Validator
Also known as: staking validator, node operator
A participant in a proof-of-stake network that proposes and confirms blocks, earning rewards that are typically taxable as income on receipt.
Definition
A validator on a proof-of-stake blockchain locks up (stakes) crypto to help confirm transactions and produce blocks, earning rewards in return. Running a validator can require significant stake and uptime. The rewards earned are generally taxed as revenue income at their rand value when received, and that value becomes the base cost for any later disposal.
Example
You run an Ethereum validator and receive staking rewards. Each reward is income at its rand value on receipt and sets the base cost going forward.
Jurisdiction notes
- South Africa: Validator rewards are generally revenue income at rand value on receipt, which then becomes the base cost for later disposal.