Click here to Trading and Buy Bitcoin


Retrieved from "https:/wiki/Special:Search"
Proof of stake - Bitcoin
Extended-protected article

Proof of stake

From Bitcoin, the free encyclopedia
Jump to navigation Jump to search

Proof of stake (PoS) protocols are a class of consensus mechanisms for blockchains that work by selecting validators in proportion to their quantity of holdings in the associated cryptocurrency. Unlike a proof of work (PoW) protocol, PoS systems do not incentivize extreme amounts of energy consumption. The first functioning use of PoS for cryptocurrency was Peercoin in 2012. Other uses have followed, and the Ethereum Foundation has announced a plan to switch Ethereum from PoW to PoS within 2021.

Description

For a blockchain transaction to be recognized, it must be appended to the blockchain. Validators carry out this appending; in most protocols, they receive a reward for doing so.[1] For the blockchain to remain secure, it must have a mechanism to prevent a malicious user or group from taking over a majority of validation. PoS accomplishes this by requiring that validators have some quantity of blockchain tokens, requiring potential attackers to acquire a large fraction of the tokens on the blockchain to mount an attack.[2]

Proof of work, another commonly used consensus mechanism, uses a validation of computational prowess to verify transactions, requiring a potential attacker to acquire a large fraction of the computational power of the validator network.[2] This incentivizes consuming huge quantities of energy. PoS is tremendously more energy-efficient.[3]

You have to switch to proof of stake. Proof of work should be illegal.

— William Entriken, Ethereum developer (April 2021)[4]

Attacks

PoS protocols can suffer from the nothing-at-stake problem, where validator nodes validate multiple conflicting copies of the blockchain because there is minimal cost to doing so, and a smaller chance of losing out on rewards by validating a block on the wrong chain. If this persists, it can allow double-spending.[5] This can be mitigated through penalizing validators who validate conflicting chains[5] or by structuring the rewards so that there is no economic incentive to create conflicts.[1]

Variants

Variations of stake definition

The exact definition of "stake" varies from implementation to implementation. For instance, some cryptocurrencies use the concept of "coin age", the product of the number of tokens with the amount of time that a single user has held them, rather than merely the number of tokens, to define a validator's stake.[2]

Delegated proof of stake

Delegated proof of stake (DPoS) systems separate the roles of the stake-holders and validators, by allowing stake-holders to delegate the validation role.[5]

Implementations

The first functioning implementation of a proof-of-stake cryptocurrency was Peercoin, introduced in 2012.[1] Other cryptocurrencies, such as Blackcoin, Nxt, Cardano, and Algorand followed.[1] However, as of 2017, PoS cryptocurrencies were still not as widely used as proof-of-work cryptocurrencies.[6]

There have been repeated proposals for Ethereum to switch from a PoW to PoS mechanism, e.g., as advocated by Ethereum co-founder Vitalik Buterin and leading Ethereum developer William Entriken.[4][7]In April 2021, the Ethereum Foundation announced that it planned to switch Ethereum to a PoS system by the end of 2021.[7] However, switching to a PoS system is a substantial change, and progress toward the move has not been steady. As Entriken also said, "It's always been three months away. These things don't just happen immediately."[4]

References

  1. ^ a b c d Saleh, Fahad (2021-03-01). "Blockchain without Waste: Proof-of-Stake". The Review of Financial Studies. 34 (3): 1156–1190. doi:10.1093/rfs/hhaa075. ISSN 0893-9454.
  2. ^ a b c Tasca, Paolo; Tessone, Claudio J. (2019-02-15). "A Taxonomy of Blockchain Technologies: Principles of Identification and Classification". Ledger. 4. doi:10.5195/ledger.2019.140. ISSN 2379-5980.
  3. ^ Zhang, Rong; Chan, Wai Kin (Victor) (2020). "Evaluation of Energy Consumption in Block-Chains with Proof of Work and Proof of Stake". Journal of Physics: Conference Series. 1584 (1): 012023. Bibcode:2020JPhCS1584a2023Z. doi:10.1088/1742-6596/1584/1/012023. ISSN 1742-6596.
  4. ^ a b c Sparkes, Matthew (2021-03-30). "NFT developers say cryptocurrencies must tackle their carbon emissions". New Scientist. doi:10.1016/S0262-4079(21)00548-0. Retrieved 2021-04-07.
  5. ^ a b c Xiao, Y.; Zhang, N.; Lou, W.; Hou, Y. T. (2020). "A Survey of Distributed Consensus Protocols for Blockchain Networks". IEEE Communications Surveys and Tutorials. 22 (2): 1432–1465. arXiv:1904.04098. doi:10.1109/COMST.2020.2969706. ISSN 1553-877X. S2CID 102352657.
  6. ^ Li, Wenting; Andreina, Sébastien; Bohli, Jens-Matthias; Karame, Ghassan (2017). "Securing Proof-of-Stake Blockchain Protocols". In Garcia-Alfaro, Joaquin; Navarro-Arribas, Guillermo; Hartenstein, Hannes; Herrera-Joancomartí, Jordi (eds.). Data Privacy Management, Cryptocurrencies and Blockchain Technology. Lecture Notes in Computer Science. Cham: Springer International Publishing. pp. 297–315. doi:10.1007/978-3-319-67816-0_17. ISBN 978-3-319-67816-0.
  7. ^ a b Lau, Yvonne (2021-05-27). "Ethereum founder Vitalik Buterin says long-awaited shift to 'proof-of-stake' could solve environmental woes". Forbes. Retrieved 2021-05-29.