What does cryptocurrency pledge mean? What is the difference between pledge and mining?

Dec 17,2022
What does cryptocurrency pledge mean? What is the difference between pledge and mining?

What is cryptocurrency pledge? Cryptocurrency pledge is a good way to earn passive income, reward and high interest rate and participate in cryptocurrency. The protocols it uses are considered by many to be the future of cryptocurrencies. So, what's the difference between cryptocurrency pledge and crypto mining? Please look down.

1、 What is encryption pledge?

Encrypted mortgage occurs when users "mortgage" or lock their encrypted assets for rewards. Pledge requires users to submit their assets to the blockchain to verify cryptocurrency transactions and ensure the integrity of the blockchain. It is applicable to the cryptocurrency used to verify transactions using the Proof of Equity (PoS) consensus mechanism. The PoS protocol is an alternative to Proof of Workload (PoW). PoS relies on users in the system to verify transactions, while PoW relies on external miners, who compete for the right to verify transactions through their computing power, in order to obtain the reward of their efforts. As specific networks provide high interest rates for various cryptocurrency pledges, pledge has become a popular method for users to generate passive income.

The pledge uses the PoS consensus mechanism, which is a method used by the blockchain to identify and hire reliable users (called "verifiers") to verify and verify the legitimacy of new blocks. The verifier rewards their efforts by receiving the native cryptocurrency of any blockchain - the more the verifier mortgages, the greater the opportunity for them to obtain mortgage rewards.

There are many kinds of cryptocurrency pledges, all of which have their own trade-offs. But the overall idea is that users are encouraged to act in the best interests of the blockchain because they lock up funds. If they act maliciously, these funds will be destroyed. If you want to mortgage a cryptocurrency, you must first ensure that the digital currency you choose is connected to the blockchain using the PoS consensus mechanism. The following are some of the best cryptocurrencies, ranging from the highest market value to the lowest market value:

Ethereum 2.0 (ETH2)




Avalanche (AVAX)


2、 What is the difference between pledge and mining?

Before discussing the difference between crypto mortgage and crypto mining, we must understand their similarities. Pledge and mining are examples of consensus mechanisms. However, PoW consensus mechanism is used for mining, while PoS is used for pledge.

Mining involves advanced hardware and technical knowledge to mine new blocks. The first miner to generate a new block will be rewarded in the form of blockchain native cryptocurrency. The workload proved that a lot of power was used, because all miners everywhere had to run their computers to try to be selected for verification, because all the work of unsuccessful miners was wasted.

However, pledge is a more energy-saving method. Its PoS consensus mechanism does not employ miners who use advanced hardware to solve complex problems, but requires the verifier to pledge tokens in exchange for rewards. PoS also improves the security and reliability of the blockchain, and improves the processing speed with lower transaction costs.

In addition, pledge consumes much less energy than mining. Ethereum 2.0 blockchain is the successor of Ethereum's current blockchain and is transitioning to the PoS model. It is estimated that this model uses about 99.95% less energy than its predecessor.


Cryptocurrency pledge is to lend cryptocurrency and use it as collateral for proof of equity (PoS) blockchain to achieve various results, such as extending loans, verifying online transactions, earning interest or obtaining new cryptocurrency (revenue agriculture) as a reward. This innovative but risky method most often used by Ethereum and its Decentralized Finance (DeFi) protocol is essentially to obtain passive income, just like the interest generated by traditional financial investment, which helps to open up new markets for cryptocurrencies and finance new projects.