TL;DR: Buying TRX and storing them is nice, but you’re leaving money on the table by doing that. The TRON network has a couple of ways you can participate in and earn extra revenue on your TRX coins.
In this article, we’re gonna explore the best ways of putting your TRX to work and what’s required to make sure everything functions properly.
How do you mine TRON (TRX)?
So, you have a PC that’s sitting idle and you want to put it to work.
You’ve scoured the internet and saw that one of the ways to earn more crypto would be through mining, but how does that work? Can you mine TRON on your PC?
Mining is a process that can be done using different parts of your computer. These can be either the CPU, GPU or even your Hard Disk.
You heard that right, on networks such as Filecoin or Arweave your HDD is used to earn coins. What component is used for mining depends on the consensus mechanism of the specific chain.
The consensus mechanism dictates how transactions are validated on a blockchain such as TRON. Generally, the primary components used for mining are the CPU and the GPU.
The term CPU stands for “Central Processing Unit”. It is considered the brain of the computer because it does most of the computations. The GPU aka “Graphics Processing Unit” is more powerful than the CPU. This makes it more suitable for mining coins like Bitcoin or Litecoin.
How does mining work?
Mining is a process first implemented in Bitcoin’s Proof of Work consensus algorithm. During the first years, you could mine coins using a home computer or even a laptop. Today, that situation has changed.
Since its inception, mining has rapidly evolved and requires dedicated hardware that’s much powerful than a PC. As more computers join a network the hashrate increases, which means more processing power is needed to validate blocks. This is the case with the most known PoW chain — Bitcoin.
Because of this, miners have switched from using normal computers to highly specialized hardware called ASICs. ASIC is an abbreviated term and means “Application Specialized Integrated Circuit”.
This gives us little information about what they actually are, so let’s dig in. It may sound confusing at first, but the difference between a computer and an ASIC is quite simple.
A computer can do many different operations, but ASICs are built only for mining-specific computations. They are expensive, hard to configure, do not have a screen, and you can’t game on them.
That’s a bummer, so what does an ASIC actually do?
ASICs are noisy, ugly looking boxes that can only perform tasks for a specific chain based on the algorithm they were created for. The specific tasks we refer to are the ones necessary for mining blocks and getting coins. They are also power hungry and consume a lot of energy.
Take Bitmain's Antminer S19 Pro for example, considered to be the best mining rig currently on the market. What does it do? It sits there and makes you money, or Bitcoin to be specific.
In short, a Bitmain Antminer plugs into your wall socket and prints BTC by mining blocks. Buying such a behemoth will add 3.25 kWh to your electricity bill.
If you leave it running daily for 365 days one single device will consume around 28,470 kWh in a year. That’s triple the average annual electricity intake of an 🇺🇸 household. Now imagine thousands of machines running around the world and you get the electricity consumption of an entire country.
So you’re telling me that mining crypto consumes a lot of energy, but how much exactly? Well, it shouldn’t make you surprised to hear that the whole Bitcoin network consumes more energy than countries like Norway, Greece or Switzerland.
This is the reason why many Proof of Work blockchains such as Bitcoin and Litecoin have received backlash for their environmental impact.
Thankfully, the mining industry is integrating more renewable energy sources like wind, solar and hydroelectric. It is estimated that Bitcoin’s use of renewables range from about 40% to almost 75%. These numbers are expected to rise over the next years as renewable energy becomes cheaper.
On top of massive energy requirements, miners are faced with another challenge. ASICs have to be upgraded each year and they become obsolete very fast. The price for such mining devices starts from $2,000 and can easily reach $17,000 if you want the most powerful ASIC hardware.
Due to electricity costs it’s tough to remain profitable while mining, and even the best miners have trouble in that aspect.
Let’s get back to TRON and see how to make money on it. Is it possible to mine TRON on your computer?
TRON’s (TRX) consensus mechanism is based on Proof of Stake. This is different from Proof of Work, where mining is used as the method for securing the chain.
Proof of Stake has validator nodes instead of miners, which do not mine but validate transactions. Validator nodes can run on almost any device and require much less processing power than their Proof of Work counterparts.
Because of this, energy consumption is also much lower on PoS chains — while maintaining the same security guarantees. On the TRON (TRX) chain, blocks are created by validators who stake TRX to secure the chain.
Validators run validator nodes, stake their TRX coins and make sure their node stays online and does the validation work. Besides running a validator node, there’s also easier ways to stake TRON without having to set up your own infrastructure.
In conclusion, you cannot mine TRON because it is not a Proof of Work blockchain and no mining is done.
You can however stake TRX tokens and become a validator or delegator, let’s see how that works!
How to stake TRON (TRX)?
We’re now getting to the good part, making money by staking your TRX tokens.
TRX staking can be done in a few different ways. Each method has its own advantages based on your specific needs. Let’s explore what a staking node is, how TRON can be staked at home, and what a staking provider is.
Staking TRON yourself is a tedious process that involves a few different steps. In order to stake TRON (TRX) first you have to set up a validator node. Some online resources refer to validator nodes as staking nodes, they’re the same thing.
In plain terms a validator node is a program that runs on a computer, either locally or in the cloud. As their name suggests, validator nodes keep the network secure by validating transactions. For their service, validators receive a reward in TRX tokens.
The most important steps for setting up a TRON node at home are: setting up the software, connecting it to the network, and securing your keys. This has a lot of potential for mistakes and can result in your tokens being stolen or lost forever.
To use your TRX for validating transactions on the TRON network, you need to lock them as a guarantee. This “guarantee” (aka stake) exists to make sure TRON validators act in good faith and only mine valid transactions.
The process of running a validator node by yourself is not an easy one for multiple reasons. Staking TRON also requires your node to be online at all times, otherwise you will get penalized and lose part of your staked tokens (also known as slashing).
Validators that go offline or try to attack the network have a portion of their staked tokens taken away. As noted before this mechanism is called “slashing” and it’s a term used in all Proof of Stake blockchains.
On chains such as TRON, slashing is the primary way of making sure validators act honestly. Slashing is an action done by the network itself, no single person or validator can decide to slash another validator.
For most users setting up a TRON validator node is affordable. A minimum stake of 1 $TRX tokens is required for the network to let you validate transactions. While running a validator node, tokens are locked (staked) and cannot be transferred.
Unlocking the TRX tokens has a cooldown period of 14 days. After 14 days validators can withdraw their TRX coins to their wallet. You may want your TRX tokens to be easily accessible in the event of a crash or market pump. In this case, staking with a provider is the best option as the cooldown period is very small or 0.
So, if you’re looking to set up a node at home always keep in mind that your stake is locked and cannot be withdrawn until the cooldown period has ended.
Even with some drawbacks, setting up a validator node at home is beneficial for the network and promotes decentralization. However, do not forget that you need to make sure your node is always up to date and online. Missing an update or having your connection go down for a longer period or time will result in slashing (losing tokens).
Staking at home should only be done by experienced users that can keep an eye on their staking software at all times. The most up to date resources for staking TRON at home can be found at Tron's documentation.
Staking your TRX at home is not for everyone — fortunately it’s not the only way of earning more TRON tokens.
If you do not wish to go through the hassle of setting up and configuring a TRON node we have good news for you — there’s a couple of easier ways to do it! Some websites, also called staking providers, offer a service called “staking as a service”.
Staking as a service means you can stake your TRX tokens without setting up a server or node. Staking providers operate the infrastructure needed for staking TRON and receive a small portion of the TRX reward.
There’s no fee for staking on an exchange, the provider/exchange only takes a very small cut from the profit. If you’re looking to stake with a provider, there’s a few places where you can stake TRON (TRX) in a safe way.
Currently, the most trusted places to stake TRON (TRX) are OKX and Binance.
Exchanges, especially major exchanges like the ones mentioned above have an insurance policy to protect user’s funds in case of hacks or other events. Both exchanges provide an APY between 11% and 12% for staking your TRX tokens with them.
To stake TRON on OKX or Binance you only need to create an account and deposit your coins.
Staking on an exchange is the best solution if you want the process to be easy and safe.
Where to stake TRON (TRX) — A Comparison
Stake TRX at Home (Hard)
Drawbacks: Hardest. Prone to failure and losing tokens.
Benefits: Most decentralized.
Join a TRON Staking Pool (Moderate)
The biggest TRON staking pools are Ledger Live and Newpool.
Ledger has expanded into staking with a new service called Ledger Live. Based on the security provided by its famous hardware wallet, Ledger holders can put their coins to work by staking directly from their Ledger wallet. The APY for staking TRON is around 5%.
Founded in 2019, Newpool is specialized in providing staking infrastructure for TRON and EOS. As of 2022, the TRON pool has 982 accounts and 4,962,500 TRX being staked. The APY for staking TRON is around 3%.
Drawbacks: Moderate difficulty. Takes time to unlock your tokens.
Benefits: A good balance between simplicity and decentralization.
TRON Staking as a Service (Easy)
Drawbacks: Funds are delegated to an operator.
Benefits: Easiest. Instant token unlock.
TRON Staking FAQ
How can I stake TRON (TRX) tokens?
Staking TRON can be done by running a node, joining a pool, or using a staking service.
Can you stake TRON (TRX) on Coinbase?
No, staking TRON is not supported on Coinbase.
However, other exchanges such as OKX and Binance offer seamless TRX staking services.
Can you stake TRON (TRX) on Kraken?
Yes, Kraken does offer staking as a service for TRON.
If you are already using Kraken as your main exchange it’s a good idea to stake your TRON there too.
Otherwise, other exchanges such as OKX or Binance usually have a better APY and service for staking TRON.
Can you stake TRON (TRX) on Binance?
Yes, Binance does offer staking as a service for TRON.
Staking TRX on Binance is as easy as creating an account and depositing your TRON tokens.
Can you stake TRON (TRX) on Kucoin?
Yes, Binance does offer staking as a service for Kucoin.
Staking TRX on Kucoin is as easy as creating an account and depositing your TRON tokens.
Can you stake TRON (TRX) on Robinhood?
No, staking TRON is not supported on Robinhood.
However, other exchanges such as OKX and Binance offer seamless TRX staking services.
