What is Cardano Staking

PoS staking is an active process. It can ensure passive income but it is a reward for the stakeholders activity.

The primary goal of the Proof-of-Stake (PoS) network consensus is to enable the decentralized network to come to a mutual agreement among nodes about a single version of the truth. PoS is not only about the network consensus and there are very interesting social and financial aspects of the Cardano protocol.

Who owns the Cardano network?

Let’s ask a philosophical question. Who owns the network? Is it the team? Is it pool operators that produce blocks? The IOHK team invented the protocol and its implementation is publicly available on GitHub. The team is far the most significant contributor to the source code. All studies are also publicly available. No single piece of the Cardano source code or study is protected by a patent. Everything is free and available. The team does not own the Cardano network via the source code. Pool operators install a client to their nodes and produce blocks. They are a very important part of the ecosystem. Still, they are not the only owners of the network.

PoS is a unique concept that allows people to own a piece of the network by holding ADA coins. Everyone can buy ADA coins on an exchange like Binance or Huobi. Once you have private keys to the coins you own a piece of the Cardano network. There will be circulating only 45,000,000,000 ADA coins that represent the total stake. If you hold ADA coins then it can be said that you have a stake. By holding 1% of ADA coins you basically own 1% of the Cardano network and thus, you are a stakeholder.

It is the resource that plays an important role in the network consensus. Only owners of the network are able to produce blocks. Block production is the most important function of every decentralized network that aims to be a cryptocurrency. Owners of the network have their own skin in the game and have the best interest in keeping the network running smoothly. Owners usually care about their wealth and business the most. Thus they are the best candidates to conduct the most important function of the network and take responsibility for the production of blocks.

Block production requires operating a reliable node that is connected to the Internet 24/7. Not every stakeholder is able to do so and fortunately, it is not necessary. There is a special role in the Cardano network called a pool…