What does Proof of stake mean?
So, consensus system. A consensus mechanism describes protocols and algorithms that help cryptocurrency function. Such mechanisms are necessary because cryptocurrencies are not centralized. Additionally, they do not have any control of financial systems. Consequently, they need something that can verify all transactions. Are there certificates issued yet concerning the sphere? Unfortunately, no.
Great news for people who have cryptocurrency. Proof of stake allows stake coins to get the right to check new blocks of transactions and, as a result, put these options to blockchains. This variant was created as an alternative version of proof of work. Let us consider what proof of work is. It should be mentioned that proof of work was the first method of consensus mechanism for cryptocurrencies. Without any doubt, there are a lot of varieties between proof of work and proof of stake.
To begin with, proof of stake decreases using many energy mining blocks. It lower barriers to entry and reduces hardware requirements, too. Moreover, proof of stake offers big support for shard chains. Proof of stake requires little computation power, so validators can firm the network using their individual machines. Specialized mining hardware becomes useless. One more important feature is that proof of stake makes decentralization possible. It, in turn, leads to an increasing level of security.
A very significant thing concerning proof of stake is mining power. It depends on the number of coins validators stake. The more coins are staked, the more likely people who stake will be chosen to add new blocks.
Doubtless, proof of stake makes running a node significantly easy. It does not need huge investments in hardware and energy. That is why some people call it ‘eco-friendly’ mechanism (which is a highly important topic nowadays). Besides, users can also join staking pools if they do not possess enough ETH. Proof of stake and proof of work are similar because proof of stake averts attacks and counterfeit coins with essentially the same mechanism as proof-of-work.
One of the most exciting questions in the sphere of crypto is ‘Is there a possibility that Bitcoin will be converted into Proof of stake? Potentially, there is. This prediction is built on the fact that Etherum started its existence using proof of work and it is transitioning to proof of stake. Another thing is that the described process can take years. However, who knows? Only time will show up. But every great deed was fulfilled step by step.
