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Proof Of Stake

Proof-of-stake

There are many different consensuses mechanisms that are in use to secure blockchains and their networks, nodes, users and services - Proof-of-stake is just one of these protocol standards.

With Bitcoin, the consensus is Proof of Work, this means that mining? hardware is required to solve complex mathematical algorithms and therefore discover new blocks to then reap their rewards. The mining? hardware machines use vast amounts of electricity to operate and with the network difficulty ever climbing, it becomes eventually harder and harder to gain rewards unless the mining? equipment is constantly being updated in line with network and difficulty rises - one reason for this is due to more and more miners joining the network with their machines competing for the same block rewards.

Proof-of-stake is a preferred method now as uses significantly less hardware and processing power to solve cryptographic problems and find blocks, instead of using a smart device, mobile phone, CPU, GPU, FPGA or ASIC miner; the user just needs a good level of coins held within the wallet to stake - this is known as the coin weight, then, some time on the network is required within the coin blocks? to remain untouched, the network then rewards those miners with block rewards? in the form of newly minted coins according to the IONCoin Block Reward Schedule.

Users are rewarded for holding coins in their wallet (and it to be unlocked for staking) the more coins they have the more often a stake reward? is sought. Those with the largest client wallet balances receive the largest rewards which offer an incentive to maintain a smoothly operating blockchain.

Proof of stake helps and promotes decentralization and is good for the greater environment in that ongoing ever-greater massive computing power (and electricity) supplies for the same return of mining? rewards? are not required as in comparison to the Proof of Work consensus.

Page last modified on July 28, 2019, at 10:50 PM