Blockchains use a consensus mechanism known as Proof of Stake to confirm transactions before adding them to the chain. Even though blockchains don’t have a central authority, they can still be used as records that can be checked.
The distributed ledger known as a blockchain is able to resist tampering because each transaction is recorded in a chronological order called blocks. If a new transaction is published that conflicts with an existing one, the latter will be undone. Using Proof of Stake, the blocks can be distributed to the public. To prevent attacks like double spending, this mechanism is crucial to the blockchain’s safety.
Proof of Stake (PoS) Ex. Ethereum Merge
After the Ethereum Merge, Ethereum, the second largest cryptocurrency by market cap, will switch to proof-of-stake as its consensus mechanism. Ethereum currently employs “Proof of Work,” another widely used consensus mechanism. Proof of Work, on the other hand, has been heavily criticized for being extremely power hungry. Bitcoin’s Proof of Work method uses more energy each year than Argentina does, at around 150 terawatt-hours. As a result of competing miners expending large amounts of energy to determine a random number and thus earn the right to publish a block, Bitcoin uses a lot of energy.
By eliminating mining difficulty, Proof of Stake circumvents PoW’s needless energy drain. In PoS, validators (instead of miners) stake a certain amount of currency for the chance to publish a block, similar to how Bitcoin miners stake blocks for the chance to publish them. In terms of Ethereum, the sum is fixed at 32 ETH. Every time a block is released, it is broadcast by validators who were chosen at random. Once the proposed block has been verified by a group of other validators, only then will it be published.
In the case of any dishonest behavior from the validator, their deposited stake is slashed as a punishment.
READ ALSO:
Leave a Reply