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Why Proof Of Stake Is Better Then A Saving Account

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Avatar for Jack216
Written by   51
1 year ago

Why Proof Of Stake Is Better Then A Saving Account

So You probably have heard all about staking if you been getting into crypto or I know if you been reading my blogs you know what proof of stake is. If you don't let me explain it to you real quick. What Proof Of Stake is in layman terms a crypto savings account you can set up with a coin that supports it. Coins like Ethereum and Ethereum 2.0  are the most famous for staking. Many coins are now moving towards this now instead of the old and not as reliable Proof of work or just simply known as mining. This is because Staking is faster for the blockchain then mining and it allows for everyone to profit not just miners which most of the time need serious hardware to see any profits. This is one of the reasons why staking is so popular but it also helps back the coin's value too so your giving back to the community while staking. That is why it's gaining so much popularity recently amongst people. This is why we are going to be discussing today why staking is a much better option for profits then a savings account. One last thing you should know is that for some coins that when you stake them that they are locked up for certain time periods. meaning you cant withdraw those coins out at all no matter what so be smart about staking with coins because it all varies between cryptos. 


To begin we need to look at what the average APR is on a savings account. Were gonna use the U.S as an example . The rates will be better no matter where your located nationally but I'm just going to use the U.S for a quick example. So if you look below you'll see what the averages are usually.  as shown the national average is 0.06 percent. Now personally I can tell you that not everyone has a 0.06 interest rate. The majority of accounts have something more like 0.01% to 0.03%. Now lets be honest nobody is making passive income off of their savings account. 


This is where staking comes into all of this. Lets say you was going to buy 100 $ATOM (which is currently priced at $10.12 as of 6/23/2021 totaling to $1010) and staked it. Lets say you used atomic wallet to stake with their interest rate being 10.16% you could get back in a year after staking the crypto is $102.62. Look at the picture below for references. Now lets put the average saving number into the calculator and we get $60.6. I'm sure no one is surprised at the results. You can see for yourself below.


now lets see what the difference is now between these two different passive incomes. If we put the results in the calculator we get $42.02 difference in profits. This goes to show staking is far more better way of getting passive income over a savings account. This is only with atomic wallet and using $ATOM. I'm sure you could find better  staking numbers somewhere using other cryptos. Not to also mention that the majority of the time your not getting a 0.06% APR on your savings. So what we can take from this is that staking is the best way to make true passive income without having risks that come with cryptocurrencies and stocks and comes with the steady profits of a savings.  

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