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During a recent visit to a local store, I could hear that the people around me were talking about Dogecoin. I have a friend who works in finance, and he once told me that if you hear everyone talking about a certain investment, during your Uber ride, at the store, friends from college–you probably missed the boat on that investment. So I went home and spent a lot of time researching “the next big altcoin.” What I discovered was something a little more reasonable.
Another way of earning more crypto on Coinbase is by purchasing crypto that earns interest. Initially, this, and the wider variety of altcoins offered is what drew me to Coinbase. I discovered Algorand (ALGO) because I was searching for a way around the volatility of owning cryptocurrency. I also loved the idea that the crypto in my wallet would constantly be earning interest.
What is Algorand? What is Proof of Stake?
According to Coinbase “Algorand is a blockchain platform that aims to solve the “blockchain trilemma” by being scalable, secure, and decentralized — all at the same time.” Algorand runs on a consensus protocol that is Proof of Stake (PoS) as opposed to the older, energy sucking consensus protocol, Proof of Work (PoW). Proof of Work is a competitive process which involves many different miners trying to solve the next piece of the block. Instead of using miners to propose new blocks, Algorand uses a more cooperative consensus protocol which selects new Algorand nodes randomly in a lottery-like process.
How does Algorand earn interest? Can you do staking with Algorand on Coinbase?
Anyone who is staking Algorand tokens has a chance of being selected. The more Algo tokens you stake, the better chance you have at being selected and earning more Algo as a staking reward. This process repeats every 4.5 seconds, choosing new stakeholders each time, taking away the need for miners to propose new blocks, which is the process for Bitcoin (BTC). Algorand makes it possible to earn money just by owning and holding their Algo coins. When you stake Algorand on Coinbase, they receive the rewards from the network and then will automatically credit them to your crypto wallet.
Buying and holding Algorand may not be the fastest way to see your money grow, but it is less volatile and more consistent than riding the cryptocurrency roller coaster. Using the Proof of Stake (PoS) is where many other crypto projects are headed, this process not only saves energy, but helps prevent the volatility involved in owning crypto by incentivizing holding onto your coins for longer.
So, to get started on your journey, all you have to do is buy some Algorand on Coinbase, and watch your money grow.