1.2.0. One Important Question to Consider

1.2.0. One Important Question to Consider

Question: If a blockchain is built to produce crypto coins through the POS method, where will the initial coins come from that will be used to stake into the blockchain to mint new coins?

First Answer: ICO

Cryptocurrencies using POS often start by selling pre-mined coins. This means that some coins will be created artificially and distributed for participants to stake into the blockchain.

An example of this kind of crypto is Gold Secured Cryptocurrency (GSX) by Apollo Fintech company. Pre-mined quantities of GSX were distributed to participants at a cheap price. Participants could then stake their pre-mined GSX coins to get more GSX coins.

In other to maintain fairness and not disrupt the Crypto Market unduly, the distribution of these pre‑mined coins are supposed to be carried out in an open and transparent manner. The process to achieving this transparency is what is called ICO.

ICO stands for Initial Coin Offer, which is the crypto version of the Initial Public Offer of a company that is listing its business shares in the stock market for the first time.

Just like IPO, the ICO has a set of rules. When the POS algorithm first came out, some unscrupulous companies tried to outsmart the public with their ICO’s. That brought in government regulations to the industry.

ICO is a presale period. Investing in a good ICO can make you rich overnight. Imagine you buy a crypto at an ICO price of 0.001 cents, and after a period of say 3 months of presale, the crypto is then listed in the Crypto Market and its price jumps to one dollar, it means you have made 1 000 percent profit in just 3 months!

1 000 percent profit is actually quite smaller than what many good ICO’s do deliver.

The question is: where do you get such a good ICO to invest in?

The answer is you just need to be in the Crypto Market and get informed. The more you know, the more you will see and will be able to take advantage of the markets to make good profits.

For instance, Enjin company released an ICO for their NFT token, Efinity, at 0.2 dollar in June 2021. The ICO period lasted for about one month during which the company raised 18.9 million dollars. Efinity was then listed in the Crypto Market, specifically in Uniswap in July 2021. The price of Efinity within three weeks of listing jumped to about 1.5 dollars, generating 650% profit for the ICO investors.

Indeed, a good ICO can generate huge profits!

If you are daring and savvy, you can start your own company, run your ICO’s and reap the financial wealth that the digital revolution has brought into our world!

Second Answer: Airdrops

Another way of getting initial coins for staking in a POS system is that a company can launch their blockchain with the POW algorithm to accumulate some coins. Once a sizeable number of the coins have been accumulated, the blockchain is later switched over to POS algorithm.

A good example of one such crypto is Ethereum. It was launched in 2015 with POW as the means to mine the Ether coins. However, from 2020, the Ethereum blockchain started migrating to POS. The POW mined coins are now used to stake into the Ethereum POS system. Thus, if you have Ether coins, you can stake them into the Ethereum blockchain to obtain new Ether coins.

An interesting aspect of this is that by staking a particular crypto in a wallet, you can receive a second type of crypto as a reward. These second free cryptocurrency coins you received for staking a particular cryptocurrency are called Airdrops.

Airdrops are free money. But why would anyone give you free money?

Airdrops serve a number of purposes, principally, to advertise the crypto project. Free money attracts crowds and such crowds will help advertise the crypto project.

To qualify for airdrops, the issuing companies often demand some requirements from participants. These requirements are basically of two kinds:

•         Buy a Crypto

The issuing company may want you to buy a certain amount of crypto to qualify for their free airdrops. Some companies may give one free token as an airdrop for every one token you have bought.

•         Advertise the Project

Some companies will require you to post the details of their projects in some social media platforms such as Twitter, Facebook, Telegram, etc. before you are given the free airdrops. These tasks are to help advertise the crypto project.

In summary, a company can give out pre-mined tokens as airdrops, which you can acquire and then stake into the POS system to generate more cryptos for you.

Indeed, good airdrops can be a good source of income for you.

The question is: Where do you see good airdrops to participate in?

The answer is the same as the one given for ICO above. You just need to be in the Crypto Market and follow the market movements. The more you know, the more you will see and take advantage of the opportunities to make good profits.