Laisha Wadhwa | OpenToWork Profile picture
Aug 12, 2022 13 tweets 4 min read Read on X
Gm Gm buidlers and web3 enthu cutlets!

Its Day 16 of #web3glossary 🚀

P: PoW | PoS Image
In such a dynamically changing status of the blockchain, we need an efficient,fair, real-time & secure mechanism to ensure that all the txns on the network are genuine and all participants agree on a consensus on the status of the ledger

Consensus mechanism does that job for us
It’s a set of rules that decides on the legitimacy of contributions made by the various participants of the blockchain.

There are 2 kinds of consensus mechanisms
PoW: Proof of Work
PoS: Proof of Stake
PoW requires a participant node to prove that the work done and submitted by them, qualifies them to receive the right to add new transactions to the blockchain. It ensures the integrity of new data as it requires members of network to expend effort in solving an arbitrary..
..mathematical puzzle to prevent anybody from gaming the system.
@Bitcoin and @litecoin use PoW

However, this computation leads to high energy consumption and a longer processing time.🧐

But, where there’s a problem, there’s a solution💯
PoS evolved as a low-cost & low-energy consuming alternative to the PoW model
It delegates control of the network to owners of the token
It allocates responsibility of maintaining the public ledger to participant node in proportion to the no of virtual currency tokens held by it
Let’s scratch the surface🧐
In the PoS model, stakers (same as miners in PoW) lock up funds in a special smart contract. Every time a new block is needed by the network, an algorithm grants a specific staker the opportunity to publish the next block.
The algorithm selects the staker via lottery, depending on each staker’s percentage of total staked funds.

For e.g., if a single staker controls 25% of all funds staked on a given network, they have a 25% chance of mining the next block.

Do you see a problem here?🧐
PoS has a stronger tendency to centralize and concentrate token ownership to large holders & hence its security guarantees are weaker than PoW.

PoS model has governance problems and is more vulnerability to attacks

Let me break it down with another eg
Say we have a PoS network.
..worth $50 bn where 10% of tokens are staked. The $100 bn network can be taken over by any party that is able to allocate $5 bn
All the attacker would have to do is send $5 bn in tokens to a staking contract. While the same would be fairly difficult for PoW models.
Coz it would require purchasing ASICs, acquiring space and energy contracts to mine at a scale larger than the entire network and if such an attack were underway entire network would likely be made aware beforehand by the immense demand for ASICs and electricity.
So, both PoS and PoW their fair share of pros and cons, we do have other consensus mechanisms like PoH (by @solana ), PoC, PoA, PoB.
Let me know if you’d like to know more about these👀🚀
Thats a wrap for Day 16!

I’ll be sharing information on the new vocabulary of the web for next 30 days.🚀

It’s like a free crash course on the terms and methodolgies in Web3.

📌Follow me @laishawadhwa for more such web3 gyaan!

📌RT the first tweet to share with the community

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More from @laishawadhwa

Sep 22, 2022
Whether its a brand fight b/w Pepsi & Coca Cola or Nike launching a new shoe collection, brands spend millions of $$ on marketing to win the battle. For brands to hold a prominent position in the eyes of their targeted audience, strategising is vital

Let me ask you question👇👇
How much does an Umbrella cost?
10$ - 12$ maybe

What's the function of an umbrella?
📌To Keep you dry when its raining

There’s a brand called Pasotti, whos’ umbrellas cost anywhere between 250$ - 800$
Obviously a more sturdy, luxurious umbrella, even opening it sounds good💯 Luxurious umbrella worth 375$
But, why would someone pay 500$ for an umbrella when the function is the same?🤔

When people are buying quality, they’re expecting something different. They take better care of it, and since they take better care of it, it lasts longer.
Read 5 tweets
Aug 26, 2022
Gm web3 fam!

Its finally day 26 of #web3glossary🚀
And with this, series has come to an end

Z: zk Rollups

By learning you'll teach and by teaching you’ll learn. Sharing on web3 terms & jargons for the last 1 month was a great learning experience for me and I hope for you too
Let's get to the thread now?

Having to spend $20 or more in gas fees for a single txn is not ideal if you want to complete a DeFi trade

If you've been hearing zk or zero knowledge, you're not alone. It's the next big thing in web3
With an increase in the number of Dapps, ...
there’s a need for faster processing speeds & cheaper txns.

That’s when layer 2 solutions came in.

Zk rollups are also a layer 2 scaling solution that increases throughput on Ethereum Mainnet by moving computation & state-storage off-chain

Read 14 tweets
Aug 23, 2022
Gm web3 fam!

Its Day 25 of #web3glossary

Decentralized networks can only provide 2 out of 3 benefits at any given time in terms of decentralization, security, & scalability Blockchain Trilemma

Let’s look at modular blockchains which aim at solving for scalability & flexibility
We’ll be comparing different modular blockchains today, but first

What’s modular blockchain?🧐
In monolithic blockchains such as bitcoin,Ethereum all the nodes & validators of the network are required to execute the same txns & do consensus on the chain

Modular blockchain..
..focuses on handling a select few duties (consensus, execution, Data availability & settlement) & outsourcing the rest to one or more separate layers

It’s just like separating a system into distinct components that can be combined in various ways to achieve specific objectives
Read 13 tweets
Aug 21, 2022
Hola folks 👋

Its Day 24 of #web3glossary 🚀🚀

Consensus mechanisms ensure that all the txns on the network are genuine & all participants agree on a consensus on the status of the ledger. PoS and PoW are the most commonly known.

Today we look at PoA, PoB, PoC and PoH

Need some background on consensus algos? Check out this thread on PoS vs PoW
Both PoS and PoW have their fair share of pros and cons, let's look at how other cosensus algos differ

PoA: Proof of Activity (not authority)
To verify participants blocks, it combines its tokens to allow both mining and staking. The blocks themselves do not contain transactions
Read 17 tweets
Aug 20, 2022
Gm Gm Web3 fam!

Its Day 23 of #web3glossary

W: WWW,Wrapped token,wei
Do you remember the first time you heard about Blockchain? Maybe you took it as a new technology that would change everything. Maybe you just wondered if you should start investing in crypto.
👀👇 were just getting your head around the concept of a decentralized web
The truth is web3 is indeed the decentralized internet of the future🚀

#web3glossary was started as a series of twitter threads to help people understand this space better and clear the air around...
.. the terms & jargons we hear around. We are almost at the end of the series and I would like to hear from you what value you gained from it and what more would you like to see😃
Until then, let’s get to today’s thread

Let’s go back to where it all started- the world wide web👇
Read 15 tweets
Aug 18, 2022
Gm gm folks 🫡

Its day 22 of #web3glossary 🚀🚀

V: Validators

Validators of blockchain technology aren't only its sower but its rewards reaper too. Let's get to the depth of it🧐

But first, here's some humor to start with
👇👇 Image
What are crypto validators and how do they work?
Crypto validators = Payment processors of the decentralized networks.
Technically, a crypto validator is a participant in a blockchain responsible for verifying txns.
After verifying the legitimacy of the txn, the validator adds.. to the distributed ledger.

Seems like the job of a blockchain validator is not that difficult!
You receive some data, check its accuracy, and validate it or not.
However, on a distributed ledger, it's easier said than done👀👀
Read 15 tweets

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