Thread by @OwlExplains

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