Bitcoins Carbon emissions<\/a> comes close to the whole country of New Zealand, coming in at a whopping 37 megatons of carbon dioxide each year. If only there were a greener alternative…<\/p>Introducing: the opposing consensus mechanism, Proof-of-Stake<\/h6>
Intending to counter this problem, in 2012, another consensus mechanism called Proof-of-Skate was proposed. Displaying a promising potential for a more sustainable future for blockchain technologies, Proof-of-Stake uses an algorithm that allocates blocks based on distribution of wealth instead of computational power. Meaning there is no need for miners to accumulate masses of specialised equipment for setting up Proof-of-Work nodes to validate blocks. Although it reins in the energy consumption by a significant amount, not everyone is convinced. Here\u2019s why:<\/p>
Proof-of-Stake vs Proof-of-Work: By solving one problem, you create another<\/h6>
So, the language varies from each consensus mechanism. Where Proof-of-Work uses miners and mining, Proof-of-Stake uses validators and minting or forging. Proof-of-Stake works by validators initially depositing a certain amount of coins into the network as stake.<\/p>
Operating much like a security deposit, the size of the stake determines the chances of the validator being chosen to mint the next block. This means that instead of sending the block out to everyone, only one validator gets the block. This is where the problem arises, and miners aren\u2019t eager to convert over.<\/p>
Not only does it illuminate everyone getting a chance at validating the next block, but it also brings forward a question. Does Proof-of-Stake favour the wealthy? The short answer is, surprisingly, no. The algorithm does factor in how much wealth you have put in the network but also takes other variables into account to make the selection process as fair as possible.<\/p>
Okay, so what about the 51% attack?\u00a0<\/h6>
Well, much like the Proof-of-work system it is possible for a validator to obtain 51% of the hashing power, centralising the system and start approving fraudulent blocks. On the other hand, to do so in the Proof-of-Stake system is significantly more expensive than to do it in the Proof-of-Work system because of the opportunity costs.<\/p>
It would also deter attacking the network if one validator holds 51% of the power in the Proof-of-Stake system instead of one, or multiple miners holding 51% of the power in Proof-of-Work. Overall, there are multiple reasons for and against either consensus mechanism to dominate.<\/p>
So, who is currently winning the battle and who will win the war?<\/h6>
In a nutshell, Proof-of-Stake brings additional risks when compared to Proof-of-work and needs further research to fully understand the limitations. Although Proof-of-Stake is a definitely more sustainable option, at the moment, Proof-of-Work is currently holding down the fort as the current winner of the battle.<\/p>
However, since Proof-of-Stake was invented, a few cryptocurrencies such as Ethereum have pledged to change their consensus from Proof-of-Work to Proof-of-Stake to hopefully promote others to follow suit.<\/p>
On the other hand, virtually all Bitcoin miners are against converting over. Furthermore, the fact that Bitcoin doesn\u2019t have a central body means all minors will have to agree on the voluntary conversion, and that won\u2019t happen overnight.<\/p>
Going into a more eco-aware age, I envision an era where we will start to see more Proof-of-Stake consensus mechanisms implemented within blockchain technologies. In my opinion, Proof-of-Stake will eventually win the war, although the battle between Proof-of-Work and Proof-or-Stake is still ongoing and will be for the foreseeable future.<\/p>\t\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"
Proof-of-work vs Proof-of-stake the battle of consensus mechanisms for the future of cryptocurrency mining nodes by Natasha Kingsley, Design Enterprise Studio Member, March 2022 Nowadays in this digital era, it is beyond reasonable doubt that most people know what a cryptocurrency is. What they don\u2019t necessarily know is how to start mining it.\u00a0This article will […]<\/p>\n","protected":false},"author":1,"featured_media":1676,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[76,75,41,60,13],"_links":{"self":[{"href":"https:\/\/designenterprisestudio.com\/wp-json\/wp\/v2\/posts\/1669"}],"collection":[{"href":"https:\/\/designenterprisestudio.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/designenterprisestudio.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/designenterprisestudio.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/designenterprisestudio.com\/wp-json\/wp\/v2\/comments?post=1669"}],"version-history":[{"count":25,"href":"https:\/\/designenterprisestudio.com\/wp-json\/wp\/v2\/posts\/1669\/revisions"}],"predecessor-version":[{"id":1800,"href":"https:\/\/designenterprisestudio.com\/wp-json\/wp\/v2\/posts\/1669\/revisions\/1800"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/designenterprisestudio.com\/wp-json\/wp\/v2\/media\/1676"}],"wp:attachment":[{"href":"https:\/\/designenterprisestudio.com\/wp-json\/wp\/v2\/media?parent=1669"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/designenterprisestudio.com\/wp-json\/wp\/v2\/categories?post=1669"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/designenterprisestudio.com\/wp-json\/wp\/v2\/tags?post=1669"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}