#CryptoBytes
So you’ve heard about Proof-of-Work (PoW) 🔨 being used in #Bitcoin and #Ethereum, what about Proof-of-Stake (PoS) 💰? Read on!
If you’re unfamiliar with PoW, read our previous thread here:
🧵👇
So you’ve heard about Proof-of-Work (PoW) 🔨 being used in #Bitcoin and #Ethereum, what about Proof-of-Stake (PoS) 💰? Read on!
If you’re unfamiliar with PoW, read our previous thread here:
https://twitter.com/TreehouseFi/status/1499714974792314886
🧵👇
Proof-of-Work and Proof-of-Stake are both consensus mechanisms or algorithms that ensure the security of the #blockchain. 🔒
In simple terms, they are used to select which participants/nodes should be given the chance and authority to add a block to the chain.
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In simple terms, they are used to select which participants/nodes should be given the chance and authority to add a block to the chain.
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This ensures security because it helps to filter participants who may not be genuine or committed to the #network.
In both mechanisms, chosen participants have to contribute a certain resource such as money or energy. This prevents bad actors from overtaking the network. 😇
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In both mechanisms, chosen participants have to contribute a certain resource such as money or energy. This prevents bad actors from overtaking the network. 😇
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In PoS, instead of miners, we have #validators! ✅
Unlike miners competing to solve the hash function in PoW, validators are chosen “randomly” to add blocks. Some factors such as how much #cryptocurrency they are holding can increase their chances of being chosen.
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Unlike miners competing to solve the hash function in PoW, validators are chosen “randomly” to add blocks. Some factors such as how much #cryptocurrency they are holding can increase their chances of being chosen.
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Just as miners expend energy in PoW, validators need to spend money on #tokens.
Since this will cause them to have a significant stake in the #network, they'll have vested interest in its progress and success. This, yet again, reduces the chances of bad actors. Why is that?
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Since this will cause them to have a significant stake in the #network, they'll have vested interest in its progress and success. This, yet again, reduces the chances of bad actors. Why is that?
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If any attackers want to take control of the #network, they will need to hold at least 51% of the #cryptocurrency and control at least 51% of the network’s nodes.
What are some significant pros and cons of PoS compared to PoW? 🤔
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What are some significant pros and cons of PoS compared to PoW? 🤔
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PoS is more environmentally friendly ♻️ than PoW because unlike #mining, not much energy needs to be expended.
However, PoS security is "less robust" since participants can “pay” to be given the chance to add a block to the chain, rather than needing extensive hardware.
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However, PoS security is "less robust" since participants can “pay” to be given the chance to add a block to the chain, rather than needing extensive hardware.
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PoW requires constant ongoing expenditure of resources in the mining process. Conversely, PoS only mainly requires an upfront cost from the participants.
PoS, however, solves the problems of inefficiency and scalability that PoW faces.
Which networks make use of PoS? 🤔
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PoS, however, solves the problems of inefficiency and scalability that PoW faces.
Which networks make use of PoS? 🤔
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Some examples of #blockchains using the PoS mechanism are @Polkadot, @EOSIO, @Cardano.
Did you know @ethereum, which was originally built on a PoW system, is currently working towards transitioning to PoS in #Ethereum 2.0? 🚀
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Did you know @ethereum, which was originally built on a PoW system, is currently working towards transitioning to PoS in #Ethereum 2.0? 🚀
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Which are your favorite PoS #blockchains? Did we cover the basics of the PoS mechanism?
🌳More about Treehouse here treehouse.finance
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🌳More about Treehouse here treehouse.finance
🌳Discord
bit.ly/TreehouseDC
🌳Telegram t.me/treehousefi
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