What is ‘proof of stake’?

From Blockchain to...
Post Reply
User avatar
Posts: 417
Joined: Thu Mar 29, 2018 9:36 am

What is ‘proof of stake’?

Post by RamboLambo » Thu Jun 28, 2018 9:14 am

So, what is proof of stake?
‘Proof of stake’ mining seeks to address several flaws within the proof of work model; chiefly, proof of stake mining ensures that participants can only mine a percentage of transactions that is reflective of their ‘ownership’ stake in a network.

To exemplify, a participant who owns a hypothetical 5% of all tokens on a cryptocurrency network would feasibly be able to only verify 5% of all transactions on that network in a process called ‘forging’ or ‘minting’.

Invented by Sunny King and Scott Nadal, proof of stake mining differs from proof of work in that the next participant to verify a block of transactions is selected by a combination of random selection, wealth, or age. Rather than operate by simple majority (wherein the token holder with the largest balance could foreseeably verify all transactions) some proof of stake networks select participants based on a random process, the age of their coins (or how long they have held).

The concept behind proof of stake mechanics is broadly designed to minimize the threat of monopoly in a cryptocurrency network. For example, it has been speculated (and in some cases observed) that participants on a cryptocurrency network that own 51% or more of the total processing power on that network can effectively ‘take control’ of a blockchain and add or censor transactions or data at will. This event is known as a ‘51% attack’.

https://www.coininsider.com/what-is-pro ... ke-mining/

Post Reply

Return to “LEARN”