•5 years
What is proof-of-stake?
Many times, while reading various blogs or forums, I heard the following wording: proof-of-stake. Could someone explain to me exactly what this means?
Many times, while reading various blogs or forums, I heard the following wording: proof-of-stake. Could someone explain to me exactly what this means?
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Proof of Stake can be translated as proof of stake. This is the second method of confirming transactions in the blockchain. This is a slightly younger solution than PoW. One of the main factors affecting the choice of the creator of a new block is the amount of funds or units of a given cryptocurrency that he has in his wallet. Hence the name stake. The more pieces a potential miner has, the more mining power he has. The blockchain algorithm chooses the miners it will reward for solving the mathematical problem.
The biggest incentive to use the Proof of Stake model is the fact that you do not have to invest in expensive mining equipment, pay for energy costs and replace worn machines with new ones. It is enough to buy the right amount of coins of a given cryptocurrency and then keep them frozen in a special wallet. Such a freeze means that they cannot be sold.
Another big advantage is the shorter waiting time for transaction confirmation, and the transaction fees for users are lower than in the case of PoW.
On the other hand, the disadvantage is that the richest wallets can take control of the network, which threatens the idea of decentralization, and the profits for miners are lower. For this reason, miners of the second largest Ethereum network are rebelling against the announced transition from PoW to PoS.
The biggest incentive to use the Proof of Stake model is the fact that you do not have to invest in expensive mining equipment, pay for energy costs and replace worn machines with new ones. It is enough to buy the right amount of coins of a given cryptocurrency and then keep them frozen in a special wallet. Such a freeze means that they cannot be sold.
Another big advantage is the shorter waiting time for transaction confirmation, and the transaction fees for users are lower than in the case of PoW.
On the other hand, the disadvantage is that the richest wallets can take control of the network, which threatens the idea of decentralization, and the profits for miners are lower. For this reason, miners of the second largest Ethereum network are rebelling against the announced transition from PoW to PoS.
Proof of Stake can be translated as proof of stake. This is the second method of confirming transactions in the blockchain. This is a slightly younger solution than PoW. One of the main factors affecting the choice of the creator of a new block is the amount of funds or units of a given cryptocurrency that he has in his wallet. Hence the name stake. The more pieces a potential miner has, the more mining power he has. The blockchain algorithm chooses the miners it will reward for solving the mathematical problem.
The biggest incentive to use the Proof of Stake model is the fact that you do not have to invest in expensive mining equipment, pay for energy costs and replace worn machines with new ones. It is enough to buy the right amount of coins of a given cryptocurrency and then keep them frozen in a special wallet. Such a freeze means that they cannot be sold.
Another big advantage is the shorter waiting time for transaction confirmation, and the transaction fees for users are lower than in the case of PoW.
On the other hand, the disadvantage is that the richest wallets can take control of the network, which threatens the idea of decentralization, and the profits for miners are lower. For this reason, miners of the second largest Ethereum network are rebelling against the announced transition from PoW to PoS.
The biggest incentive to use the Proof of Stake model is the fact that you do not have to invest in expensive mining equipment, pay for energy costs and replace worn machines with new ones. It is enough to buy the right amount of coins of a given cryptocurrency and then keep them frozen in a special wallet. Such a freeze means that they cannot be sold.
Another big advantage is the shorter waiting time for transaction confirmation, and the transaction fees for users are lower than in the case of PoW.
On the other hand, the disadvantage is that the richest wallets can take control of the network, which threatens the idea of decentralization, and the profits for miners are lower. For this reason, miners of the second largest Ethereum network are rebelling against the announced transition from PoW to PoS.
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Proof-of-stake (PoS) is a consensus mechanism in which network participants are chosen to create new blocks based on the amount of cryptocurrency they hold, rather than computational power, as is the case with proof-of-work. The more cryptocurrency a participant holds, the greater their chances of generating a new block and receiving a reward. Because of this, PoS is more environmentally friendly, as it does not require as much energy consumption as PoW.
Proof-of-stake (PoS) is a consensus mechanism in which network participants are chosen to create new blocks based on the amount of cryptocurrency they hold, rather than computational power, as is the case with proof-of-work. The more cryptocurrency a participant holds, the greater their chances of generating a new block and receiving a reward. Because of this, PoS is more environmentally friendly, as it does not require as much energy consumption as PoW.
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