Proof of Stake (PoS) and Guarantee in Blockchain system.

Hello, all readers. Back here again in this column, today we have some little knowledge about Proof of Stake. Don’t waste your time, let’s go…

Proof of Stake (PoS) is a method or a type of algorithms that use for verification of transaction in Blockchain network. It has the same objective as Proof of Work (PoW) but differ in steps and methods.

The Proof of Work will use “Mining” in challenge of transaction confirmation to solve the equations, decodes and find the answers. So make it wastes of energy, waste of electricity and very slow too. After that, a new method of “Proof of Stake” was occurred in 2011 by the use of concept as

“No longer mining, that’s waste of energy. Just use the Guarantee instead and whoever pays higher stakes will has a privilege to make confirmation!”

This concept is similar to Proof of Work but instead of transaction confirmation challenging with mining. We will use “the Token Guarantee.”

Whoever has a privilege to make confirmation will depend on the amount of token in hand. If we were caught by trying to cheat or hack, the system will seize your token guarantee.

Compare as, when you use a car or a house for the guarantee. If you try to pay the debt, you will get car or house in return when it cleared. But if you try to avoid the debt, then ready to say goodbye to your lovely car or house.

Proof of Work (PoW)

Proof of Stake (PoS)

Steps of Proof of Stake

• The system will choose a Validator who need to deposit and left some token inside network or called Stake. The size of Stake will define a chance that validator could Forge or build the next blocks.
• When chosen, validator needs to verify all of transactions inside block. A method of verification is “insert token in the block” and consider at that block might has a chance to add into Blockchain.
• If validator has inserted tokens in the block that was counterfeited, he will lose all of deposit tokens. But if that block was corrected, validator will gain rewards follow by guarantee’s ratio.

Now you know the Proof of Stake won’t waste energy anymore and also get high speed, due to no more steps that need longer processing.

So this is not weird that how popular is the Proof of Stake increasing, the first digital currency used this method is “Peercoin”

The Future of Proof of Stake

Proof of Stake has both pros and cons that still argument in the community.

• Firstly, Proof of Stake was noticed that token’s value is “untouchable value” because of token was made from the system and use for guarantee.
• Secondly, it’s capitalism! Using the power of money to guarantee, whoever has more money more advantage. Millionaire would get richer.
• One more importantly, There is a chance to be attacked or called 51% Attack, can they do that?

In the Proof of Work, if we would like to attack the system until accomplished, you should have at least a half mining power. It means you must own enormously miners and be a millionaire.

In the other hands, the Proof of Stake was noticed that it’s too easy for someone who has more tokens in hand. He would has a chance to successfully attack the system.

However, the Proof of Stake still impact on mining community, due to no more mining. All miners feel worry about it would have been used instead of Proof of Work.

Ethereum is now testing and developing Proof of Stake goes along with Proof of Work. These cause to all ETH miners worried about unable to mining forever.

Today, the Proof of Stake still unable to proved and accepted more enough to instead of whole Proof of Work, included the usage of Public Blockchain also less. Most of all were used in Hybrid with MasterNode system such as Zcoin, Dash etc. because the tokens for Proof of Work has been used in Currency and they also have a cost which made these tokens valuable.

Conversely, the Private Blockchain or Consortium Blockchain are suitable for Proof of Stake usage because “the system will be under control of one group or one company as a type of 100% non-public network.”

The first person who issued tokens could give these tokens to the login users as he want.

It seems lessen of Decentralized but when compare with an organization, it becomes more benefits because most of used tokens will have Utility for those business organization. Let them has basic value to compensate all cost of Proof of Work and further on another Blockchain Base Projects.