While staking can be an excellent way to build up a crypto portfolio, it is not without risks. As discussed briefly in this article, the primary staking risks are fiat value, lock-up or vesting periods, and counterparty risk with either the pool operator, the project team, or the chain itself. What is staking in cryptocurrency Robert has reported for a variety of international publications including the Associated Press, The Guardian, Vice, and Decrypt. Current areas of interest include the political economy of technology, cryptocurrencies, and privacy. Robert has a Bachelor of Science from UCL, and a Master's degree from the University of Oxford's Internet Institute.

Validator keys are the key pair associated with each validator that’s established, and are used to verify validators and associated blocks on the Ethereum chain. Validator keys consist of one public key and one private key, and are each represented as a separate string of random characters. The validator public key is used by the network to identify the validator and deal with reward collection, and is attached to the transaction data when ETH is deposited for the staking deposit contract. The validator private key is used to sign any on-chain actions as a validator, like block proposals and attestations. What Is Staking? The earliest consensus mechanisms predate cryptocurrency and were (and still are) used to synchronize data between a number of computers all under the common control of one person or corporation. In those early consensus mechanisms every computer connected to the network must be identified and set up with credentials that will allow it to prove to the other computers in the network that it is authorized to participate in the consensus mechanism, rather than being some rouge unidentified computer attempting to corrupt the consensus by injecting bogus or malevolent data (called a “sybil attack” by computer scientists).