?? Why Stake ??

Staking is to Cardano as 'Society' is to Humans

The whole point of a blockchain based tehnology is to avoid keeping 'all of our eggs in one basket'.

What we have done in the past with a database that may have backups, but would primarily exist on one computer, Blockchain can improve upon by having databases duplicated over many distributed locations, all networked in such a way that they can self manage to agree about the correct official contents.

In the context of Cryptocurrencies, the idea that 'everyone knows where all the coins are' is the current use of that technology. Each network node maintains a complete record of 'all of the coins in existence', including where they are located at any given time.

Transactions records are archived, preserving details of which accounts sent and received funds over time.

Blockchains are made up of 'Blocks'

Each 'new block' is an encrypted record of the transactions that have taken place during a window of time.

Current state of affairs

By now (2025), most of us who have any sort of digital life have heard of Bitcoin. It's the original 'untangible' 'not an asset' 'crazy new thing' that has risen in value from a few grains of rice to that of a gold bar .. all of this has taken place since the inception of cryptocurrencies in 2011.

Each Bitcoin is the 'reward token' of the Bitcoin network. Those rewards have been handed out to 'Mining Operators' who have been running the computers on the Bitcoin network since it began.

Blockchains typically use 2 distinct designs to maintain the network's integrity, and thereby preserving the authenticity of the records contained in each block.

Proof of Work (POW)
Proof of Stake (POS)

A little bit of math ... (don't worry, it's easy math)

If you multiply 2 numbers together, you get a result.

(3) X (5) = (15)

When you want to 'undo that math puzzle', you can begin with the answer, and work backwards using the opposite math process to find the original numbers.

(15) / (3) = (5)

Still keeping things simple, the same mechanisms are true for encryption.

(StuffYouStartedWith) X (encryptionKey) = (EncryptedResult)

(EncryptedResult) / (encryptionKey) = (StuffYouStartedWith)

Proof of Work: The old way: The Bitcoin way ...

In the POW scheme, the authenticy of each succesive block in the blockchain is guaranteed if the 'EncryptedResult' of each block successfully meets a number of increasingly complex mathematical goals.

When a block is finally encrypted in such a way that this ever-increasing complexity is satisfied, that successful 'minting' is the very proof that 'Complex work has been done', so it then qualifies as the next successful block in the blockchain.

One problem with 'Proof of Work' is that in order to account for the advance of computer speeds over the years, Bitcoin's network was designed to progressively make it exponentially harder for each block to successfully qualify as 'the official record'.

When it comes to encrypting data, computers have become very good at this math, which is all it takes to encrypt (and shrink) the records that fill each block.

One way to think of the difficulty in successfully guessing the 'lucky combination' is very similar to guessing the winning lottery number combination for a lottery that keeps adding getting harder.

This means that just to keep Bitcoin running, requires literally tens of thousands of computers to be computing AT FULL POWER, 24/7, FOREVER, in the hopes that one of them can successfully guess the correct lottery numbers.

This all means that Bitcoin is estimated to be burning between 91-145 Terawatt-hours (TWh) every year. That amounts to the same amount of power as:

The entire consumption of many countries: Sweden, Norway, Bangladesh, Kazakhstan, Netherlands, Ukraine, Philippines, Colombia, Finland, Belgium, Austria, Switzerlan, Peru, Singapore, Qatar, Romaina, Greece, Oman, Morocco, New Zealand, Denmark ...
As much as 2.3% of the electricity used by the USA
As much as 25% of the electricity used by the Canada
Much more power and cost vs any other financial project in human history

!!! --- ... there MUST be a better way ... --- !!!

Proof of Stake:

Proof of stake is a much improved and efficient method of doing what blockchains do best.

There are variations in each implementations of the Proof of Stake concept, but I'll be discussing Cardano.

Blocks exist in a similar way, in that they're encrypted records covering a period of time

Stake pools exist in place of 'mining rigs' to produce blocks and register new transactions into the rest of the blockchain for inclusion into each block.

The big difference with Cardano comes with the method of deciding how stake pools become 'the lucky Block Producer'.

The blockchain knows how many 'coins' or tokens are staked on the network. In the context of Cardano, those are ADA coins.

Each of those coins is allocated 'a vote' that can be used to nominate a stake pool to carry out the day-to-day operations of the network, thereby participating in the blockchain's record keeping process.

The operations of the network are paid for in ADA. Rewards get distributed to Stake Pools and Account Owners that have staked their ADA to a Stake Pool.

The Cardano blockchain operates on a 5 day repeating cycle. For each of those cycles (called Epochs), the blockchain algorithm decides which stake-pools qualify to create a block. To make that decision, the blockchain relies on the number of 'votes' that each stake pool has received from ADA owners.

The more votes a stake pool has at the beginning of each Epoch, the more likely they will be for to be elected to produce a block.

In exchange for ADA owners staking their votes to a pool, those accounts will receive a proportional amount of the rewards that their pool generates when producing blocks.

Reward funds come from 2 sources:

transaction fees from the activity that occurs during the block's time segment
a 'treasury reserve' of network tokens

One of Cardano's significant goals is decentralization. This means avoiding having 'all your eggs in one basket', and instead encouraging the network to have a higher number of pools making up the network.

As of 2025-10-10

The target number of Cardano Stake Pools is 2160.
The amount of ADA staked to pools on the Cardano Network is 21.72 Billion.
21.72B / 2160 = 10055555 ADA
That means a 'fully saturated stake pool' would have a stake of just over 10m ADA

To incentivize wallet owners to spread their stake votes around and assist with decentralization, the amount of rewards that any single pool can earn during each Epoch is capped.

As the amount of 'delegated stake' to a pool surpasses the 10m mark, the pool would still participate in producing blocks, but no corresponding increase of rewards beyond the limit will occur.

ADA wallet owners can easily see how much ADA is staked to their chosen pool, and can see the corresponding rewards in their account. If the wallet owner notices those rewards falling off, they would be wise to find another 'non-saturated' stake pool to delegate to, in order to maximize their earnings from staking.

When there are more stake pools available on the network, the robustness of the network is increased. Imagine a typical day of everyone you know doing their online shopping or even going to the store to purchase groceries or put gas in their car. If the VISA or MasterCard networks were to 'go offline', nobody would be able to prove that they had any purchasing power with their accounts. In this case, having access to many copies of the official record of finance would allow for things to carry on without any inconvenience to the user.

This is decentralization at work.

Cardano in particular has also invented another great feature right from the beginning ... Non-Custodial Staking.

For some context, if you were to open a savings account with your local bank, in effect you vote for that bank to have the ability to invest your money. Typically banks invest in other people's projects, business loans, mortgages etc. The bank uses your money, and in exchange, you earn interest.

To facilitate this, you actually have to give your funds to the bank, and trust them to 'do the right thing' with your money.

If you need to get your funds back at any point, it may take some time for the bank to find those funds and get them to you, you may even have to pay penalties for an early withdrawal from a savings account or term deposit. If enough people were to ask for their money back, the bank would not be able to continue financing their investments. Problems could occur.

In the case of Cardano, 'non-custodial staking' has been implemented. This means that your funds can vote any way you choose. While doing so, those funds stay in your wallet and are 100% accessible to you at all times. If you decide to use some to buy groceries, your funds are available.

Now ... these days, not many people are paying for their groceries or buying a car with cryptocurrency, but if you've been reading the news, you'll have heard that numerous nations are starting to allow payments in bitcoin and other cryptocurrencies. The USA is in the process of establishing a 'strategic crypto reserve', as are many large companies, investors and financiers. Also, as I write this page, I see a notice that Abu Dhabi's airport will soon accept payment in some cryptocurrencies.

So what's the point?

If you have your ADA coins sitting in a wallet on an exchange, the exchange is using your coins to vote for it's own stake pools, and earn the rewards for themselves. That in turn gets the exchange as much as 4% per year, which could otherwise be coming directly to your personal off-exchange wallet.

By choosing new stake pools when Staking your ADA, you are helping the overall Cardano blockchain and all of its' upcoming projects. Only Cardano has this combination of decentralization and growth. Without recommending any specific project, I will provide a few links outlining the up-and-coming projects that Cardano is supporting.

Please stake with our pool: WINTR

I've set the fees and commission to as low as I can, as I'd like to welcome as many new Stakers as possible. If you (and any friends you have) could stake a few ADA to our pool, my family and I would really appreciate it, THANKS !!

The process ... If you have your ADA in any of the usual 'non-exchange' wallets, you should be able to find us with the ticker: WINTR. I've staked wallets to WINTR using Yoroi and Lace .. both were able to find WINTR easily.

Here are a couple of links to find WINTR on some of the Cardano Explorers. If in doubt, you can always find us through your wallet's staking section using the ticker: WINTR

WINTR on Cardanoscan
WINTR on Cexplorer