PIVX Staking: How to Earn Crypto | What You Need to Know
August 30, 2018 (Posted by Steve Walters)
If you’re interested in earning passive income this is the post for you.
In it I’ll be covering how to create a stream of passive income by staking PIVX, the increasingly popular privacy-centric coin known. We will also take a look at some of the most important factors that you need to consider when you are staking.
Before we show you how to stake PIVX, we will quickly take a look at a general overview of PIVX as well as what Proof-of-Stake (PoS) is. If these are familiar to you then you can jump straight to the staking guide and start earning your PIVX!
What is PIVX
PIVX is an acronym that stands for Private Instant Verified Transaction. The PIVX blockchain and cryptocurrency were created by a fork from the DASH blockchain, but with a key difference. Where DASH uses Proof-of-Work as its consensus mechanism, PIVX uses Proof-of-Stake as a consensus mechanism.
For those looking to profit passively from cryptocurrencies this is a huge distinction. New PIVX coins are not mined, and that means there’s no need for expensive mining hardware or messing with mining software and mining pools. Instead, holders of PIVX coins are rewarded when they keep those coins in the official core PIVX wallet, and keep the wallet open and running with an internet connection.
Proof-of-Stake is far more environmentally conscientious versus Proof-of-Work as it uses no additional energy.
Some PIVX History
PIVX was launched on February 1, 2016 with the name Darknet (DNET), but was later rebranded to PIVX based on community feedback. The rebranding was meant to more accurately reflect the ideologies and intent of the PIVX community and their ideals.
PIVX is focused on achieving nearly instantaneous private transactions, as well as working with a governance that sustains the network while benefitting all PIVX users.
Additionally, PIVX has a core focus on privacy. To improve on existing privacy, PIVX migrated to the privacy-enhancing Zerocoin protocol in November 2017. That made PIVX the very first Proof-of-Stake coin to move to the Zerocoin protocol.
The move to Zerocoin has made it possible for PIVX users to send and receive completely anonymous financial transactions.
PIVX has an ambitious roadmap as well, and future changes include a decentralized exchange, an iOS wallet, in-wallet voting, elastic block sizes, I2P Network integration, and much more.
What is Proof-of-Stake?
Now that you know about PIVX, let’s take a look deeper into Proof-of-Stake as a consensus protocol.
Proof-of-Stake is one of many different consensus mechanisms that are used to secure a blockchain network. Proof-of-Stake has become a preferred method because it is environmentally friendly. This is in direct contrast with the most popular consensus mechanism, which is Proof-of-Work. With Proof-of-Work, which is used by Bitcoin and many other blockchains, users contribute the processing power of their computers to solve cryptographic problems and find blocks.
Proof of Stake vs. Proof of Work on PIVX
Proof-of-Work compared to Proof-of-Stake. Source: Blockgeeks
This secures the network and keeps it functioning, and as a reward those doing the processing and verifying, known as miners, are given a reward for each block discovered. As block discovery has become more difficult, the amount of energy needed to power this process has increased dramatically. This has led to a search for a superior consensus mechanism, and some have settled on Proof-of-Stake as that solution.
Proof-of-Stake cryptocurrencies do not require enormous amounts of processing power or electricity. Instead, the blockchain network is secured by those who already hold the cryptocurrency. That’s done by a process called staking. For staking coins and keeping the network secure these users are rewarded with new coins as they are minted. Those with the largest stakes receive the largest rewards, which also gives them the greatest incentive to maintain a smoothly running blockchain.
Why Proof of Stake is Good
The obvious answer is that Proof-of-Stake is good for users because they get paid simply for holding cryptocurrency. This is like receiving interest or dividend payments for holding digital assets. Proof-of-Stake is also good for our environment since it doesn’t require an excessive use of resources (electricity) to function.
And finally, Proof-of-Stake is good for the blockchain network because it aids in decentralization. Because there isn’t a huge monetary investment for mining many more users will operate nodes, keeping the network for more decentralized. Users are also less likely to simply move to a different coin for mining if the current coin becomes less profitable, because they have an incentive to keep staking.
Passive Income PIVX Staking
Because PIVX uses the Proof-of-Stake mechanism, anyone who holds PIVX coins in the official PIVX core desktop wallet can stake their coins and earn new coins completely passively. If you’d like to know just how much passive income you can earn simply have a look at the official PIVX Staking Rewards Calculator.
The first thing you’ll need to stake PIVX is to download the official PIVX desktop wallet from here. Download the appropriate version for your operating system and then install it. Don’t choose the Light Desktop Wallet if you’re planning on staking.
Which PIVX clients to download
Download PIVX Clients
The installation will simply require you to agree to the installation directory and click “Next” a few times. It takes less than a minute.
Next you’ll be presented with a screen asking where to store the data directory. This is where the blockchain data is stored. It needs a minimum of 1GB of free space. The default directory is fine, and you can click “OK”. If you get a pop-up message from Windows Defender or other anti-virus just click to allow access.
The PIVX core desktop wallet will launch and begin downloading the blockchain. That download will probably take several hours at a minimum, so just let it run until it’s complete.
The core desktop wallet for PIVX
While you’re waiting for the blockchain to download you can buy some PIVX from Binance, Bitrex or Trade by Trade. Once the wallet is synched you can transfer them to the new PIVX wallet.
Next you’ll want to encrypt the wallet to keep it secure. You do this by going to “Settings” and clicking “Encrypt Wallet…” This will generate a password that you use to unlock your wallet. Make sure to store the password somewhere safe and secure.
Now you can unlock the wallet using the password you’ve just created. When doing so tick the box that says “For anonymization and staking”. The wallet will open and you should see a little green arrow in the lower right corner of the wallet display, which means your wallet is successfully staking.
You need to keep your wallet open and connected to the internet 24/7 if you want to get the full staking reward. If the wallet is only open 30% of the day you’ll only get 30% of the reward.
According to the PIVX Rewards Calculator, if you hold 10,000 PIVX (at the Aug 30, 2018 value of roughly $12,400), you will receive around 37.88 PIVX (worth ~$47.17) approximately every 30 days.
While PIVX is interesting as a privacy coin, and for its focus on nearly instantaneous transactions, many PIVX holders are most interested in its staking feature. And that’s understandable since it basically represents a dividend for simply holding the coin in an open wallet.
The lack of a heavy environmental impact from the Proof-of-Stake consensus method will likely see more coins choosing this consensus protocol. That will give investors even more staking opportunities, but as one of the first and most popular PIVX has a decided advantage at this time.
If the coin could gain traction as a payment system, which makes sense due to its privacy features and lightening fast transactions, the price could rally strongly. And that means anyone getting in now will be making significantly larger dividends in the future.
Featured Image via Fotolia and PIVX