mining vs staking

Similarities

Crypto mining and staking play a crucial role in ensuring the operation of each blockchain network. Both concepts help to maintain, improve, and secure their respective blockchain networks.

Both concepts lead to the creation of new coins on their networks.

Stakers and miners earn rewards for maintaining and securing their respective blockchains.

Differences

Mining is associated with a Proof-of-work consensus mechanism, while crypto staking is attached to Proof-of-stake blockchain networks.

Mining requires specialized equipment that consumes enormous amounts of energy. Staking does not have high energy demands or require special computers for maintaining a blockchain.

The first crypto miner to solve the cryptographic puzzles adds a new block to the network. For staking, nodes add new blocks by locking their native coins into a smart contract.

To earn rewards, miners must solve cryptographic puzzles. In contrast, nodes simply need to lock their cryptocurrencies to validate transactions on the blockchain. Nodes will earn rewards based on the amount of their staked tokens.

Mining requires high computational power. Hence the need for specialized mining equipment. In contrast, nodes that commit a significant number of crypto assets to the staking pool have a higher chance of becoming blockchain validators.