The Evolution Of Proof Of Stake Consensus Mechanism

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INTRODUCTION

A consensus mechanism can basically be defined as a protocol created into the blockchain technology because of its decentralized nature, the consensus mechanism allows for there to be agreement on a particular data between the distributed nodes of the network hence, allowing the network to be operate without the need for a central authority.

Consensus mechanisms were basically created therefore to make sure that the security and integrity of the network and its data is ensured, the proof of stake consensus mechanism is a type of consensus mechanism created so as to succeed where the proof of work consensus mechanism failed, addressing the issue of unsustainable energy consumption and its effects on the environment.

In this post of mine I will be explaining and discussing some of the stages and significant steps in which the proof of stake consensus mechanism has taken so as to grow and evolve to the state or point to which it is now.

• INTRODUCTION OF THE PROOF OF STAKE

Owing to the concerns of the amount of energy consumed by the proof of work consensus mechanism, and the effects it is having on the environment, an alternative consensus mechanism which is the proof of stake consensus mechanism was then suggested and first introduced in the year 2011.

After the introduction of the proof of stake consensus mechanism, it was everything that it developers promised it would be, it was everything the peoof of work consensus mechanism was not, unlike the proof of work consensus mechanism, it was sustainable and energy efficient.

After being introduced in the year 2011, it wasn't until 2012 before the proof of stake consensus mechanism was first launched or implemented after this launch and implementation it became clear without any doubt that new blocks can be created and secured by staking instead of mining.

• INTRODUCTION OF THE DELEGATED PROOF OF STAKE

Just like the proof of work consensus, after some time there were certain concerns of the proof of stake consensus mechanism, some failures or lapses and in attempting to address these failures basically the centralization of the network, the delegated proof of stake consensus mechanism was introduced.

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So, three years after the proof of stake was introduced and two years after it was launched, the developer known as Daniel Larimer introduced the delegated proof of stake consensus mechanism that is, in the year 2014 and then launched this consensus mechanism for the first time on platform known as "Bitshares".

The delegated proof of stake consensus mechanism operates in such a way whereby, users or investors who stake in the network, basically stakeholders, choose by voting a small group of people known as "delegatees" whose duty is typically to validate transactions and create new blocks in the network or chain.

• CREATING THE HYBRID OF PROOF OF STAKE AND PROOF OF WORK.

Although the issue of the proof of work consensus mechanism consuming enormous amount of energy and negatively impacting the environment was a deal breaker however, the consensus mechanism still had other useful and protocols so developers decided merge these features and protocols into the proof of stake hence, creating a hybrid consensus mechanism.

Therefore, by merging the proof of work consensus with the proof of stake consensus mechanism developers were able take advantage of the doubled features and everything to facilitate the fortifications of the security protocols and the fundamental nature of the blockchain which is decentralization.

Additionally, there is an instance in the 2016 where the hybrid consensus mechanism was launched and implemented into the Decred blockchain, it operates by the proof of work consensus people or miners creates the block while stakeholders validate them.

• INTRODUCTION OF STAKING POOLS AND LIQUIDITY STAKING

Another challenge which the proof of stake consensus mechanism faced which could not be solved by delegated proof of stake or hybrid consensus mechanism was basically the lack of liquidity in the blockchain network and to address this issue staking and liquidity pools were introduced.

How staking pools address the issue of liquidity is by basically providing a way or means that allows users and incentivize them to not liquidate but rather to combine their resources together with other stakeholders and as a result of doing so gaining a fair chance of becoming a network validator and enjoying all the rewards and perks that comes with it.

Liquidity staking is another means of addressing the issue of liquidity by basically eliminating the need of liquidating assets, it does this by allowing stakeholders to trade and carry out transactions with their staked assets by using issued tokens that represents the value or amount of your staked assets.

CONCLUSION

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I would like to say a very big thank to everyone who made the time and the effort to read and go through this post which I have made, and I hope that you have been able to learn something new as I have explained and discussed the significant steps in which the proof of stake consensus has taken to evolve and grow in the world of consensus mechanism and cryptographic techniques.

Some of these significant steps that the proof of stake consensus mechanism has taken as mandated by evolution include; the delegated proof of stake consensus, the hybrid consensus mechanism and using liquidity and staking pools