Staking explained – a few Answers to questions about Staking Electra
What is POS (Proof of Stake) as compared to POW (Proof of Work)
The first Cryptocurrencies, notably Bitcoin, use Proof of Work (POW) as method to define who (which “miner”) can add the next block. That is, potential miners need to solve additional mathematical problems with are unrelated to the task of processing transactions. This is called “difficulty” – the aim
is to make the threshold for mining high enough so that not to many blocks are mined. Increasing difficulty off expensive coins leads to extreme waste of resources, notably electricity. Proof of Stake tries to avoid this waste. Instead of solving mathematical puzzles, potential miners (here called stakers) need to leave a certain amount of coins “unspent” – that is not moved – in their wallet. Thus the name – they have to put their coins “at stake” – while they are staking, they can’t be sent.
So – what is staking?
Leaving your wallet online, to support the network, and leaving some of your coins unmoved on the same address for some time, and thus earning reward.
My wallet is fully synced, but it still says – not staking because you don’t have mature coins?
For staking Electra, coins need to rest (not be moved) for a minimum of 24 hours. So, if all your coins are just new in the wallet, or if you have recently rearranged all the coins in your wallet, or the one and only block has just staked, there are no coins “mature”, so your not actually staking. Wait 24 hours, and the sign should turn green.
How long thus it take until I get reward?
This depends on how many coins you stake, and on how many other coins are staked by someone else. You get reward every time you find a block.
How much is the reward
Basically, 50 % annually. There is no fixed reward per block, reward is proportional.
How is it calculated
Everytime a new block is found, your wallet selects an input (a pile of coins that have been added to the wallet at the same time / together) and calculates the full reward for this block. That is (number of coins x time [CoinDays] / 730) (730 is 2 x 365, thus 50 %). Then, the input is reset (marked as spent) and together with the reward saved as a new input, with now zero CoinDays.
What does “Your Weight” mean (near the staking arrow)
This is the total of CoinDays staking (All mature coins in your wallet – from one or more addresses – multiplied with their respective age) (This number + the number of coins in your wallet / 730 gives the pending reward).
What does “Network Weight” mean
This is the cumulated weight of all the wallets on the network that are actually online (staking coins x
age).
What does “expected time” mean, how is it calculated, and is it reliable?
It’s a raw guess on how much time might be needed until your wallet might stake next. The formula is basically (network weight / your weight = number of blocks until your weight would be sufficient / by number of expected blocks per day) It’s not reliable – if you just started staking, the value will be
to high. But even if your staking for quite some time, change in the network weight (wallets that have been offline coming online again – or vice versa) will influence it. If you have only relatively few coins in your wallet, it might effectively take significantly longer than shown, as much larger wallets will push ahead with their many coins – and if you have few very large blocks, it might actually take significantly shorter.
Will I get the full reward even if I only get a block after quite some time.
Yes, reward is always calculated for the full CoinDays of the input that gets reward. I might, however, miss out on compound interest. (Staking reward for coins staked earlier).
Do I need to have my computer running and online 24/7
While a high number of online full nodes (staking wallets) is essential for the smooth operation of the network, occasional downtimes do not affect your expected reward. You can only get reward whenever you find a block – but for the calculation of the reward, only the time the coins have not been moved at their address at the blockchain is relevant, and not the uptime of your wallet.
Should I split my coins in many small inputs for better staking results, or rather combine them in to as large blocks as possible?
Mostly “the larger the better” is a good rule of thumb, because many small inputs actually increase the time for everyone to get his due reward, because usually only ONE input is reset / rewarded at each block, and the number of blocks per day is given. But if you have few very large inputs, you will likely get reward early, but each time you get reward for an input of less than 11 days of age, the wallet will create TWO outputs of equal size at the output, thus creating smaller and smaller inputs, and slowing the network down.
So how to get the best performance for the network (staking fastest)
If your wallet contains to many small inputs, you can recombine them manually (send them to your own address) (Very small inputs that are in the same wallets with much larger ones will likely never get reward, because they are squeezed by their larger brethren.) To avoid losing many CoinDays (and thus potential reward) you should combine only inputs that have recently staked… - and thus not yet accumulated a lot of potential reward. And yes – taking a wallet with a small number of very large inputs offline for a few days will actually accelerate staking for everyone – it reduces network weight and makes it easier for others to stake, and once you bring your wallet online again, you will have a large weight and stake sooner – especially if you leave it offline for enough time to avoid autosplitting.
