Tokoin.io – Back in 2011, the Proof-of-Stake (PoS) was introduced in crypto forums and has since become the currently most popular and widely used problem-solving algorithm. 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’ in an amount of crypto-currency to be able to verify a block. The number of blocks a single node can validate depends on the number of coins being staked. In other words, one can only validate as many transactions as the number of coins he/she has in his/her wallet.
Since the crypto-currency was introduced as a fully-automated domain, securing and verifying transactions have become fundamental factors in the crypto-currency system. Verifying every bit of information is mandatory to make sure that invalid blocks don’t get into the system.
Using the application of PoS consensus resolves issues related to costs. Note that the implementation of PoS eventually triggers honest miners who function as validators in the system. Later on, these honest validators can spend lower costs to operate the system, whereas an 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 someone has an ill intention toward a blockchain project, he/she would first need to acquire 51% of the blockchain coins in order to sabotage the project.
That action would be impractical to accomplish in PoS since it is not only difficult to accomplish but also too expensive, given the requirement of 51% of the tokens. However, if the attacker is successful in acquiring the tokens needed and decides to hack the system, then he/she would be the one who suffers the biggest loss for being the major stakeholder.
By making the mining process way simpler and less demanding, the PoS has enhanced the growing popularity of the crypto-currency and its usage. Moreover, this consensus has made the process safer by reducing the threat of attacks.
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