Proof of Stake (PoS)

POS by its acronym is proof of participation, It is the second most used consensus mechanism in the blockchain, you need to store cryptographic assets in your account, it is used for the blockchain to work from validation in proportion to your amount of holding in the associated cryptocurrency , do not encourage extreme amounts of energy consumption.

The proof of stake suffers from the problem of the validation nodes, they validate conflicting copies in the blocks, its minimum cost to do it and a lower possibility of losing rewards to validate a block, if the problem continues it is possible that double spending is allowed, conflicting string validators are penalized. Several companies launched their own ICOs using the Ethereum network to raise the necessary funds to build the technology that would price their tokens. Nonetheless, many people in crypto society were excited by the promises that Ethereum and ICOs would bring not only to society, but to the entire world. The popularity of Ethereum continued to grow and Dapps and ICOs were within the reach of groups of people who were not yet aware of Bitcoin. For several years, disagreements within the Bitcoin society focused on how to scale the Bitcoin blockchain. Scaling is a term we use to describe how to make operational improvements to the blockchain. Unlike private software companies, to make improvements to a decentralized network such as Bitcoin, there has to be an agreement between the most important participants in society. These participants include Bitcoin Core developers, mining companies and pools, crypto industry leaders (such as wallets and exchanges) and mainly society. A few years ago, the Bitcoin Core developers had a lengthy discussion (lasting over 3 years) regarding how to scale the Bitcoin blockchain. The idea suggested that a hard fork and a soft fork, known as SegWit2X, be implemented on the Bitcoin blockchain. Governance models used in blockchain and created to replace its peer PoW, used for cryptocurrencies, for example Bitcoin and Ethereum, proof of participation does not require a large energy consumption, achieve a distributed consensus help in the network ensure a blockchain and provide the right economic incentives for their honest validation of transactions, this system at its base is the amount of cryptocurrencies a user has and takes into account how long they have had those coins, the POS is considered less risky in terms From the possibility of miners attacking the network, the POS was created by developer Sunny King in 2011, he presented his White paper and highlighted the working of the PoS algorithm.

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How does it work?

Mechanism that determines the node that approves the addition of a block to the chain of blocks based on assets held, the proof of participation demands that the user demonstrates the possession of a number of cryptocurrencies, claims additional blocks in the chain of blocks, the validator will be rewarded a network transaction fee, being a random system avoids centralization, the richest individual will always be the block increased in their wealth and control, POS reduces power consumption and convenient POW’s as their system does not needs expensive needs money to maintain the network, miners mine or validate transactions in blocks depending on the number of coins they have, it takes little time to generate working blocks.

For example: bitcoin uses PoW, you must wait at least 10 minutes for each shipment but with POS the transaction is completed in seconds, by moving to PoS the time required to exchange cryptocurrencies will be reduced.

Advantages

It is participation that reduces the enormous expense of electrical energy using proof of work, to secure a chain of blocks, it is counted as an advantage the fact that thanks to saving electricity consumption there is no need to issue new cryptocurrencies to motivate users. participants to contribute to the network, its other advantage is the reduced risk of centralization, the proof of participation allows the use of theory algorithms and its random system, the reward granted is proportional to the amount of coins set aside in custody, the PoS counteracts centralization , guard the coins are always their holders, in the proof of stake their reward amount is determined by its own mechanism, the cryptocurrency other more, the coins generated as the proof-of-work algorithm, is formed in the commissions added in the participants, another advantage worth mentioning is the speed of the formation of each block that is carried out.

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