Cardano and Polkadot are the two cryptocurrencies that work on a different algorithm called ‘PROOF OF STAKE’ than others that work on ‘PROOF OF WORK’. Both these currencies are alternative coins.
Today we are going to talk about staking rewards, where we stake our coins and in return, we get an annualized return. As per recent reports, the number one currency to have stake dominance is Cardano and after that it is Polkadot.
When you stake your coins, you cannot use those coins to do trading meaning you cannot sell, buy or neither use them. For the staking period, it will be unavailable for you.
For that specific time, you get interests for your stake money, and if you want you can retrieve them anytime and use it for any other purpose. Before moving forward in bitcoin trading, you have to read How useful is Bitcoin?
Navigation of Contents
POLKADOT
It is an open-source network formed by the web-3 foundation. DOT is another name for its network. Polkadot is founded jointly by Gavin Wood, Peter Czaban, Robert Hebermeier. Gavin is one of the founders of Ethereum also. He worked mainly for solidity network which is a code for Ethereum. Its currency name is DOT. It wants other blockchain networks to run on its blockchain network.
One of the famous stable coins that will be running on Polkadot's blockchain is going to be ‘TETHER’. This is going to be beneficial for Polkadot because tether holds the best position amongst all the stablecoins in the crypto market.
CARDANO
Cardano is also called the 3rd generation cryptocurrency after Bitcoin and Ethereum. It is also founded by one of Ethereum’s co-founder Charles Hoskinson. It is based on a scientific approach which is why it is more trusted for future investments.
It has a more advanced feature because it is trying to solve the present problems that are arising which is why it is being called the 3rd generation cryptocurrency. It is also called so because it is a better and improved version of the other two currencies.
Like any other currency, Cardano’s currency is ADA. ADA is a pre-mined coin. As ADA coins are pre-mined their transaction cost is really low which means they consume less energy and in comparison, is less polluting to the environment.
COMMONALITY BETWEEN BOTH OF THESE CURRENCIES
- They both work on a proof of stake mechanism, where people stake their coins to earn annual returns and for that specific time those coins cannot be used for any purpose.
- Both these currency work on three points of development that are interoperability, sustainability and scalability.
LET US UNDERSTAND INTEROPERABILITY
It is one of the main focus of these networks. Let us understand it through an example: if we talk about WhatsApp, this platform allows us to use other’s platform modules without opening that specific app, if you send a youtube video, the person can see it without going to the youtube app.
This means it allows in its network other’s network as well. Different features of a platform can be used in one platform. This is called interoperability. In today’s blockchain world they are bringing this new network. It enables referring any type of data across any type of blockchain.
- They are incorporating the features like a smart contract.
- Both the currencies are altcoins.
CONCLUSION
Hence, we can conclude that both these currencies are staking currencies. The brief article has strived to explain things in the easiest way possible. I hope it will prove a beneficial article to you if you want to stake your coins in any of these two currencies.