PoS uses a processplus
pseudo-random election to choose the validator of the next block, which depends
on the amount of tokens that each node has staked. In order to prevent nodes
with high stakes from dominating the network, techniques such as Random Block
Selection and Room Age Based Selection are generally adopted by the algorithm.
It is generally
believed that the higher a node's stake, the more likely it is that the node
wants the network to remain secure. In order to launch a 51% attack, a Node
would require control of 51% of the entire circulating supply, an expensive
proposition, just like PoW. Additionally, if a node behaves dishonestly, all of
its staked parts are confiscated by the network, which further incentivizes
nodes to stay by the rules.
Since no special
material is required to become a validator, anyone availablesant of a simple
laptop can join the network as a node. Greater decentralization undoubtedly
leads to greater security.
However, just as every
coin has two sides, greater decentralization also results in performance issues.
The nodes in a PoS network have different hardware metrics, which makes the
network as strong as its weakest node. Block validation time may be longer for
nodes using obsolete hardware, resulting in an overall increase in confirmation
times under heavy traffic. Anyone who's tried to participate in a Neo ICO would
know what I'm talking about here!
The PoS family
Efforts have been made
by various blockchain projects to remedy the limitations from which
conventional PoS suffers, by providing modifications
in the protocol while
retaining its basic essence. Daniel Larimer came
with Delegated proof
of stake (DPoS) in 2014, which was first adopted by BitShares. Later, other
cryptocurrencies like Lisk and EOS also used DPoS.
In DPoS, nodes vote
for a number Fixed delegates (or witnesses), who participate in the consensus
process and secure the network. The voting power of each node (or stakeholder)
is proportional to the number of coins it has. Voting rewards are usually
collected by delegates and shared proportionally with theirs respective voters.
If an elected node engages in fraudulent behavior, it is immediately kicked out
and replaced by another.
DPoS distributes tasks
between nodes and delegates. Since ordinary nodes participate only in the block
validator election process, transaction times depend only on the performance of
the delegates and not on ordinary nodes. Delegates are either motivated to
remain honest or they are rejected, which is supposed to add to the overall
security of the network.
Another popular
variant of PoS is Leased Proof-of-Stake (LPoS), which was developed in 2017.
LPoS allows nodes to rent their coins to mini ng nodes, which validate blocks
and earn rewards. Mining nodes must wager a minimum number of coins. The rented
rooms are locked.stored in the user's account,
and are not physically
transferred to the minor. As in other cases, the higher the amount of coins
rented from a miner, the higher their chances of winning bulk rewards. Waves
was the first project to use LPoS.
Since miners must be
online 24/7, every user might not be interested in running a node mining. By
allowing users to lease their parts for mining, more nodes can be involved in
the overall governance of the network. This increases the degree of
decentralization of the network, although it also entails the risk of the
formation of mining pools.
Enter SPoS
Supernode
Proof-of-Stake (SPoS) is the latest in algorithmPoS-based consensus ithms. It
is the brainchild of Sunny King, the creator of PoS himself, and was announced
to the public in January 2019. While it retains the fundamentals of PoS (and
some of its derivatives), What sets SPoS apart is that it focuses more on
hardware upgrades than protocol enhancements.
The SPoS protocol
itself requires the supernode hardware to be upgraded as the performance of the
blockchain requires. By rem Due to the dependence on ordinary nodes, SPoS
claims that constant network performance can be guaranteed even under heavy
traffic. V SYSTEMS is the first project to have implemented SPoS.
Ordinary nodes can
still participate in the governance of the network by leasing their coins to
these supernodes, who distribute the hit rewards proportionally among the pi
ownersgot real. The rooms can be rented without giving up their ownership
thanks to the technique of Cold Staking. Each user has 2 keys - the typing key,
which remains online and allows the coin mechanism to sign newly minted blocks;
and the expense key, which is securely held offline, actually “owns” the
participation.
Stake owners can also
transfer or spend their staked coins whenever they want, encouraging more nodes
to stake coins. In principle, this is similar to LPoS, although LPoS does not
impose any restrictions on the choice of hardware for mining nodes.
SPoS also supports a
new part staking mechanism called Staking 2.0. In ordinary PoS, by staking
coins on the network, nodes earn the native coin of the network as rewards (for
example, Neo staking allows users toisators to win NeoGas). In Staking 2.0, not
only will supernodes win the native blockchain coin, but all
blockchain-supported tokens (for example, VSYS staking will allow users to earn
both VSYS and IPX from now on). Supernodes are then expected to distribute them
all among the stake owners.
Concerns about
decentralization
Despite attempts by
SPoS for greater decentralization through Staking2.0, it There are concerns
about inherently present trends. Compared to Bitcoin or Ethereum which have
thousands With minor nodes around the world participating in the consensus, the
governance of SPoS is requisitioned by a handful of supernodes.
The owners of the
picketswould naturally tend to rent parts from supernodes with a higher rental
rate. This would lead to the tendency to create strike pools, and if a
supernode ends up assimilating the majority of the coins involved, it can
compromise the security of the network as a whole.
With more rooms
rented, the rental rate of a supernode would drop automatically, thus ensuring
that a balance is maintained and no supernode ends up becoming a player
dominant in the ecosystem.
Unfortunately, that
still doesn't stop the rogue supernodes from ganging up and trying to take over
the network. I had the opportunity to express this doubt to Jacob Gadikian , a
blockchain technologist who was part of the SPoS development team
.
According to Jacob, in
order to launch such an attack, the supernode (s) should first acquire a
sufficient amount of stake. They can earn it by buying the coins on exchanges
or by using social marketing skills.
to convince users to
rent coins from them.
In the first case,
buying such a large amount of coins would drive up the price of the coin,
making the attack financially impractical (similar to the argument for Bitcoin)
.And in the second case, they would no longer be red supernodes, but rather
ecosystem partners chosen by stakeholders e
Thoughts of
separation
PoS was an attempt to
provide the same security and decentralization as PoW, but at lower cost SPoS
further attempts to improve network performance, shifting the focus from
updating the algorithm to upgrading.material day
. In the process, they
seem to have been more flexible on decentralization. After all, no project has
really been able to solve the blockchain trilemma.
Having said that, even
PoW is not a guarantee against network attacks. Earlier this year, one of the
best -20 ETC (Ethereum Classic) market cap coins have fallen
prey at 51% to nail.
It continued for 3 days, resulting in losses in the order of $ 1.1 million.
SPoS takes a different approach compared to other variants of PoS
, and it is still in
its infancy. It is only after a sufficient amount of time and a decent number
of projects have adopted SPoS that we will be able to tell if King's second
child has been able to outperform his firstborn.
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