Tezos: Baking(XTZ) Bad?
blockchain

Tezos: Baking(XTZ) Bad?

By tomoyan | tomoyan | 11 Feb 2020


I have been staking Tezos (XTZ) for a few months and I have had positive experiences from staking.

Tezos (XTZ) has made some strong gains and price is almost $3 now.

So I have been thinking about "Baking" Tezos (XTZ) instead of "Staking".

If you can bake Tezos (XTZ), you get to keep all the rewards to yourself so why do I need to stake right?

What is Baking?

Baking Tezos (XTZ) is like mining bitcoin.

Baking validates all the XTZ transactions, and bakers get rewarded by securing the network.

Unlike bitcoin mining, baking doesn't require a lot of energy or expensive hardware with powerful processor.

To become a baker, you just need a decent computer, reliable network connection and a roll (8000 XTZ).

And if you run a baker successfully and people will delegate Tezos to you, and you will have greater change to earn  more rewards... sounds like a great idea!

Running a baker on your own also requires special knowledge + setting up a Tezos node + maintaining the node + available all the time.

Is it still worth baking?

I found this reward calculator.

stakingrewards.com/calculator

Baking 8000 XTZ: $1489

baking

Staking 8000 XTZ: $1340

staking

Sure, baking reward is better than staking but not that much...

If this is true, I am not that interested... and running a Tezos node isn't free so staking would be a lot easier, less work and more profitable?

If a baker gets more delegations from other people, the rewards would increase a lot more?

This doesn't make sense to me.

What am I missing?

When delegating you will not:

Receive the rewards directly. The baker you are delegating to is responsible for sending you your rewards …minus their fees!

Be safe against over delegation. Bakers cannot refuse delegators. Be careful not to delegate to an already over-delegated baker.

 

I am still not convinced that these are good enough reasons to become a baker, but I am still kind of interested... a little bit.

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tomoyan
tomoyan

Crypto DIYer - tomoyan.github.io


tomoyan
tomoyan

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