Just seen a post on FB regarding staking. I am very new at this but please forgive me if I am reading it wrong. By the sounds of it billions of ADA will be distributed to various people through staking.
Wont this just dilute the price even more?
I understand the amount of ADA that will ever be in circulation and the current amount that is already available. but if people just receive ADA for being online and doing what needs to be done for staking it hardly seems fair and with ADA coins that will be 45 billion in total and people receiving it randomly in staking i feel the price will just go down and never be worth anything more.
Please help me understand this as this article really has me worried. As I mentioned im new in this whole thing so be kind if what I say here makes me look like an idiot - just want to know
If your core fear is that minting new coins will affect ADA’s price then I have a very simple solution for you.
Think of Bitcoin. That blockchain has been minting new coins since 2009(!). Has its price decreased? No, although the number of coins in existence increased wildly, itsprice still increased a million fold.
And just as a general recommendation – don’t think of making a quick buck when thinking about Cardano. The project isn’t even decentralized yet for god’s sake. I mean we’re literally trading the blueprint of a sketch of an actual system that is to come
If I were you, I would just take advantage of the low prices and purchase now while it’s cheap.
I hear you and thanks, major difference is that Bitcoin will always be max at 21 mil bitcoins. Cardano will be 45 Billion. So there is a substantial difference in the amount that will be available. And Im not talking about making a quick buck, and I know that this is a long term thing. Im asking how staking will affect the price. Im sure if there are 45 bil coins going around the value will decrease?
Not exactly, though price predictions are generally a gamble, when you are staking your ADA that portion of your wallet is locked (you can’t spend ADA that you are staking). Combine this with the fact that, the more ADA you accumulate for staking, the higher your reward will be and you will see that demand is increasing, while the total number of coins available for sale is decreasing (since funds used for staking can’t be used to speculate and sell on an exchange).
Price will go up initially when staking goes live, i suspect that it will stabilise after a while, when people who earn enough stake (meaning their bankroll has gotten big enough for the reward they are seeking) sell their ADA aqcuired through staking to newcomers who want to build up their bankroll.
And so the circle repeats untill growth (hopefully) reaches mass adoption stages.
Awesome thank you, I didn’t realize that if you decide to stake then that portion of your ADA will be locked. This helps a lot.
I strongly believe this is not correct. I remember iohk team members stating the opposite many times. I don’t find the video right now.
I’m with @Bullish, the ADA you are staking you are not able to spend. Makes sense if you think about it, you can’t say you are staking X amount of ADA and then go ahead and spend it since that would be a misrepresentation of how many coins you actually have, and this is relevant since more coins effectively means bigger rewards.
My understanding is that the state of stake will be locked (a screenshot is taken) in the beginning of the epoch that will be used for determining who creates block in the next 5 days. In the meantime you cannot expect people not to use their ada.
See here: https://staking.cardano.org/
CONTROL OVER FUNDS
The act of delegation does not relinquish spending power. Only the right to participate in the protocol is delegated. Funds can be spent normally at any time.
Correct, but staking will be introduced before anything even remotely close to mass adoption will happen. Doesn’t mean that people won’t spend their ADA.
However it does seem more likely that people will try to accumulate as much as possible untill there is a broad array of goods and services that can be bought with ADA.
I agree with you.
I remember a similar question being asked on Reddit in the EthTrader forum early last year. I had been trying to accumulate ETH at ~ $15 to get up to the threshold for staking. My answer then was that I would be overjoyed with $50. I had no clue that it would go to $1400 and back down (and, no, I wasn’t smart enough to sell).
I hope there’s a nice surprise for all of us somewhere down the line.
you’re right! Charles said that you don’t have to lock them!