Is it worth it to stake your Ether?
By Ethereum (https://www.ethereum.org/assets) [CC BY 3.0 (http://creativecommons.org/licenses/by/3.0)], via Wikimedia Commons
Ethereum is switching to Proof of Stake as soon as early 2018. The Casper protocol has been formalized, the specification is complete, and now the implementation phase can begin. Depending on how long it takes to implement and test may determine how it all plays out.
The question is will it actually be worth it to stake Ether in the first place? Will people be able to do it securely? I have my doubts that individuals will be able to securely stake if we are talking large amounts of Ether (1000+) because the price of 1000 Ether could reach into the millions of dollars. There may be attempts to decentralize this with staking pools but again the question remains whether or not people will think it's worth it to stake?
What amount of interest from staking would it take to be deemed worth it? In my opinion it has to be over 6%. The federal reserve gives 6% dividends to all banks who are a member so if the federal reserve operates in this fashion then it's a very similar structure to the federal reserve. At the same time inflation exists so if the interest from staking isn't high enough people would be foolish to bother and this is where things are most concerning.
In stocks a person can get around 8% yearly growth in value along with 4-5% annual dividends. So why would someone choose Ether over stocks? A company might choose Ether for political reasons but why would an individual investor choose a naturally high risk investor to park their wealth?
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6%-14% will likely be the market range. Dash pays about 9% for the Master Nodes depending upon how many nodes there are. I would expect many hedge funds to stake in. This topic is not being talked about enough but I am confident it soon will be. Thanks for bring this up.
At 9%+ it becomes attractive enough to take the risk. At 6% or less it's not in my opinion. Anyone who can get over 9% of their portfolio increased is likely to stake but then how would that work? Where would they get the ETH to do it without spiking inflation?
To get the return they will have to buy in or already hold the ETH. There's only going to be +-100 million Ether w/ small inflation less than 2% per year. A common misconception is that ETH has unlimited supply mostly made up of Bitcoin Max. trying to knock the price down. Ether actually has a very finite supply. Ethereum Foundation just does not want to release official number yet until they get first hybrid Casper release most likely around late winter with the next upgrade. The return is going to vary upon market demand, how many nodes stake and amount of gas being burned. Looks like full release will come out in 2018 which would only leave about 5-7 million more ETH to be mined, then once POS released supply is basically capped. So even lower inflation than Bitcoin will have. I think once finally details come out it will be very positive for Ethereum's price..
This could also be reason ETH price is being manipulated to stay right around $300 as large players accumulates for the staking returns that is coming. A thousand ETH would earn $120,000 a year.if price of ETH goes to $1000.
With the potential rise of ethereum price we could see good gains besides staking and this encourages more holding than day trading so helps the price
Thanks for sharing your opinion
Staking is not the reason I hold ETH. It's the amazing projects that are taking place on the platform that keep me holding.
As long as it remains the Top platform for dApps its worth keeping longterm and once the dApps hit mass adoption it will skyrocket.
When a better and more popular platform will come along I might jump ship (I hold EOS too)....but frankly I don't see it happening....Ethereum is an ever evolving beast and has the developers in place to keep the technology always at the cutting edge.
You are great sir your post is very useful thanks for sharing
Ethereum is one of the most reliable crypto...
It is worth it to stake Ether...
& Its damn absolutely...
Nice article...👍👍 @dana-edwards
been the second most valuable coin after BTC its worth staking as the coin market grow it will also grow thus becoming a sure investment
Ether is definately undervalued right now. When Bitcoin stops pumping ETH wil follow.
it will reac a place where BTC will be to expensive to buy so people will start looking for the next best thing and that will be ether since it will be affordable to most people
What do you think an appropriate price for ETH is right now?
smart people would choose the high risk cause they know the returns will be more, i think in the long run people will start to stake as they become confident in it, lets wait and see is what other will do
Better to stake real DPOS coins on platforms built specifically for that.
Coins like EOS will be more profitable to stake.
That is indeed interesting, because of the big relevance of that coin. Normally all Proof of Stake coins are crap.
can you explain what is staking?
Think of it like a term deposit. You steak your wallet holdings and receive interest for keeping your wallet open.
Its leader has a history of attacking projects others than his, that's not healthy and the economics behind a coin that ins't hard-capped is madness...wait until EOS gains enough traction, then you would see the twitter wars increase...the coding is great but their mind games is ugly, if you study the economics behind it, then you would realize its no different from central banks printing money
Its super quick also, its a dash fork. Staking is slow but moving along..
I'm aware of it.