of-stake or PoS mechanism, which is now one of the most popular consensus mechanisms out there due to its efficiency.
To be a validator, you have to share a certain amount of cryptocurrency to have a chance to be randomly selected for this task. The minimum amount of staking will also be different depending on the desired coin.
Cryptocurrency validators are rewarded for their work in tokens, which is why many people want to be validators. But there are a few requirements you must meet to have a chance to become a validator.
What equipment do we need to become a crypto validator?
Unlike cryptocurrency mining, you don’t need to buy new parts and equipment to become a validator. But to get started, you’ll need to have a significant amount of storage space on your chosen validating device — about 250GB of memory, to be exact — and an extra 8GB of RAM.
Now let’s talk about the budget. You can currently stake a wide variety of different cryptocurrencies, either as a stand-alone validator or in a pool, and with other coins, the minimum staking requirements will be different. This amount can range from tens of thousands of dollars to a very small amount.
Take Ethereum for example. It is a highly-rated coin for betting, but it is very difficult to use. This difficulty is due to the Ethereum 32 rule, which states that no one can become an Ethereum independent validator unless they share at least 32 Ethereum.
Currently, this amount is approximately $90,000 but has exceeded $100,000 in the past. You also need to have 1 extra Ethereum to pay the transaction fees or Ethereum Gas. In any case, most people simply cannot afford to part with such a large amount.
But this is not the case for all cryptocurrencies. As long as you have enough storage and RAM, you can validate on other blockchains for a fraction of that.
If you have little technical knowledge, you may struggle as a digital currency validator. So, make sure you are familiar with how cryptocurrencies and blockchains work before jumping into this process.
Now we know what digital currency staking and validator are and what is required for them. So, let’s answer the question, how can we become a validator?
How to become a validator? (Review of Ethereum 2 blockchain)
To become a validator on proof-of-stake blockchains, you need to stake your assets. Betting or staking digital currency is a way to multiply your assets. This happens through the rewards you receive for pledging your cryptocurrency to verify blockchain transactions.
To become a validator, your cryptocurrency is randomly selected to create new blocks. Your asset will be responsible for checking and verifying the blocks.
How to become a validator in Ethereum?
Currently, to validate blocks on Ethereum, you need the following:
- 32 ETH to become a total validator or some ETH to join a betting pool.
- An Eth1or Mainnet client or a backend API.
First, you need to convert the transactions into a new block or check the work of other validators. With these simple steps, you can support the secure execution of the chain. Also, you must refrain from malicious activities, going offline, or not being authenticated. Otherwise, you will lose a significant portion of your stock. In exchange for honest validation, you will receive 10% of your annual stake.
How much is the crypto validator reward?
Above all, it is important to note that the amount of money you can earn with validation depends on the initial amount of cryptocurrency you decide to stake. Since validators usually have to lock up their staked funds, it is tempting to hold as little stake as possible. But this in turn affects how much you earn, as your betting bonuses are calculated as a percentage of staked funds.
It is also important to note that the bonus rates for validators vary depending on the price of the coin they bet. The price of tokens is constantly changing, and therefore, you should remember that a significant drop or fall can lead to your loss in the process of shares. Additionally, as more validators join each network, the rewards available to each validator will also decrease.
To understand this further, let’s take a look at Ethereum staking. The current average reward rate for deploying Ethereum to exchanges is around 6%, but this rate varies significantly depending on the platform you choose.
For example, if you want to own Ethereum as a standalone validator using Bitfinex, you can currently earn $755 per month or $8,948 per year.
It is important to note that staking 32 ETH will naturally yield much higher rewards since the original stake amount is quite significant. So, let’s say you’ve invested a decent amount in Cosmos and want to share 100 ATOMs, which is currently just under $3000. Unfortunately, that won’t set you back more than $55 a year.
The same goes for most other altcoins. Apart from a handful of tokens like Ethereum and Binance Coin, most cryptocurrencies don’t have much value and you can’t earn much by validating and staking them.
Additionally, fees charged by the network you validate with can also reduce your overall profit. Also, since you often don’t have access to your equity funds during the betting period, you can’t sell them or invest in other profitable opportunities if the price rises.
The best blockchains to act as a validator
Crypto Validator in TrustWallet
TrustVault is software that makes it easy to share digital currencies with just a few taps on your smartphone. This wallet allows anyone, anywhere in the world, to buy and share digital currency securely, through its app.
Users can currently earn +23% APY for staking Binance Coin (BNB) in this wallet. Other assets in the TrustWallet app include ATOM, TRX, ALGO, XTZ, and KAVA, which earn between 6% and 12% plus APY.
Finally, delegating funds to validators via Trust Wallet means you can increase your balance without the hassle or risk of maintaining a node, making betting as easy as possible, even for beginners.
What is Validator’s IVO?
Validator Initial Offering or IVO is a fundraising method. In this method, investors share their assets using one or more proof-of-stake networks to participate in mining. The new token that is mined by this process has the same value as the shared token. Therefore, for every 1 cent earned by Validator’s IPO, the investor will also receive the same amount of new cryptocurrency.
Important points of IVOs
- You can participate in digital currency projects without spending your capital.
- You will have 100% control of the capital and can withdraw your currencies whenever you want.
- You are fully in control of your liquidity and can trade with it.
- With the initial supply of the Validator, the risk of market fluctuations is reduced. Because you will not need to sell your assets to buy other tokens.
- The risk in this situation is very low and startups will also have a lot of opportunities to earn profit.
What is crypto validator? Final Word
The validator is responsible for verifying the transactions of a blockchain. In proof-of-work (PoW) systems like Bitcoin, validators solve complex computational math problems to earn the right to verify transactions and receive rewards. In proof-of-stake (PoS) systems, validators are rewarded as long as they share the network token and properly participate in the network.
Why Bitcoin cloud mining?
An unknown individual or group called Satoshi Nakamoto introduced the Bitcoin network in 2009. In 2021, there will be more than 10,000 different projects in cryptocurrencies. So each of them has its role in building the future of money.
The market value of cryptocurrencies reached $ 1 trillion. It happened for the first time in January 2021. It passed $ 2.5 trillion less than three months later. So it shows that this market is one of the growing markets favoring its investors.
The Minerland Bitcoin Cloud Mining is a cloud miner website. It will join a pool and purchase a certain amount of hash power. In this pool, the profit will distribute equally among all participants. It will happen based on hash power. Also, the cloud mining platform allows you to mine your BTC. You can do it without installing any hardware and at no extra cost. So Minerland is the best crypto cloud mining service to earn Bitcoin. It helps you invest in Bitcoin easily and with low risk. For more information about us, you can follow Minerland’s Instagram account.