Hello everyone, I'm happy to be joining the crypto academy contest for Steemit Engagement Challenge. I will be discussing my favorite Blockchain concept which is the Proof of Stake. Also, I will be explaining the importance of this concept and the ways it can be improved.
Tell us about your favorite concept or term related to blockchain, try to be explanatory and make sure to give your opinion
While Bitcoin is perceived as an overnight success, the question of scalability has been a puzzle for the past decade. Maybe not a puzzle; it's just a major disadvantage. The consensus mechanism that it operates on, proof-of-work, is to blame.
This paper does not intend to analyze the flaws of the Bitcoin blockchain. Instead, we will explore the Proof-of-stake consensus mechanism, the importance of proof of stake, alternatives to Proof of Stake, and how proof of stake can be improved. By doing so, we would also understand why other improved proteges, like Solana and Cardano, have chosen to stick with the Proof of Stake.
Understanding Proof of Stake
Proof of stake is a consensus mechanism used by blockchain networks to achieve distributed consensus, validate cryptocurrency transactions, and stake coins or set aside to be randomly selected as a validator. With this protocol, crypto owners stake their coins, which gives them the right to check new blocks of transactions and add them to the Blockchain.
This protocol is an alternative to the Proof of Work protocol, the first consensus mechanism developed for Cryptocurrencies. However, since Proof of stake has proven to be much more energy-efficient, it has gotten more popular as attention has turned to how crypto mining affects space.
Features of Proof of Stake
One of the Proofs of stake features is that as a user's value increases, the chance to maintain the ledger also increases.
This means a greater opportunity to create new blocks that can be included in the chain of blocks and time-stamped accordingly.The creator of a new block is chosen through a combination of random selection and a determination of their stake.
A type of leader election occurs within the chain of blocks.
And also, within a stake proof of stake protocol, participants accumulate the transaction fees, thereby adding to their wealth. This process encourages the steady and stable growth of the blockchain and reduces the instances of pending transactions that can prevent growth.
How Do You Earn Proof-of-Stake?
Proof of stake (PoS) is a consensus mechanism used by Cryptocurrency's protocol.
It cannot be earned, but you can secure a network and earn rewards by becoming a validator or using a cryptocurrency client participating in PoS validation.
Why do you think it is important in the blockchain?
Since the inception of cryptocurrency to date, several consensus mechanisms have been applied in the blockchain industry. These includes
- The Proof of Work
- The Proof of Stake
- The Pure Proof of Stake
Well, we have discussed the first-two consensus mentioned above and the importance of Proof of stake. We have also highlighted some disadvantages and flaws of Proof of Stake. Hence we would look at how it can be improved.
Do you think it is possible to improve this term in some way? Explain to us how
The proof of stake can be improved by adopting the Pure Proof of Stake protocol. This protocol or mechanism is used in the Algorand blockchain.
Pure Proof of stake Algorand
Algorand is the first emerging Pure Proof of Stake (PPoS) blockchain that provides flexibility, security, and decentralization - all in an eco-friendly, sustainable way.
This PPoS protocol is built on Byzantine consensus and offers a more democratic approach than its predecessor Proof of Stake (PoS).
Despite the success of the Proof-of-stake protocol in addressing scalability issues, they still can be controlled and manipulated by stakers with high amounts of tokens, which negatively impacts decentralization.
To address the most pressing issues of PoS protocols, Pure Proof of Stake (PPoS), was initiated and developed by the founder of Algorand and renowned cryptographer Silvio Micali. This was done to propose a more egalitarian concept and avoid the “rich get richer” scheme noticed in most PoS networks
The protocol is very swift and requires minimal computational power per node, for efficient transactions.
Each token holder's influence on the choice of a new block depends on its stake in the system. Users are randomly and secretly selected to vote and propose blocks irrespective of their stake.
Algorand’s PPoS method tethers the security of the whole economy to the honesty of the majority of the economy, rather than to that of a small subset of the economy. The goal of Micali was to solve the Blockchain Trilemma and develop a blockchain system that can be flexible enough to meet the demands of today’s world.
Conclusion
In this study, I have discussed proof of stake as my favorite blockchain concept. The proof of stake is one of the important consensus mechanism adopted by so many blockchains which we have discussed some of them in this post. Also, i have stated the alternatives to the proof of stake. Hopefully, the proof of stake can be improved to make a blockchain a better network.
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