Staking: what it is in cryptocurrencies, how it works, risks

The attention to the world of cryptocurrencies in 2024-2025 is not due to banal hype. It provides many opportunities for earning. At the same time, it requires not only an understanding of technology but also the ability to be in the right place at the right time. According to the latest study, the number of users of cryptocurrency services in 2023 increased by 300%. In 2025, the trend will continue, opening up new opportunities for earning. The main thing is to choose the right strategy and not miss your chance.

There are many ways to earn money on crypto: cloud mining, trading using automatic strategies and, of course, deeper and longer-term investment approaches. Let’s talk about this in more detail in the article.

Cloud mining and trading: new horizons for passive income in crypto

Cloud mining, when you rent out your capacities for cryptocurrency mining, certainly remains one of the most promising ways to earn money on crypto. This is no longer exotic for enthusiasts, but today’s reality. In 2025, the growth in popularity of the Genesis Mining and Hashflare platforms promises to be colossal. The services allow users to launch virtual mining farms without having to invest in expensive equipment.

However, this method of earning from crypto is associated with certain risks. For example, at some stages, there may be a slowdown in productivity growth due to changes in algorithms or a drop in cryptocurrency prices. But for many investors, this remains one of the most stable methods of earning passive income.

Trading and automation: how new methods make it easier to earn on crypto

Now let’s look at trading. In 2025, it will become more accessible to beginners thanks to the development of automated platforms such as Cryptohopper and 3Commas. These tools allow you to create trading strategies with minimal human intervention, which reduces the risk of errors and makes trading accessible even to beginners. For example, with automated trading, you can set up a trading bot that will buy and sell cryptocurrency according to a given strategy, without requiring constant monitoring.

Trading and cloud mining can work in tandem. One popular option is to mine Bitcoin through cloud farms and simultaneously use bots to trade altcoins, such as Ethereum or Solana.

Here are some ways to optimize the process:

1. Automated trading strategies. Use the Cryptohopper and 3Commas platforms to set up trading bots to buy and sell cryptocurrency depending on market signals.
   Asset diversification. Invest not only in Bitcoin, but also in other promising cryptocurrencies: Ethereum, Solana, or Cardano. This will reduce risks and increase income potential. Bots will help adapt strategies to a changing market.
2. Optimize mining capacities. Choose cloud farms that offer high-performance services at affordable rates. Check reviews and performance statistics to make sure you can make the most profit.
3. Use arbitrage. Along with mining, explore arbitrage trading opportunities. By using bots to arbitrage between different exchanges, you can take advantage of the difference in cryptocurrency prices.
4. Reinvesting profits. Instead of simply withdrawing your earnings, reinvest them into expanding your mining capacity or spend them on buying cryptocurrency for trading. This will help increase your profitability with each cycle.

Where to start in 2025 so as not to lose money

If you want to try one of the ways to make money on crypto in 2025, it is important to act wisely. The first step is to choose a platform for cloud mining. The best services offer transparent conditions, a good reputation, and provide access to capacities that can provide stable profits.

Staking and holding: long-term strategies for confident growth

Long-term investment strategies staking and holding are gaining popularity among crypto investors. If you want to earn money steadily, but not be too involved in the process, these methods of earning money on crypto are ideal.

Staking is a process in which you freeze your coins for a certain period of time to maintain the security of the blockchain and receive passive income. Today, Ethereum 2.0 and Cardano are the leaders in profit from staking. For example, the yield on Ethereum is 4-6% per annum, depending on the conditions. This is a great way to profit from your cryptocurrency portfolio.

Unlike staking, holding is a strategy in which you buy cryptocurrency and hold it for a long time, expecting that the price will increase significantly over time. An example of a successful holding is buying Bitcoin in 2016, when its value was less than $ 1,000, and now it exceeds $ 95,000.

Long-term strategies against the backdrop of instability of other ways to earn money, including trading, may become the basis for investing in crypto in 2025.

Risks and benefits: how to minimize losses in the world of cryptocurrencies

Despite all the advantages, cryptocurrency remains a high-risk asset, and it is important to understand how to properly manage risks. From the very beginning, determine the maximum acceptable level of losses and do not go beyond this value.

Divide funds into several cryptocurrencies to minimize the risk of losses in the event of a drop in the price of one coin. For example, if you invest only in Bitcoin, and its price drops sharply, you will lose a significant part of your capital. But if your portfolio also includes Ethereum, Ripple, and Polkadot, the fall of one of them will not lead to large-scale losses.

Also, do not forget about security. Store cryptocurrencies in reliable wallets such as Ledger or Trezor to protect your assets from hacking. In 2025, data leaks or hacker attacks can be a serious risk if you don’t take care of protection.

How not to miss out on opportunities in the crypto market in 2025

With tools like cloud mining, trading, staking, and holding, there is every chance not only to stay afloat, but also to benefit from growing trends. But do not forget that every way to earn money on crypto is associated with risks. Distribute investments correctly, choose reliable platforms, and always follow market trends.

Staking is the process of locking cryptocurrency into a network to support its operation and receive rewards for participation. Unlike mining, which requires expensive equipment and significant energy costs, the Proof of Stake (PoS) principle is used here: instead of computing power, funds “frozen” for a certain period come to the fore.

How to make money with cryptocurrency staking? In exchange for their coins, which participants lock into the network, they receive passive income in the form of new tokens.

How does cryptocurrency staking work?

How do you make money staking cryptocurrency? To understand how the mechanism works, you need to familiarise yourself with the basic conditions:

1. Proof of Stake (PoS): The system on which staking is based. Unlike Proof of Work (Pow), which requires computing power, the scheme allows miners to earn rewards by locking their coins into the network. The more assets are frozen, the greater the likelihood that participants will confirm transactions.
2. Locking up funds: When an investor locks up their coins, they participate in the transaction confirmation process and protect the network from attacks. These funds cannot be used or sold until the lockup period expires.
3. Reward: In exchange for freezing coins, participants receive a reward based on the amount of frozen funds and the length of their holdings. This reward can be given in the form of additional tokens or as a percentage of the total number of frozen assets on the network.

Types of cryptocurrency staking

There are several options for locking cryptocurrencies, each with its characteristics and suitable for different types of investors. The way to make money with cryptocurrency staking depends on the strategy and platform chosen.

1. Fixed Staking

The simplest and most predictable method is when the holder of capital freezes their funds for a specified period, receiving a fixed income:

1. Essentially, in this case, the investor chooses an asset and a platform, after which they lock their coins for a predetermined period. Binance and Coinbase generally offer fixed staking rates that can be calculated in advance.
2. Advantages: predictable returns, minimal risks, and a simple process. The participant knows exactly how much they will receive for a specified period.
3. Disadvantages: Unavailability of funds in case they need to withdraw them quickly. This method is not suitable for everyone, as the money remains frozen for a long time.

2. DeFi Staking

DeFi operates on decentralised financial systems where digital currencies are frozen without intermediaries such as centralised exchanges. Here, users interact with blockchains directly through smart contracts:

1. In essence, in DeFi protocols like Ethereum 2.0, participants lock their funds through smart contracts and earn revenue from the operation of the network. This format can provide higher rates of return compared to centralised services, but also carries greater risks, such as errors in the agreement code or vulnerabilities.
2. Advantages: high rates of return, greater control over assets, no intermediaries.
3. Disadvantages: high risks associated with vulnerabilities in smart contracts and possible technical errors.

3. Perpetual Staking

This method allows investors to lock their funds for an indefinite period, while participants can withdraw them at any time:

The essence is that coins remain frozen in the network, but are not tied to a specific period. This allows investors to maintain flexibility if they need to sell assets.
Advantages: the ability to withdraw money at any time, flexible management. Disadvantages: Reduced yield compared to the fixed method, as the system can offer lower interest rates for a perpetual lock.

How to Make Money Staking Cryptocurrencies: How to Choose a Coin

Choosing a cryptocurrency to lock is one of the most important steps that directly affects its profitability. What factors should be considered?

1. Profitability

Profitability depends on how many coins the network locks. The higher the interest rate, the greater the dividend potential. High yields can come with risks such as token instability or high volatility.

Example: Bitcoin (BTC) and Ethereum (ETH) often offer lower rates than lesser-known altcoins, but are also less risky in the long run.

2. Network Stability

It’s important to consider how stable and developed the chosen cryptocurrency is. Blockchains with large capitalisation and community support typically demonstrate good stability and a high degree of trust, which reduces risks during the locking process.

Example: Ethereum 2.0 is a high-cap cryptocurrency with a large community and strong developer support. Network stability and PoS technology make ETH a good choice if you want to learn how to make money with staking.

3. Liquidity

This is an important factor that influences the ability to enter and exit the fund lockup process. If there is low demand for a coin, this can create problems when selling the asset.

Example: Bitcoin and Ethereum have high liquidity, allowing you to quickly sell the cryptocurrency.

4. Technology and Project Team

You need to invest in cryptocurrencies created by reliable development teams. Find out what solutions are used for network scalability, security, and resilience.

Example: Solana (SOL) and Cardano (ADA) are projects with strong developers who are actively working on improving their blockchains. A stable team and innovative technologies increase the likelihood of the coin’s value growing in the future.

Conclusion

Making money with cryptocurrency staking isn’t just about choosing a coin and a platform to freeze your funds. This is a strategy that requires analyzing many factors: from the token’s profitability and liquidity to network and technology stability. Every investor should carefully approach the choice of cryptocurrency to stake in order to reduce risks and make a profit.