Proof-of-Stake
- Proof-of-stake is a cryptocurrency consensus mechanism for processing transactions and creating new blocks in a blockchain.
- Under PoS, validators are chosen based on the number of staked coins they have.
- PoS was created as an alternative to proof-of-work (PoW), the original consensus mechanism used to validate transactions and open new blocks.
- While PoW mechanisms require miners to solve cryptographic puzzles, PoS mechanisms require validators to hold and stake tokens for the privilege of earning transaction fees.
- Proof-of-stake (POS) is seen as less risky regarding the potential for an attack on the network, as it structures compensation in a way that makes an attack less advantageous.
- The owners offer their coins as collateral—staking—for the chance to validate blocks and earn rewards.
- To become a validator, a coin owner must "stake" a specific amount of coins. For instance, Ethereum requires 32 ETH to be staked before a user can operate a node.
- Blocks are validated by multiple validators, and when a specific number of validators verify that the block is accurate, it is finalized and closed.
- People (now referred to as validators) stake their ETH on the Beacon Chain to secure the blockchain
Video : Basics
Question / Answer
Vitaly Dmitrievich Buterin, better known as Vitalik Buterin, is a Russian-Canadian computer programmer, and co-founder of Ethereum. Buterin became involved with cryptocurrency early in its inception, co-founding Bitcoin Magazine in 2011.
Bibliography/References
- None