ETH Price : $588.88 10.33%
Staking Providers : 16
ETH Interest : 5.26%
Ethereum is a global, open-source platform for decentralized applications.
Ethereum is open access to digital money and data-friendly services for everyone – no matter your background or location. It's a community-built technology behind the cryptocurrency Ether (ETH) and thousands of applications you can use today.
Ethereum builds on Bitcoin's innovation, with some big differences.
Both let you use digital money without payment providers or banks. But Ethereum is programmable, so you can also use it for lots of different digital assets – even Bitcoin!
This also means Ethereum is for more than payments. It's a marketplace of financial services, games and apps that can't steal your data or censor you.
The native currency of Ethereum is Ether. Ether (ETH) is used to pay for transactions within the network. ETH will become more valuable if there is a high demand to facilitate transactions on the Ethereum Blockchain. Furthermore, ETH is also a store of value, since it is scarce, transparent, and builts on the success of Bitcoin. The monetary policy of Ethereum is to keep the issuance to a bare minimum that is required to incentivize stakers to keep the Blockchain secure. Ethereum is the most decentralized blockchain and a hotspot for decentralized finance (DeFi), which provides composability for applications, that competitors are not able to offer.
Ethereum is a good investment if:
Ethereum has more functionality than Bitcoin. Bitcoin is a digital store of value. Ethereum is programmable money.
Bitcoin can replace the need for a central bank. Anyhow the ecosystem still requires "commercial banks" for financial services such as derivatives, lending, borrowing and many more.
Ethereum is better than Bitcoin because it is able to replace the central bank and commercial banks at the same time. All these financial services can be utilized directly on the Ethereum Blockchain. There is no need for central counterparties.
Currently, Bitcoin is mainly seen as a digital alternative to Gold. Bitcoin is a digital Store-of-Value. Bitcoin is considered the most secure cryptocurrency. If Ethereum is able to take a large market share of the digital store-of-value narrative, then it has good chances to overtake Bitcoin in Market Capitalization.
You will be able to stake Ethereum once the Upgrade to the Casper Protocol has happened. After the upgrade, you can move your coins to Ethereum 2.0 Beacon Chain and start staking ETH.
The new Casper protocol upgrade to Ethereum will unfold many features within 2020. One of them will be Proof of Stake and Staking. The Ethereum network will no longer be maintained by Miners through their computation power, but rather through stakers who operate Ethereum nodes and lock up ether as deposit/collateral.
Companies or Protocols that offer Ethereum staking services are considered Ethereum Staking Pools. When staking your ETH with a Staking Pool you enjoy benefits such a pooled rewards and risks. Ethereum Staking Pools allow users to stake any small amount of Ethereum tokens without the need for the 32 ETH minimum.
By choosing an Ethereum Staking Pool / Staking Provider you should do due diligence to make sure, that your funds are safe and the service offers the best returns for the smallest consideration of risk. Important factors when choosing the right solution are:
The inflation is a sliding scale based on the Total Staked Ethereum. So if the total ETH stake is low, the issuance rate goes down and as stake rises, it starts to rise.
The total inflation issuance is then proportionally distributed between all stakers.
Furthermore, you will proportionally receive a share of all transaction fees being spent within the network.
Without considering transaction fees you will earn:
If you want to calculate your returns from staking ETH you can use the ETH 2.0 Staking Calculator and predict your earnings under certain network conditions.
Staking Ethereum is a profitable way to compound your ETH or generate cash-flow with your investment. It is attractive to stake your ETH when you are planning to hold Ethereum in your portfolio for a long period. The returns for staking are compounding and especially when the Ethereum price is going up, staking is an easy way to earn more ETH and multiply your initial investment.
Users on the Ethereum 1.0 Chain will be able to lock up their Ether in a smart contract and will then be credited that same amount on the Beacon (Staking) Chain in Ethereum 2.0.
At that point, they will be able to stake that Ether and begin to earn rewards directly on the Ethereum 2.0 Chain.
You will need 32 ETH to run your own validator now. However, you will be able to stake any ETH amount with a Staking Provider or Pool which allows users to pool funds and stake collectively while sharing rewards.
There is a withdraw queue that you are placed into when wanting to withdraw ETH from your validator. If there is no queue, then the minimum withdrawal time is 18 hours and adjusts dynamically depending on how many people are withdrawing at that time.
When you stake ETH with a Staking Provider, there are individual lock-up periods. Please make yourself familiar with the conditions of your chosen Provider before starting the staking journey.
Validators on the Ethereum Blockchain are subject to slashing conditions and losing the principal. If the validators of your Staking Provider go offline at any point in time, he will be penalized.
Please make sure to choose a trusted Staking Provider for ETH staking services, which has a reliable infrastructure setup. Alternatively, they might offer an up-time guarantee or insurance. In that case, you will be even safer to protect your funds and enjoy maximum returns.
Taxpayers involved in Proof of Stake (PoS) validation (stakers) have no direct tax guidance as to the tax treatment of their staking rewards, which makes it difficult for them to evaluate possible tax positions as they prepare their federal and state tax returns. This means that taxpayers must adopt a tax methodology that they believe is supportable on audit, subject of course to judicial review.
Many taxpayers argue that you are likely liable for income tax if you received rewards from staking your Ethereum. However, please make yourself familiar with the laws and taxation in your local jurisdiction and consult a tax expert for guidance on that matter.