What is Proof of Stake (PoS) ?

Our last 🧵 looked at the original Nakamoto #consensus method that uses #ProofofWork - a trusted & robust method - but very time & energy consuming.

Enter #ProofofStake
1/ With #ProofofStake validators don’t race to solve #cryptographic puzzles (also known as #mining and the main reason #ProofofWork is so energy intensive).

Instead validators #stake their own #crypto assets in order to participate in consensus.
2/ This uses much less energy and is faster - which is important for the #environment and for #applications that require speed and scalability.
3/ There are many variations of #ProofofStake.

At the core they all look at who has staked #tokens to determine who participates in forming and validating the next block.
4/ Some #ProofofStake methods randomly pick a staking #validator and allow them to form the next block and add it to the #blockchain.
5/ More advanced #ProofofStake methods have all staking #validators participate in deciding on the contents of the block and when it is added to the #blockchain.
6/ Why is all this important? (Quick recap)

Because the #consensus mechanism is an essential component of the (more) #decentralized vision for #Web3 which #blockchain enables - where #data is not held by one central authority that is subjective to attack or corruption.
7/ By enabling varying degrees of #decentralized decision making that users can #trust, #consensus mechanisms prevent malicious actors manipulating or corrupting the #database, so preserving the #integrity of the #blockchain and the interests of the participants.
8/ We have covered #ProofofWork and #ProofofStake which are the most prevalent methods.

There are many others out there - eg Proof of Activity, Proof of Capacity, Proof of Burn 🔥

Look them up!

That’s a wrap from us 🦉🦉🦉 on #consensus

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More from @OwlExplains

Aug 17
What is Proof of Work (PoW)?

Our last thread introduced the topic of #consensus mechanisms which determine how #data is added to the #blockchain

In this 🧵 we look at consensus mechanisms that use Proof of Work:
1/ A group of owls is called a Parliament.

And just as there are different ways to participate in a democracy (eg voting in a referendum vs electing a representative to decide on your behalf) - there are also different ways of participating in decision making on a #blockchain
2/ The first #blockchain developed for #bitcoin by Satoshi Nakamoto uses Nakamoto #consensus
Read 9 tweets
Aug 16
What is a #consensus mechanism?

Quick 🦉 fact before we dive in..

Did you know that the collective noun for a group of owls is a ‘Parliament’?

This is a great starting point to understanding #consensus mechanisms on a #blockchain
1/ A #consensus mechanism on #blockchain is the process by which participants ‘agree’.

A bit like #voting in a #parliament.

This simple diagram describes the basic process:
2/ #consensus is critical to #blockchain because it determines how #data is added to the #database - that is, how the next #block is added to the chain, which as we explained last week is secured by #encryption
Read 8 tweets

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