Proof of Stake(PoS) 

 

The first blockchain rewarding mechanism is proof of work (PoW) used for Bitcoin mining and several cryptocurrencies, the proof of stake (PoS) rewarding mechanism was established in 2012 by Sunny King the founder of Peercoin. Proof of stake was developed to curtail the high cost of network maintenance, slow finality, and power consumption in the proof of work blockchain, although the highest bidder takes the highest reward on both sides.

What is Proof of Stake (PoS)?

Proof of Stake is a consensus mechanism used on the blockchain to achieve reward distribution using a smart contract.

The (PoS) Validator 

Proof of Stake validators are similar to the Proof of Work miners, a certain amount of funds is required to be validator and join the activation queue, which limits the rate of incoming validators. When received, the validator gets a new block, and the transactions on the block are re-executed and checked to ensure authenticity. There are ways used by various projects to elect a validator who runs a node on the blockchain. Being a validator requires commitment and monitoring of activities on the network, a validator does not require a mining rig, but active computer hardware and software and they also act as agents to third-party stakeholders. 

Staking 

Staking can be performed by anyone who wishes to omit funds on-chain and off-chain using a smart contract via a decentralized application. There are various ways of staking.

Qualities of Proof of Stake.

There are various qualities of proof of stake which make decentralized finance more accessible and profitable.

• Finality– the network can make a large number of high transitions without any delays, and some protocols possibly make 5 to 2 seconds transaction finality.
• Energy Efficient – the Proof of Stake blockchain has no energy computation and requires no mining hardware.
• Low Gas remittance – Proof of Stake has the lowest gas fee compared to Proof of Work, some are below $0.5 per transaction.

How Secure Is The Proof of Stake?

The Proof of Stake blockchain uses different mechanisms to create a securing program, such as auditing and validators’ security.

What is an auditing 

A security audit is a method that evaluates smart contracts for vulnerabilities and secures the blockchain programs, this is done by professionals whose jobs are to authenticate blockchain programs

The Validator security

To prevent room for manipulation on a proof of work blockchain, and to ensure security, validators use separate software, The execution client, consensus client, and node software. Validators are signaled for additional funds when required, if failed, the validator node will be terminated, the funds represent a mathematical algorithm that secures the chain. Consensus staking is another way to ensure the security of a Layer 1 blockchain whereby stakes are actively supporting the nodes through a consensus mechanism. 

Proof of stake blockchain enhances decentralization and the advantage of proof of work is the security standard.