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- 1 Offline staking is a secure way to earn staking rewards without internet connectivity.
- 2 Asset holders can participate in offline staking as Super Stakers or Delegates.
- 3 Improved security, convenience, and flexibility are a few advantages.
Doing something is better than doing nothing, similarly earning passive income through staking is better than letting funds collect dust in the crypto wallet. Most long-term crypto holders consider staking as an interesting way to generate passive income by making their digital assets work. Offline staking is a concept that allows individuals to generate money without connecting to the internet.
Let’s delve into the pool of staking and explore the features offered by offline staking.
What is Cryptocurrency Staking?
Staking in the crypto universe is considered to be a less capital-intensive choice than cryptocurrency mining. It is a process of holding digital assets in a crypto wallet for transaction verification and supporting blockchain security. In return, the cryptocurrency holders are offered rewards and passive income.
Moreover, asset holding in the wallet defines the amount of rewards a staker receives. However, there are a few conditions that a staker needs to follow and it requires vesting. Staking can be done in both the online and offline way.
Offline Vs Online Staking
Offline staking, sometimes termed cold staking, is a process of staking a crypto wallet that is not linked to the Internet. It is a mechanism of involvement in the Proof-of-Stake (PoS) blockchain network without sharing the private keys of the staked coins to the online network.
Online staking, on the other hand, includes an online wallet to store digital assets and control over the cryptocurrency is handled by a third party or charged to a random service.
Hardware wallet and air-gapped software wallet work well for offline staking. Ledger Nano X, Safepal, and Ellipal Titan are some of the best options to explore for staking offline as they offer enhanced security, offline storage, liberty to choose validators, and full control over the assets.
Holders can link offline staking to a savings account in centralized finance to receive interest on the funds deposited. Furthermore, individuals can participate as Super Stakers or Delegates in the offline staking process.
How Does Offline Staking Work?
There are various ways to take part in the offline staking process with any public PoS blockchain.
Participating as a Super Staker or validator, the node accepts delegated stakes from other asset holders. One who doesn’t want to run a node can stake their tokens to an address that they then delegate to a larger pool staker.
No matter what, individuals can earn staking rewards and reap all the benefits without risking their funds.
Projects Supporting Offline Staking
Most of the PoS projects support online staking and so, searching for the best offline staking projects is challenging. A few projects are offering offline staking as follows:
- QTUM platform
- MyCointainer platform
- Cosmos Network
- Kava Network
- Polkadot platform
Benefits and Risks of Offline Staking
Offline staking possesses several benefits including high-level security and convenience. Cold storage and the use of hardware wallets mitigate the chances of online threats and hacks. Additionally, this approach to staking doesn’t require internet connectivity, making staking more flexible, accessible, and reliable to the stakers. Besides, offline staking is more sustainable and energy-efficient than online staking.
Despite these benefits, the approach also holds a few risks like chances of potential loss of rewards and reliance on third-party nodes along with the requirement of technical knowledge. In other words, setup and handling of offline staking requires technical expertise. Additionally, cold storage enhances the chances of asset loss if not managed properly or if any technical glitches are encountered.
Is Offline Staking Secure?
Cold storage of the assets and multi-signature wallets are sustaining the security of offline staking. The use of private keys on an offline platform reduces the chances of internet threats. Furthermore, the use of multi-signature wallet defends against outside threats and improves security.
Conclusion
Offline staking is a concept that allows stakers to earn passive income without internet connectivity. It includes holding digital assets in a crypto wallet for transaction verification and supporting blockchain security. High-level security and accessibility are the major benefits of offline staking whereas chances of asset loss and the requirement of technical knowledge are some drawbacks.
FAQs
How does offline staking operate?
Offline staking permits users to stake digital assets in an offline wallet and earn passive income and staking rewards.
What are the platforms for offline staking?
Polkadot, Kava, Cosmos, and MyCointaner are a few of the projects offering offline staking.
Adarsh Singh is a true connoisseur of Defi and Blockchain technologies, who left his job at a “Big 4” multinational finance firm to pursue crypto and NFT trading full-time. He has a strong background in finance, with MBA from a prestigious B-school. He delves deep into these innovative fields, unraveling their intricacies. Uncovering hidden gems, be it coins, tokens or NFTs, is his expertise. NFTs drive deep interest for him, and his creative analysis of NFTs opens up engaging narratives. He strives to bring decentralized digital assets accessible to the masses.
