Best Proof of Stake Cryptocurrencies 2018
When most people hear about cryptos, what comes to mind is essentially bitcoins. In reality, there were close to 1400 cryptocurrencies by January 2018 and the number keeps growing. Some of the popular alternative cryptos that you might have heard of include Ethereum, Bitcoin Cash, LiteCoin and Ripple. But bitcoin is by far the most popular, most famous and the largest cryptocurrency in the world by market capitalization.
Following the dramatic price rally of the bitcoins in late 2017 and early 2018, tens of thousands of people poured their savings into the crypto. Some did so even without doing a proper due diligence or understanding how cryptcurrencies work.
There are three ways of acquiring cryptocurrencies. You can trade in the exchanges and acquire the cryptocurrency, buy it directly from people in a marketplace at negotiated pricing or mine the cryptocurrency.
If you are curious and would like to delve further into the foundations of bitcoins and other cryptocurrencies, then you have to dig deep into cryptocurrency mining and this further leads you into a maze of concepts such as proof of work and proof of stake. Cryptos such as bitcoins use the proof of work mining protocol but there is a constellation of cryptos that utilize proof of stake algorithm to arrive at a distributed consensus and these are growing increasingly popular because they are fairly eco-friendly and more decentralized.
What is Proof of Work?
This is the cryptocurrency mining algorithm for cryptos such as bitcoins. In this mining protocol, the miner uses a powerful computer to solve complex cryptographic puzzles. These are known as proof of work (PoW) problems. If multiple problems have been successfully solved for various transactions, all the verified transactions are grouped together in a “block” and stored in a public distributed ledger called the blockchain. The process of mining therefore entails verifying if a transaction is valid and this process generally requires a lot of computing power. The first miner to solve a mathematical problem will receive a freshly minted cryptocurrency unit that is awarded by the protocol. In a PoW protocol, the miners simply lend their computing power to the cryptocurrency blockchain network in order to arrive at a distributed consensus.
What is Proof of Stake?
While proof of work relies on the intense computing power of the machines that the miners add to the blockchain network, proof of stake simply relies on a miner or forger putting some skin into the game in order to arrive at a distributed consensus.
In proof of stake, the miner has to show stake or ownership of a certain amount of cryptocurrency units in order to perform the validation of transactions. The blocks in a PoW are usually said to have been “forged” or “minted” rather than mined and the forger or creator of the new blocks is picked in a semi-random manner based on a number of factors such as their stake or skin in the game. In PoW, the forgers do not receive new crypto units since the number of the units is usually fixed right from the beginning when the currency is launched. They will therefore receive transaction fees as reward for the successful creation of blocks.
The Proof of Stake methodology of arriving at a distributed consensus is growing increasingly popular with many crypto investors because it does not involve an inordinate expenditure of computing power and energy and the power in the blockchain network is not centralized among few individuals or groups of crypto mining conglomerates who already have very deep pockets. Proof of Stake has a fairness element built into the blockchain network; an individual stakeholder in a PoS network has the same probability of creating a new block as the fraction of the cryptocurrency that they hold. If you are a cryptocurrency “puritan”, this is a concept that you might find quite appealing.
There are numerous cryptos that are based on PoS methodology. Let’s look at ten of the best that might be worth investing in:-
BitBay (BAY) is a cryptocurrency marketplace that utilizes smart contracting or a Double Deposit Escrow service to give the marketplace optimal integrity and protect it from fraudulent behavior. It makes use of Smart Contracts and a Proof of Stake cryptocurrency functionality to offer users a free-to-use platform where they can buy and sell goods safely without fraud or middlemen. It is a fully decentralized marketplace that relies on Unbreakable Smart Contracts and a secure PoS cryptocurrency to facilitate the secure exchange of goods and services. Currently, a BAY trades for $0.04 and the cryptocurrency has a total market capitalization of $38 million. BITBAY current offers an annual ROI of 1% but is possible to get greater returns of between 2% to 5% depending on the number of wallets that are staking. To stake, you simply need to install the BITBAY wallet and sync it with the BITBAY blockchain. BITBAY rewards you for supporting its blockchain.
#2 DIVI Project
The DIVI Project (DIVX) is a custom blockchain network where names and the metadata are stored alongside the block of transactions. It is a very user-friendly blockchain network that is designed with the average user in mind. It is therefore far simpler and easier to learn and use than other cryptocurrencies.
It utilizes a 5-tiered masternode system which allows the holders of the DIVX coins to work on updating and maintaining the network and earn more coins through a Point of Stake methodology in arriving at a distributed consensus. The blockchain network has also created a network where DIVX holders can purchase items using the coins.
The minimum required to invest in the first masternode (first level of the 5-tier masternode system) is 1000 DIVX. At the current DIVX price of only $2.45 per coin, you will only need $2450 to invest in the first masternode so the barrier to entry is pretty low. Currently, the cryptocurrency has a market capitalization of $12.6 million and is giving investors an annual rate of return of 60% to 100%. If you are looking for a hidden crypto gem where you can enter early and scoop massive returns quickly, this is it.
Emercoin (EMC) is based on bitcoin’s original blockchain code but without its inflexibility and complexity. While it has the same security features and reliability as bitcoin, it offers users greater flexibility through a number of innovative tweaks and add-ons.
Emercoin is highly reliable. It has a hybrid system of arriving at a distributed consensus that is based on both PoW and PoS. While it still has the traditional Proof of Work blockchain creation (mining) methodology, it is essentially based on a Proof of Stake methodology. The staking eliminates the need to acquire increasingly powerful computing power to win the mining game. PoW mining is always based on an “arms race” where disparate crypto mining conglomerates compete on who would put together the best mining capacity using massive computing power. That doesn’t count in a PoS blockchain network like Emercoin. The Emercoin blockchain system is highly scalable and is therefore future-ready.
Emercoin also gives a fairly decent annual rate of return of 6%. Emercoin currently trades at the rate of $3.60 per coin and has a market capitalization of $151 million, making it one of the largest cryptos in the market. There are 41, 485, 548 EMC in circulation as at the time of writing.
NEO is a Chinese blockchain network that has by far been the most successful cryptocurrency project emerging out of Asia. It is also one of the largest cryptocurrencies in the world with a market capitalization of $4.4 billion. There are 65,000,000 NEO in circulating supply against a total supply of 100,000,000 NEO. At the time of writing, one NEO coin trades at $67.90.
NEO transactions enable the development of smart contracts and digital assets. The crypto has been hailed for its highly efficient smart contracting functionality.
NEO utilizes a special kind of distributed consensus mechanism called Byzantine Fault Tolerance (dBFT) that enables the cryptocurrency blockchain network to support up to 10,000 transactions every second. Apart from dBFT, the cryptocurrency network also utilizes a NeoX system that is capable of executing and operating across multiple blockchains. The NEO Contracts enables the blockchaion system to create scalable smart contracts while the NeoFS offers a persistent peer-to-peer storage area. The network is also quantum proof since the problems created are difficult to solve with the use of Quantum computers.
NEO holders can stake NEO coins in order to produce GAS coins. These are subsequently used in powering the cryptocurrency platform, enable smart contracts within the blockchain network and to pay for computation.
To place a stake, you will need a minimum of 1000 NEO. At the current rate as of time of writing, that is an investment of roughly $68,000. Once you place a stake in the blockchain network, you will generate “GAS”. This is a totally different form of cryptocurrency in the NEO blockchain network. At the current rate, one GAS is valued at $20.19 with a total market capitalization of $200 million. The total circulating supply is 9, 922, 177 against the total supply of 16,226,429 GAS.
You can claim GAS every 5 minutes and also trade it or convert it into other cryptocurrencies. NEO can give you returns of up to 5.5% annually.
PIVX is a low cost and privacy-centric cryptocurrency that is based on the Proof of Stake distributed consensus methodology. PIVX stands for Private Instant Verified Transactions and the platform was forged out of the DASH blockchain system. Apart from the primacy of the privacy and security features, another defining feature of the PIVX is the extreme decentralization of power in this blockchain network: it is very community-centric and all the owners in the PIVX ecosystem can participate in voting for project proposals and earning block rewards while helping to secure the blockchain network using full node wallets.
By running a masternode of 10,000 units of PIVX coins to stake on the platform, you can get an annual rate of return of about 5%. At the current rate of $3.86 per PIVX unit, that is an investment of $38,600. However, there is no cap on how much you can stake so you can use any amount. This gives it a relatively low barrier to entry. PIVX is currently ranked as one of the most profitable cryptocurrencies with annual return of 4.8%. For an estimate of possible rates of returns, you can try out this PIVX staking calculator.
Stratis offers a blockchain development platform (Blockchain as a service or BaaS) where enterprise businesses can easily build, test and deploy C# -based private blockchains and blockchain applications utilizing the .NET framework. The custom blockchains (side blockchains) developed on the API are secured by the parent Stratis blockchain.
The platform was built to provide enterprise businesses, particularly those in the financial sector, a platform where they can deploy blockchain technology. These businesses can use the Stratis API framework to develop custom blockchain applications with the custom features that they need. The API helps in speeding up the development lifecycle of enterprise blockchain projects. The Stratis team also provides professional consulting services for clients that may want to try out its blockchain development API.
To create the blockchain apps on the Stratis platform, one will need the cryptographic token fuel or currency, $STRAT. It is the $STRAT that will power and secure the Stratis blockchain. The $STRAT currency is used in paying transaction fees and in exchanging value among the participants in the Stratis marketplace. While it started as a Proof of Work distributed consensus algorithm, it is now 100% Proof of Stake, making it one of the most secure and reliable cryptographic tokens.
One $STRAT is currently trading for $4.34 and the market capitalization for the cryptocurrency is $428 million as at the time of writing this.
Unlike other cryptocurrencies such as Stratis and Ethereum which are more of APIs, DASH or DigitalCash is a peer-to-peer digital cryptocurrency that is completely decentralized. The DASH platform has been built on the core bitcoin platform and has add-ons such as better privacy features and quicker transactions. DASH runs on the PoS methodology and you will need a minimum 1000 DASH to stake in this cryptocurrency’s ecosystem. Currently, one DASH trades at $402.49 so you need a minimum investment of $402, 490 to stake on DASH and run a masternode. However, the rate of return is an impressive 7.5% and there is also the value of price appreciation of DASH cryptocurrency so this still makes a great investment. The market capitalization is $4.2 billion so this is one of the biggest and most valuable cryptocurrencies out there by market capitalization.
OkCash(OK) is an open-source and eco-friendly cryptocurrency that is one of the oldest Proof of Stake cryptocurrencies in the market having began in 2014. It prides itself on its speed and orientation towards micro-transactions. It uses a specialized staking desktop wallet. Once the coins have been moved into this wallet, they will take 8 hours to mature and start earning interest for the holder. OKCash is a hybrid PoS/PoW cryptocurrency system that deploys the Scrypt hashing algorithm.
The annual staking return for the cryptocurrency is also quite impressive, currently offering holders an average return rate of 10% which is among the best in the PoS cryptocurrency market. Currently, one OkCash coin is worth $0.14 and the cryptocurrency has a market capitalization of $10.21 million as at the time of writing. Apart from the impressive rate of return of 10%, a low value of just $0.14 presents an opportunity for significant growth in the future and the crypto could just see a “bitcoin moment” where the value balloons beyond expectations.
Built on the bitcoin code, the NAVCoin (NAV) holds the distinction as the first cryptocurrency to feature a dual blockchain for its transactions. It is a 100% PoS cryptocurrency that guarantees users faster transactions and a high level of privacy thanks to the dual blockchains. Transactions on this blockchain system take only 30 seconds to process.
Currently, one NAV coin is trading at $1.04 and the market capitalization for the cryptocurrency is $65 million. There are more than 62 million NAV in circulation. The cryptocurrency offers an annual rate of return of 5% if you stake using the desktop wallet.
ReddCoin is Social Currency that is used as a tipping cryptocurrency for social media networks. If a user likes a particular user’s content, they can send them tips using this blockchain platform. It is based on a Proof of Stake Velocity algorithm that places a premium on both the stake and the velocity or level of activity in the social network.
ReddCoin adds value to the “social currency” while increasing cryptocurrency awareness and making the experience fun and enjoyable to the general public. With ReddCoins (RDD), a like, upvote or retweet in the various social media networks will now have a monetary value that can be used to purchase items or exchanged for other currencies. Currently, 1 RDD trades for $0.005 and the cryptocurrency has a market capitalization of $139 million and an annual rate of return 5% on the desktop staking wallet. ReddCoin does not have any staking caps.
# Ethereum (to stake soon)
This comes with a small disclaimer because Ethereum actually utilizes Proof of Work (PoW) methodology in its protocols. However, the cryptocurrency is planning to roll out a Proof of Stake (PoS) ecosystem later in 2018 and this will be a significant development because ETH is also the second largest cryptocurrency by market capitalization.
This is likely to have a Domino effect on the cryptocurrency ecosystem and might lead to the mainstreaming of PoS in other cryptos. If the second largest cryptocurrency will be using a PoS, then many other smaller cryptocurrencies might switch to the option in arriving at a distributed consensus.
ETH is performing a “Casper” update that will see the crypto switch over to PoS. After the switch is complete, many ETH holders will now have to show their skin in the game or stake their coins in order to earn dividends when creating and adding new blocks to the ETH blockchain network.
Ether holders don’t know how many ETH coins will be required to stake in order to validate transactions. It could be as low as 10 ETH or as high as 1000 ETH.
For more information, visit this article: Proof of Stake Cryptocurrencies