Currently there are two type of mechanism that used by cryptocurrency projects to verify there transaction one is (PoW) Proof Of Work and the second is (PoS) Proof Of Stake. I already explained Proof of Work in detail that you should check out.
Now time to understand What is Proof of Stake?
Once you read this article carefully there is no need to go anywhere else to know about proof of stake. I will help you here to understand everything about proof of stake with examples to make it more easy for you.
What Is Proof Of Stake?
Proof-of-stake is a type of consensus mechanism used by blockchain networks to achieve distributed consensus. Proof of stake is a cryptocurrency consensus mechanism for validation transaction and adding new blocks to the blockchain. Consensus mechanism is a method for validating entries into a distributed database and keeping the database secure. In the case of cryptocurrency, the database is called a blockchain.
Proof of stake algorithm is the alternative method of Proof of work algorithm I also share details guide about Proof Of Work and How does it work? Proof of stake consensus mechanism is the newly introduced mechanism in crypto projects and now Ethereum is also now moving to proof of stake system from proof of work.
How Proof Of Stake Works?
Proof of stake is introduced as a better alternative of proof of work algorithm which uses less computing power to validate transactions on blockchain. Proof of stake is changes the way of validating transactions on blockchain in POS instead of setting up big mining farm you just need to store some crypto coins to participate in the network to validate the transactions.
Unless proof of work where your need to setup mining rigs and ASIC machine to mine cryptocurrency. Here terms are changed like crypto mine called as validator in proof of stake. Validators are then selected randomly to “mine,” or validate the block. This system randomizes who gets to “mine” rather than using a competition-based mechanism like proof-of-work.
Now let’s see how does proof of stake works? in simple and easy language.
In proof of stake you need to stake your cryptocurrency into staking pools to validate transactions. For instance Ethereum will require minimum 32 ETH to become a validator on Ethereum network. Blocks are validated by more than one validator, and when a specific number of the validators verify that the block is accurate, it is finalized and closed.
Different proof of stake mechanism use different methods for validating blocks. it will use shards for transaction submissions. A validator will verify the transactions and add them to a shard block, which requires at least 128 validators to attest to. Once shards are validated and block created, two-thirds of the validators must agree that the transaction is valid, then the block is closed.
Why We Need Proof Of Stake?
In the guide of Proof of work we see that the major problem with Pow is it uses a lot of energy and it’s really bad for environment. To solve that problem proof of stake is the best option it don’t need use energy like pow there is now need of setting up big mining machine which need a lot of electricity to run and validate the transactions.
The PoS mechanism seeks to solve these problems by effectively substituting staking for computational power, whereby an individual’s mining ability is randomized by the network. This means there should be a drastic reduction in energy consumption since miners can no longer rely on massive farms of single-purpose hardware to gain an advantage.
Is Proof Of Stake Secure?
Proof of stake is a more efficient alternative because it uses less computing power and enables faster transaction speeds. It also makes the blockchain theoretically more secure against “51% attack” – a form of cyberattack where attackers control over half the network.
FAQ – Proof Of Stake
Here are some most asked question on the internet about Proof Of Stake. If you have any question that you think I need to add here just share that in the comment section I will answer that and add that question here so everyone know about that.
What Is Proof-of-Stake vs. Proof-of-Work?
In proof of work consume too much energy to add a single block to the network on the other hand proof of stake is power efficient. Also proof of stake choose uses randomly selected miners to validate transactions. Proof of Work (POW) uses a competitive validation method to confirm transactions and add new blocks to the blockchain.
Is Proof-of-Stake a Certificate?
Proof-of-stake is a consensus mechanism where cryptocurrency validators share the task of validating transactions. There are currently no certificates issued.
Can Bitcoin Be Converted to Proof-of-Stake?
It’s possible that bitcoin moves to proof of stake from proof of work. Ethereum is already started moving to proof of stake from proof of work. But this process can take years to implement in an already established cryptocurrency.
Conclusion – Proof Of Stake
So now you know everything about Proof Of Stake. I tried to explain it as simple as possible but if you still have any question just put them in the comment section I will answer all of them also share this article on social media to aware everyone about cryptocurrency.