?? Why Stake ??

Staking is to Cardano as 'Society' is to Humans

The whole 'special sauce' of having a blockchain based tehnology is to avoid having 'all your eggs in one basket'. 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 has a complete record of where 'all of the coins in existence' are located at any given time. Which accounts sent coins and which ones received. It's pretty basic actually. Each 'new block in the blockchain' is actually an encrypted record of the transactions that have taken place since the previous block was added to the chain.

By now (2025), pretty well all humans that have any sort of digital life have heard of Bitcoin. It's the 'untangible' 'not an asset' 'crazy new thing' that has risen in value from that of a pencil to that of a house, and all in a matter of a decade.

Most people might know some of the above, but the true workings of how a blockchain exists and grows are a mystery. Well .. let me pass on the knowledge I've found so far ...

If Blockchains are to expand their usefulness beyond the 'shiny new thing' phase, then the structure of those blockchains also needs to expand. Bitcoin was the first kid on the palyground and has become the 'defacto cryptocurrency' that everyone has heard of. That doesn't mean it's the best design, or the most efficient .. the truth is far from it.

In order for technologies to improve, the best way is to learn from everything that came before, and build that knowledge into the way you operate and plan for the future ... Cardano does just that.

The old way: The Bitcoin way: Proof of Work

In the world of BTC, in order for 'the next block to be produced', a process called 'Proof of Work' is used to ensure the authenticy of each succesive link in the blockchain. The transactions that happen since the previous block was created form the contents of each block, and get recorded by all of the nodes of the network. When the next 'chime of the mining clock' happens, it's time for the network to finalize those transactions into the official record, which will get added to the blockchain.

The trouble with 'Proof of Work' is that in order account for the advance of computer speeds over the years, and in order to ensure that 'there isn't unlimited money in the future', Bitcoin's network was designed to gradually make it exponentially harder for each block to qualify as 'the authentic record'.

In Proof of Work, the next block only qualifies if it meets a set of criteria that is specified by the blockchain's programming.

When it comes to encrypting data, computers have become very good at this math, which is all it takes to encrypt (and shrink)data. Encryption requires 'the-data-to-be-squished' and a 'random key' that is used in an equation that turns the 'source material' into a resulting code that can ony be read if you have the right 'decryption key'.

The trick to getting the 'lucky guess' is truly guessing a lottery number combination. The main trouble with Proof of Work, is that every few years, instead of having to successfully guess 4 out of 10 numbers, the game changes and you need to correctly guess 6 out of 49, then 7/50, then 8/51 and so on.

The current state of affairs is that the Bitcoin network, due to the value of the coins and the difficulty associated with 'guessing the right lottery number to create the next block in the chain', is estimated to be burning between 91-145 Terawatt-hours (TWh) every year. This is the same amount of electricity as:

The entire consumption of any of these 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 than any other financial project in human history

There has to be a better way: Proof of Stake

Proof of stake, on the other hand, is a much more elegant and simple method of deciding who 'the lucky one' will be to encrypt the blockchain's history for each chunk of time. It goes like this:

We know how many 'coins' there are in the network.

Each of those coins gets 'a vote' that can be used to nominate a stake pool to participate in the blockchain's record keeping

Periodically, the blockchain itself decides which stake-pool gets to create a block. To make that decision, the blockchain relies on the number of 'votes' that each stake pool has been given by the number of coins (in effect, by the account holder). The more votes a stake pool receives, the more likely it is to create a block.

Stake pools that participate in record-keeping get rewarded by receiving the transaction fees of the activity that occurs during the block each pool is entrusted to record.

To avoid 'all the eggs being put into just a few baskets', the blockchain's programming determines a maximum number of 'votes' that a pool can use to participate in the record keeping. When that is reached, the pool is considered 'saturated'. If more votes are then allocated to that pool, it becomes 'oversaturated'. The pool still participates in the network, but there will not be a corresponding increase in rewards, above the saturated level.

Each of the votes that are held by each coin, will also receive transaction-fees from the stake-pool that they voted for. This means that if an account has staked to an 'oversaturated pool' their rewards will reduce. This should encourage the account holder to direct their votes to a pool that is not yet saturated, meaning that they will in turn support more stake pools to be included in the network.

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 down', nobody would be able to prove that they had any purchasing power with their VISA or MasterCard. In this case, having 'the master ledger of who owns what' copied across many network nodes 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 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. If enough people were to ask for their money back, the bank would not be able to continue financing their investments. Problems would occur.

In the case of Cardano, this blockchain has implemented 'non-custodial staking'. This means that your funds can vote any way you choose, and while doing so, those coins 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.

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 pols. That in turn gets the exchange as much as 4% per year, which could be coming directly to your wallet.

By choosing new stake pools by 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 us :)

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