Solana is a popular cryptocurrency and a long-time favorite of crypto investors. But while information about mining Solana might be floating around, it is not completely accurate.
But can you still get additional rewards with Solana? Sure you can! In this guide, we’ll clarify why mining doesn't work for Solana and offer alternatives to it.
Can You Mine Solana?
If you're interested in earning some rewards for your crypto, you've definitely heard the term mining. Miners solve complicated math problems to validate transactions and secure the network. However, this approach takes a large amount of computer power, resulting in high energy usage and hardware costs.
So can you use mining to acquire additional SOL tokens? No, you cannot mine Solana in a traditional sense. Unlike Proof-of-Work (PoW) cryptocurrencies that can be mined, Solana uses a Proof-of-Stake mechanism that operates differently.
But don’t worry, you can still gain rewards on the Solana blockchain through staking. It involves assigning some of your SOL tokens to a validator who verifies transactions and helps secure the network Validators are paid transaction fees for their efforts. Part of these fees are divided proportionally among those who delegated their SOL tokens to the validator.
Look into our Solana staking guide to learn more.
What's The Process For Obtaining Solana?
You may wonder how to mine Solana on different devices if you're interested in mining it. Mining on a computer usually requires a GPY or specialized hardware called ASIC along with a stable internet connection. It also consumes a significant amount of electricity. There’s no way to mine Solana on PC as it doesn’t use a PoW mechanism to secure the network.
But what if you want to mine Solana on your Android device? Since Solana uses the PoS mechanism, you don’t have the ability to mine it on Android. Instead, you open one of the staking services on a smartphone or PC to get rewards by staking.
Knowing that you cannot mine Solana, we will explain how to stake it. As you would expect, the process of staking is quite different from mining, and you have several options:
- Delegating: It’s the most common and accessible method. Here, you delegate your tokens to a trusted validator, so there’s no need for technical knowledge. The rewards depend on the validator’s performance and the amount you’ve delegated.
- Using a Crypto Exchange: Many crypto exchanges offer staking services for Solana, and it’s a great way for beginners. Just make sure to examine the platform’s staking terms and fees before committing.
- Using Staking Pools: Such pools collect SOL from numerous users and delegate it to validators, frequently including features such as automated restaking of incentives for compounding profits. They streamline the process yet often charge additional fees.
- Running a Validator Node: This method offers higher rewards but requires significant technical knowledge and resources, so it is only suitable for experienced users.
Let’s explore the process of staking Solana through a validator. Here’s a general guide for Solana staking:
- Choose a Solana Wallet
- Acquire SOL Tokens
- Pick a Validator
- Delegate Your SOL
- Start Earning Rewards
The process of staking Solana is the same whether you're using a PC or a mobile device. Your chosen wallet will walk you through the delegation procedure on your preferred platform.
Before you start staking, find out how crypto staking is taxed.
Benefits and Risks of Solana Staking
As with any other form of investment, staking comes with its advantages and risks. The benefits of Solana staking include:
- Passive Revenue: You can acquire rewards without actively trading or engaging in the process.
- Accessibility: Staking takes far less technical expertise and hardware than mining.
- Low Barrier to Entry: The staking minimum varies depending on the platform, but they are usually pretty low.
- Scalability: Staking consumes considerably less energy compared to mining.
Of course, there are also risks associated with Solana staking:
- Impermanent Loss: If the price of SOL drops down while you stake, your holding will decrease in value, even with rewards.
- Slashing: In case the validator you’ve chosen shows malicious behavior, you can lose some SOL tokens.
- Decreasing Rewards: The rewards you earn are influenced by the total amount of SOL staked on the network. If more people stake SOL, the rewards for each staker will decrease.
You now realize that Solana cannot be mined, but there are other ways to join in the network and earn rewards. We’ve explored how Solana staking works as a mining alternative, so you can start earning with it.
We hope this guide was helpful! Please leave your questions and thoughts in the comments!
