Blockchain Secrets: Discover What Blockchain is and the Secrets Behind Blockchain Technology by Pestel Jones

Author:Pestel, Jones [Pestel, Jones]
Language: eng
Format: epub
Publisher: Pestel Publishing
Published: 2020-05-22T16:00:00+00:00

Proof of Stake

Most of the significant cryptocurrencies today work off of some variation of the proof of work model, either through the SHA256 hash or through another, similar hash. However, Ethereum, bitcoin’s largest competitor, has been working on an alternative that could significantly change the way blockchain transactions are verified.

In early 2017, Ethereum released the implementation guide for a hybrid proof of work/proof of stake system. They are rolling out this new system in phases before they make it the platform’s primary verification system. The plan currently states that the blockchain platform will alternate between the two systems. With the new system, about one out of every 100 blocks will use the new system while the rest will continue to use the old system.

There hope is that the new system will improve the rate at which they can produce new blocks. This will mark the first step in the plans for Ethereum’s evolution. This will be the first time a proof of stake system will be used to secure a blockchain, which will be a significant step forward. This new system will serve as the proof of concept test for an alternative to the proof of work model that dominates the cryptocurrency today and provide proponents the ability to test their claim of its superiority. When the new proof of stake model is rolled out on a larger scale, it will significantly reduce the amount of electricity that is required to verify a single block.

It's important to understand just how the proof of stake system differs from the proof of work model. With proof of stake verification, rather than having the miner solve the equation to verify the block, a validator, who is confirmed reliable by the stake they have in the system, will commit to its accuracy. They know that if they lie, they will lose their own ether as well.

During the first stage of deployment, all of the blocks that are verified through the new system will also be checked through the old system to help double verify that the blocks contain the information that they should, while also testing the accuracy of the new system. Validators will then look at the various chains that are available and make a decision based on how much ether is currently in the chain. If they make a poor choice, they will lose their money. This process will help form a consensus that leads to a single more massive chain from the many smaller ones.

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