Many people would like to be validators of transactions (miners) of Bitcoin (BTC).
The reason is very simple. The validators are the people that receive all the new Bitcoins created.
Being a miner implies being paid, so the incentive is obvious.
However, 88% of the total amount of Bitcoins that have been programmed to exist already have been mined. In addition, to last year in May, there was was halving , in which the creation of new BTC has drecreased by half.
As if that were not enough, the difficulty to be able to mine a block today is enormous, requiring a large investment in powerful machines, import taxes and electricity, as specified here.
In summary, it is not feasible to mine Bitcoin at home anymore.
Is there a way to be a validator of a blockchain with a simple computer in your own home?
The answer to this question is yes, with the new Blockchain Avalanche.
This promising platform uses a new consensus protocol that allows high decentralization, high transaction throughput and high scalability.
There is no need for high investment in processing machines that need to be imported at very high costs.
Nor does it consume electricity because the Avalanche validation system is not based on computational power (Proof of Work — POW), but rather based on the amount of cryptocurrencies deposited for validation (Proof of Stake— POS).
The validators’ reward is proportional to the amount of cryptocurrencies kept in stake, deposited at a specific address to validate the transaction.
Additionally, the processes is secure because you keep the private keys is with you the whole time.
Validators are paid with $AVAX, the Avalanche native cryptocurrency.
But how many $AVAX will be offered as a reward for validators?
The creators of Avalanche were very generous with the validators.
Of the total 720 million $AVAX that will be issued, half of the tokens will be offered as a reward to validators.
The distribution of the coins over time will follow a logic similar to that programmed by Satoshi Nakamoto in Bitcoin (BTC).
The estimated APR in the first year for those who keep the $AVAX in stake is beeetwen 7 to 12%, according to information in the initial public sale.
The minimum time to keep in stake is 2 weeks and the maximum 52 weeks, but the latter can be postponed.
The longer you keep in stake, the greater the reward.
There are other blockchain platforms, such as Ethereum, that are migrating from POW to POS, which will also reward validators in a similar way to Avalanche, but you need to be aware that punishments will be imposed on validators who do not comply with the rules. Basically these validators can have its stakes slashed.
For example, if the validator does not stay online 100% of the time he may lose a portion of the cryptocurrencies held in stake.
There are also other types of penalties for those who do not behave according to the rules.
Polkadot, another blockchain that is becoming relatively popular recently, also has a validation reward system, but with penalties as well.
As a Polkadot validator you need to be very careful because it´s even possible you lose all your DOT staked.
Avalanche has the advantage of not creating any kind of slashing for the validators.
If there is a drop in the internet connection, for example, the Avalanche validator only stops receiving the reward during the period when it is offline.
At no time there will be a penalty with a decrease in the $AVAX cryptocurrencies staked to validate the network.
To become an Avalanche validator it is necessary to keep a minimum of 2000 $AVAX in stake, or delegate your stakes to other validators. In both cases you keep the private keys under your control.
So even for those who have few tokens, it is also possible to receive this passive income with security and convenience.
For those who participated in the initial public sale and have a good part of their tokens locked for a vesting period of 1 year and a half, it´s also allowed to use these tokens for the validation system.
Will the $AVAX have a similar increase in value in the coming years?
If it happens, the validators who will receive the new $AVAX and hold the tokens will benefit immensely with a considerable increase in equity.
In conclusion, becoming an Avalanche validator is a very promising opportunity and has several advantages comparing to other blockchain platforms.
There are no penalties and there is still a good chance of huge future gains.