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Why is Proof of Stake considered to be the future of blockchain?

Proof of Stake. A review by a Bitcoin mixer: mixer.money
Why is Proof of Stake considered to be the future of blockchain?

  1. Creating an alternative
  2. PoS is the future of blockchain

The integrity of transactions in the crypto industry depends on two verification mechanisms, Proof of Work and Proof of Stake. As the Ethereum blockchain prepares to be updated, users will hear the term “Proof of Stake” more often.

Creating an alternative

Eth 2.0 is an update to the Ethereum blockchain designed to increase Ethereum’s transaction capacity, reduce fees, and make the network more sustainable.

Proof of Work, the older of the two algorithms, uses a competitive verification method to validate transactions and add new blocks to the blockchain. This requires a lot of energy, which has caused environmental problems. PoS was created as an alternative to avoid unnecessary waste of resources. All input parameters in it are set with constant characteristics based on the amount of locked funds.

Proof of Stake is a cryptocurrency consensus mechanism for processing transactions and creating new blocks in a blockchain. Its operating principle is very straightforward:

  • a blockchain validator is responsible for verifying transactions on a blockchain;
  • once verified, the transactions are added to the distributed ledger.

In PoW systems, validators are miners who solve computational mathematical problems to win the right to verify transactions. They earn bitcoin rewards for their work, but they consume a lot of electricity.

In PoS, validators are rewarded if they stake the network token — ether (ETH) — and correctly participate in the network. This is known as staking.

Proof of Stake is also considered less risky in terms of a potential attack on the network because it allows validators to select a block only if they have provided a security deposit.

PoS is the future of blockchain

Alex Lemberg, CEO of Nimbus Platform, said: “Proof of Stake will, in my opinion, make attacks considerably more punitive and provide for easier identification of the attackers. The automated method of slashing which segregates and burns the tokens of attackers will certainly make attackers think twice before initiating”.

Nimbus blockchain platform. A review by a Bitcoin mixer: mixer.money

In addition, Lemberg says, the overall costs associated with attacking the network will be considerably higher than within Proof of Work. The expert believes that a viable attack would require investing at least $20 million, and even then, there is a risk of losing the money.

PoW is prone to a 51% attack, where scammers create a powerful parallel chain and then suddenly post it with another cryptocurrency flow on the accounts. A “double spending” effect is created. Another big disadvantage of PoW is the need for miners to constantly build up their equipment capacity in order to make a profit.

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