Bitcoin PoS takes everything you know and love about Bitcoin and makes it faster, more rewarding, and ready for real-life digital currency payments. Alarge amount of energy is required to keep the Bitcoin network up and running these days, so it is vital to explore alternative consensus mechanisms. And not only because they are better for the environment, but also because the Proof-of-Stake (POS) consensus mechanism also allows for fairer microeconomics.
Does PoS solve Bitcoin centralization problem?
Alexander Malev: The problems associated with Bitcoin’s centralization are many and have been documented in the foregoing sections. However, Bitcoin PoS solves those problems through a novel solution — namely, by replacing the Bitcoin proof of work algorithm with a Bitcoin proof of stake algorithm. PoS doesn't require you to buy thousands of devices in order to generate more mining power. It is enough just to have a deposit with "frozen" coins and receive a reward in proportion to the amount you invested!
Is it true that PoS reduces electricity consumption by 99% ?
A.M: Of course it is! I think everyone can find studies showing that the total amount of electricity needed to keep the Bitcoin network operational exceeds the amount used in over 159 individual countries! This is not only harmful to the environment, but it also slows down the rate at which cryptocurrencies can be sent, which affects mass adoption. By reducing the need for electricity, the playing field for network validation becomes much more even. Without having to worry about a cheap electricity source, network validators on the Bitcoin PoS network can simply use the energy source from wherever they are. The electricity needed by lightweight hardware for PoS validating is such that only minimal electricity is needed. The amount of electricity it takes to run a laptop is enough — but what’s more is that in a PoS network, validators, referred to as stakers, can delegate the task of staking to a staking pool. This means that individual stakers can validate the network without having to actually run hardware themselves — all the while their stake is still in their wallet as usual, thereby circumventing the centralization of mining pools, too.
What is the most important difference between PoS and PoW ?
A.M: Proof of Work requires all miners to try to solve a very difficult problem and find a hash within a certain period, the one with the most computing power wins. Proof of Stake randomly selects a transaction validator with a certain probability, based on the percentage of coin holdings from the total.
And what is the future of Proof of Stake ?
A.M: Proof of Stake is undoubtedly better in terms of lower energy consumption. There are a lot of examples that the world is interested in PoS, even the fact that a year has passed since the Winklevoss fund, Pantera Capital and other large investment crypto funds invested $ 4,500,000 in a startup that provides StaaS service (Staking- as- a-Service) says a lot. While everyone is watching the world leaders in the crypto world, such as China and America, are launching startups all over the place, and even in America (the Staked startup launched in New York) staking as a potential form of earning on PoS cryptocurrencies is gaining momentum. At this point, it's safe to say that Proof of Stake is another interesting development in the fast-paced blockchain space, and we're thrilled to see where it is going as well as what impact it has on the broader ecosystem.
What about PoS security against 51% attacks?
A.M: Security is the top concern amongst cryptocurrency advocates, investors, speculators, and network participants. Who wants to lose everything because of a flaw in the system? Bitcoin has just such a flaw — it is called centralization. Mining creates a paradigm of centralization that raises the specter of a 51% attack. If such an attack were to occur, the entire network, and its billion of dollars in value, would be jeopardized. It’s safe to say that in such a circumstance, the Bitcoin network would be finished. Bitcoin PoS, by transitioning the entire updated Bitcoin codebase to proof of stake, avoids the possibility of a 51% attack with its elegantly simple design. Whereas an attacker needs to control 51% of the network hashrate for Bitcoin, if an attacker made an attempt on Bitcoin PoS, they would need to control at least 50% of the network’s token supply. However, because staking pools don’t require the physical warehousing of tokens being staked and are merely delegates of stake, don’t possess the tokens in a saleable format. Again, this reduces risk of 51% network attacks for not only Bitcoin PoS, but all proof of stake networks.
Does Bitcoin PoS use the same codebase as Bitcoin?
A.M: Well, as its core, Bitcoin PoS uses the same updated codebase as Bitcoin. The significant difference, however, is the consensus algorithm. Bitcoin PoS uses proof of stake, rather than proof of work, for consensus building. It is important to note that Bitcoin PoS is not a Bitcoin chain fork. Instead, it is an original implementation of the Bitcoin codebase with several performance and consensus upgrades that make Bitcoin PoS a superior choice for financial applications such as payments — allowing to vastly improve network scalability.
How can we use staking with Bitcoin PoS?
A.M: Proof of work networks require miners with access to cheap electricity and expensive hardware mining rigs. Bitcoin PoS, on the other hand, eliminates the need for a mining rig because proof of stake networks are lightweight and don’t place excessive hardware demands on stakers. Reducing the burden on network participants is a key Bitcoin PoS design goal. The lower the strain and demand on stakers, the higher the rate of participation, and the more decentralized and flexible the network becomes. If the paradigm for participation requires an actor to have immense resources, then we will only see a repetition of the hoarding of resources already present in the world. So, the question we must ask ourselves is — should blockchain be for the 1%? Or is blockchain an attempt to go in the other direction and widen the scope of participation? Fundamentally, we believe in the latter, and have designed Bitcoin PoS to encourage mass participation.
Is PoS safer that PoW by earth aspect?
A.M: Bitcoin PoS is environmentally friendly! The future is in our hands. Anyone and everyone who has a stake in the future also owes it to themselves to participate only in networks who understand the ramications of using environmentally disastrous technologies such as PoW. As such, the Bitcoin PoS team is committed to nding better ways to do blockchain, beginning with making Bitcoin green. For years, the prots made on Bitcoin speculation were the only green things about it. However, now that there is an update to the network which integrates proof of stake, investors, speculators, and network participants alike can all rejoice in the fact that this is a form of digital currency that reduces blockchain’s impact on the world.