Tokoin.io – Back in 2011, the Proof-of-Stake (PoS) was introduced through the crypto forum in solving problems of the current most popular algorithm in use. Proof-of-Stake algorithms attain consensus by demanding users to stake a number of their tokens to validate blocks of transactions and get rewarded by doing so. This activity is also known as crypto-mining.
In this mining algorithm, a miner (node) needs to put at ‘stake’ an amount of cryptocurrency to be able to verify a block. The number of blocks a single node can validate depends on the number of coins is staking. In other words, you can only validate as many transactions as the number of coins you have in your wallet.
Since the cryptocurrencies introduced as the fully automated domain, securing and verification of transactions is a fundamental factor which facilitates the functioning of the cryptocurrency system. Verifying every bit of information is mandatory to make sure that invalid blocks don’t get into the system.
Through this application of PoS consensus, it will also able to resolve issues related to costs. That is to say, within the implementation of PoS, it will eventually triggering honest miners. What they function as a validator in the system. So, later these honest validators can spend lower costs to operate the system. Whereas, precisely the attacker will incur higher costs to launch the attack.
This type of consensus is arguably safe, since it is more resistant to some threats such as the 51% attack. For example, if there is someone who has an ill intention of a blockchain project, in order to sabotage the project, they would need to firstly acquire 51% of its blockchain coins to do so.
This action would be impractical to accomplish in PoS since not only difficult to accomplish, it also too expensive to acquire 51% of the tokens. However, if the attacker is successful in that and then decides to hack the system, then they would be the one who suffers the biggest loss, since they are the majority stakeholder.
By making the mining process way simpler and less demanding, the PoS has enhanced the growing popularity of the cryptocurrencies and its usage. Moreover, this consensus has also made the process safer by reducing the threat of attacks.
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