Summary
Proof of stake binding is a popular consensus mechanism alternative to proof of work. Instead of needing computing power to audit transactions, auditors have to store digital currencies. This reduces the amount of energy consumption needed dramatically. Proof of stake also increases decentralization, security, and scalability.
But obtaining proof of stake connection may be more difficult without access to cryptocurrencies. 51% attacks may be easy on blockchains with low market capitalization. Since Proof of Stake is so volatile, there are many different types of blockchains and different use cases.
the introduction
Proof of Stake is now the most popular blockchain network option. But with so many different types, its core concepts can be difficult to understand. You probably won't find it in its original form today. However, all types of stake proof share the same basic concepts. Understanding these similarities will help you make better choices about which blockchains to use and how they work.
What does stake link directory mean?
The Proof of Stake consensus algorithm appeared in 2011 on the Bitcointalk forum. It is proposed as a solution to working directory issues. Although they share the same goal, which is to reach consensus on the blockchain, the process they use is somewhat different. Participants only have to prove that they have stored the coins, rather than having to provide proof that consumes computational resources.
How does the stake link directory work?
The Proof of Stake algorithm follows a pseudo-random election process to select validators from a set of nodes. The system uses a combination of factors, including storage duration, the element of randomness, and the amount of node wealth.
In Proof of Stake systems, blocks are “generated” not mined. But you may find the term "mining" used from time to time. Most cryptocurrencies that use Proof of Stake launch with a “pre-configured” coin supply to allow nodes to start immediately.
Users participating in the formation process should reserve a certain amount of coins in the network as a reserve. The size of the inventory determines the chances of a node being selected as the next validator; The more inventory, the greater the opportunities. Unique methods are added to the selection process so that preference is not only given to the richest nodes in the network. The two most commonly used methods are random block selection and coin age selection.
Random selection of blocks
In the random block selection method, validators are selected by searching for nodes that combine the lowest hash value and the highest stock. Since the stock size is public, other nodes can usually predict which node will create the block.
Choose the age of the coin
As for the “coin age selection” method, contracts are selected based on the length of time their tokens are stored. The age of a coin is calculated by multiplying the number of days the coin has been stored by the number of coins stored.
Once a node creates a block, its coin lifetime is reset to zero. You must wait a specific period of time to be able to create another block, and this prevents large storage nodes from dominating the blockchain chain.
Transaction audit
Each coin that uses the Proof of Stake algorithm has its own set of rules and methods for what it deems to be the best combination for the network and its users.
When a node is selected to form the next block, it will check whether the transactions in the block are correct. Then you sign the block and add it to the blockchain. As a reward, the node receives transaction fees from the block, and in some blockchains, it also receives a reward in coins.
If a node wants to stop creating a block, its stock and the rewards it has earned will be released after a set period of time, giving the network time to verify that there are no bogus blocks added by the node to the blockchain.
Which blockchains use proof of stake?
Most blockchains that emerged after Ethereum use Proof of Stake consensus mechanisms. Each is usually modified to suit the needs of the network. We will discuss these different types later in this article. The Ethereum network itself is now in the process of transitioning to using Proof of Stake with Ethereum 2.0.
Blockchain networks that use proof of stake or one of its forms:
1. BNB Chain
2. BNB Smart Chain
3. Solana
4. Avalanche
5. Polka dots
Advantages of directory linking stake
A stake directory has several distinct advantages over a working directory. For this reason, new blockchains almost always use proof of stake. Among its benefits are the following:
Ease of adaptation
As user needs change and blockchains change, the proof of stake can change as well. This is evident in the huge number of modifications available. The mechanism is versatile and can easily fit most blockchain use cases.
Decentralization
More users are excited about managing nodes due to its low cost. This incentive and random selection process also increases the decentralization of the network. Although storage pools are available, one's chance of successfully creating a block with proof of stake is much higher. This generally reduces the need for storage complexes.
Energy efficiency
The stake directory has amazing energy efficiency compared to the work directory. The cost of participation depends on the economic cost of storing the coins, not the computational cost of solving the puzzles. This mechanism significantly reduces the amount of energy needed to manage the consensus mechanism.
Scalability
Since Proof of Stake does not rely on actual machines to reach consensus, it is more scalable. No need for huge mining farms or large power supplies. Adding more validators to the network is cheaper, simpler and easier.
Safety
Storage is a financial incentive for the auditor not to process false transactions. If the network detects a false transaction, the auditor will lose part of his stock and his right to participate in the future. Hence, as long as the stock is greater than the reward, the auditor will lose more coins than he would have gained from the fraudulent activity.
To effectively control the network and approve bogus transactions, a node must own a majority of the inventory in the network, also known as the 51% attack. Depending on the value of the digital currency, it may be almost impossible to control the network, as you must obtain 51% of the currencies available for trading in the market.
But this may also represent a defect, which we will explain below.
Disadvantages of directory linking stake
Although the stake binding directory has many advantages over the working directory, it still has some shortcomings:
String split
With a regular stake proof mechanism, there are no mining barriers on either side of the chain fork. When using the working directory, mining on both sides will waste energy. With Proof of Stake, the cost is much lower, which means you can “bet” on both sides of the chain split.
Easy access
To start staking, you will need a stock of the blockchain's native tokens. Which requires you to purchase the token through a trading platform or other method. Depending on the quantity required, you may need a large investment to start storing effectively.
With Proof of Work, you can buy cheap mining hardware or even rent it. With this, you can join an aggregator and start checking and earning quickly.
51% attacks
Although the working directory is also vulnerable to 51% attacks, it is much easier to attack with a stake directory. If the price of the token falls or the blockchain has a low market value, it could theoretically be cheap to buy more than 50% of the tokens and control the network.
Directory of work vs. directory of stake binding
When comparing the two consensus mechanisms, we find a few key differences.
But there is a wide variety of Proof of Stake mechanisms in different blockchains. Many differences depend on the specific mechanism used.
Other consensus mechanisms are based on Proof of Stake
The stake link directory is highly adaptable. Developers can change the specific mechanism to suit specific use cases of the blockchain. Here are some of the most commonly used ones
Delegated Proof of Stake (DPoS)
Delegated Stake Proof allows users to store coins without becoming validators. In this case, they store it with a validator to participate in the block rewards. The more delegates you store with a potential auditor, the greater the chance of selection. Auditors can usually change the amount they share with commissioners to incentivize them. An important factor for commissioners is also the reputation of the auditor.
Nominated PoS (NPoS)
Nominated Proof of Stake is a consensus model developed by Polkadot. It is very similar to the delegated stake linkage guide, but it differs from it in a major point, which is that if the nominee (delegate) stores it with an auditor with malicious intentions, he may lose the stake he has stored.
Candidates can choose up to 16 validators to store with. The network will then distribute their stakes equally to the selected validators. Polkadot also uses several methods in game theory and selection theory to determine who will form a new block.
Power by Stake (PoSA) Guide
BNB Smart Chain uses authority-by-stake evidence to reach network consensus. This consensus mechanism combines proof of authority and proof of stake peg, allowing validators to form blocks interchangeably. A group of 21 active validators are eligible to participate, selected according to the amount of BNB tokens they have stored or delegated. This pool is determined daily, and the BNB chain stores this selection.
Conclusion
The way we add transaction blocks to the network has changed dramatically since Bitcoin. We now no longer need to rely on computing power to reach digital currency consensus. The stake proof system has many advantages, and history has proven the success of the stake proof. Over time, it appears that Bitcoin will be one of the few remaining networks that operate with a proof-of-work mechanism. At the moment, it appears that the evidence of the stake peg remains and will continue.
