** Consensus mechanisms in the Cryptocurrenc
Cryptocurrencies such as Bitcoin, Ethereum and others, digital or virtual currencies that use cryptography for safety and decentralized control. In order to maintain the integrity of these cryptocurrencies, consensus mechanism is needed to validate transactions and ensure that all participants are the same as the blockchain.
In this article, we are immersed in the two most common consensus mechanisms used in the cryptocurrency: to justify the work (POW) and the stake (POS).
Certificate of Work (POW)
Certificate of work is one of the earliest and most widely used consensus algorithms. This was first introduced by Satoshi Nakamoto in 2008 as a solution to the difficulty problem of the Bitcoin Mining Process.
This is how the Pow Works:
- Mining People Compete : Mining Competes to Solve Complex Mathematical Puzzles That Require Significant Calculation.
- Puzzle Solving : The miner who solves the puzzle must first add new transaction blocks to the blockchain and transfer them to the network.
- Valid
: validators (miners) solving the puzzle have a better chance of creating new blocks that are then broadcast to the network.
- Energy Consumption : The Solution of Pop Puzzles Requires Significant Calculation Performance, which can lead to High Energy Consumption and Environmental Degradation.
Example: Bitcoin Mining
Consider An Example To Illustrate Your Pow Work:
- Solution of puzzle : The miner solves a complex mathematical puzzle that requirements 100 million calculation cycles.
- Reward : The Mining will create new transaction blocks and transmits them to the network.
- Power Consumption : The miner spent about 10 minutes of electricity on the puzzle.
Certificate of Stake (POS)
The stake is a consensual algorithm introduced by Satoshi Nakamoto in 2014 as a pow alternative. It is designed to be more energy efficient and environmentally friendly.
This is how pos works:
1.
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- Burning at Stake : validators with a higher bet have a better chance of creating new blocks that will then be broadcast to the network.
- ENERGY CONSUMPTION
: Create a New Block in POS Requires Less Computing Performance Than POW.
Example: Ethereum Gas-based Validation
In order to illustrate how pos works on Ethereum, let’s look at an example:
- Making and validation : Anyone who owns or possesses a certain amount of ethereum can make coins.
2.
- Gas-based Validation : To Create New Blocks, The Highest Gas Limit Creates A New Block.
- ENERGY CONSUMPTION : Create a New Block in POS Requires Less Computing Performance Than POW.
Conclusion
In summary, both work and bet (POS) evidence uses widely used consensus mechanisms in the cryptocurrency. While Pow was the original solution introduced by Satoshi Nakamoto in 2008, POS became more popular as an alternative due to pos’s potential energy efficiency and environmental sustainability.
However, it is essential to note that both algorithms have limitations and vulnerabilities. For exam, Pow is sensitive to mining asic (Application -Secific integrated circuit), while pos can be vulnerable to a 51% attack if a single entity controls more than half of the stake.
