How to make the difference between Mining and Staking

How to make the difference between Mining and Staking

How to make the difference between Mining and Staking

Mining is a slow execution but a highly intensive and energy-consuming process that causes high electricity consumption and cost for mining the coins. There is no other way by which its cost-impacting strategy can be controlled. Despite regular users, those who initiate their business with the mining process, the mining process is also quite expensive for them as well because it involves high computational power which is not affordable for everyone. Consider opening a Bitcoin trading account at if you’re curious about the potential of cryptocurrencies.

More than above, blockchain networking is a complex method where a complex mathematical puzzle has to get resolved which requires high electrical power and hardware of efficient configuration to solve the technical puzzle more efficiently. Therefore, new coins can be generated and these coins were further released to the blockchain which is also known as a public ledger. The mechanism used to execute this process is known as proof of work (PoW). This mechanism for mining is performed by high-rate hardware which further solves complex mathematical puzzles in a few minutes.

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What do you mean by staking?

Although staking and mining both play a significant role in the crypto world and both are essential parts to generate crypto coins. Staking is an alternative to mining but it is carried out somehow differently.  As compared to mining, staking is based on the Proof of Stake (PoS) mechanism which is a fundamental need of every cryptocurrency. In staking you can purchase the crypto coins of any cryptocurrency and further you can hold them in a crypto wallet whether in your crypto account wallet or wallets available on the internet for a particular period.

Moreover, in other terms, you can understand the concept of staking considering the fixed deposit scheme in your local banks where you can deposit your fiat currency in your local bank account on account of interest imposed on that amount for a particular period. Whereas in the case of staking, you are benefited from rewards with a fixed amount of interest applicable on your amount as mentioned in your contract with the crypto entity and then you are rewarded with additional coins via following the mechanism of Proof of Stake. How long you will be able to hold your coins in the crypto wallets, the more you will be able to get more rewards in terms of coins in return, this is how you can add more coins to your wallet.

Mechanism of Proof of Work

It is a kind of agreement between a group of people who are not familiar with one another but regularly update transaction history on the ledger. However, it is very resource intensive but somehow now as secure for a decentralized ledger because of its un-reliable approach as there is no third party involved to validate the transactions occurring on the ledger of the blockchain.

Proof of Stake consensus

It is an alternative consensus mechanism of Proof of Work as PoS is an upgraded version of PoW. The flaws can be huge electricity consumption in PoW and its limited resources which make it a disadvantage for crypto growth. One of the significant changes in the Proof of Stake consensus is that people can stake their original coins instead of using huge electricity consumption to regulate the amount of hardware for winning the puzzle solve programs by computing them mathematically.

The different types of staking

Staking is bifurcated into two parts named as proof of Stake and the other one is Delegated Proof of Stake. The PoS mechanism is by withholding the stakeholders or you can say investor’s coin so as modify all the transactions properly. On the other side, Delegated proof of stake as the name implies selects a specific representative by stakeholders to validate the whole transactions occurring on the network.


All terms related to cryptocurrency specifically play an important role in their way. They decide the growth of crypto at every stage. Mining and staking both are important for generating coins and earning additional coins to get more benefits while in the crypto business.


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