Downsides of Proof-of-Work and Proof-of-Stake, explained.
- What are the most common kinds of nodes?
Proof-of-Work and Proof-of-Stake are two of the most well-known consensus techniques, although new ones are constantly being developed.
PoW blockchains have long dominated the cryptocurrency world, powering both Bitcoin and Ethereum. This implies that miners are in charge of safeguarding the network and verifying transactions, for which they are paid with new currency.
However, one major complaint leveled against Proof-of-Work blockchains is the amount of energy they use and the environmental effect they have. Miners must solve random mathematical problems using massive amounts of processing power. As the sector evolved, more complex gear became necessary, and power consumption increased as well.
As a result, Proof-of-Stake is seen as a more environmentally responsible strategy. Validators – nodes with a financial interest in the network’s smooth operation — take the role of miners. While proponents say it uses 99% less energy than PoW, others are concerned that PoS would lead to more centralization and censorship. During The Merge, Ethereum is in the process of transitioning to this consensus method, and it will be fascinating to observe how this high-stakes experiment turns out.
A novel technique is known as Published Proof-of-Contribution, or PPoC for short. Every player in this ecosystem has a duty to play in ensuring the ecosystem is decentralized, democratic, and well-governed.
- How effective are these processes of consensus?
Gas expenses, block confirmation times, and scalability are all methods to gauge this.
Each of these three elements is critical to the success of a blockchain. Proof-of-Work blockchains often see gas prices surge during bull markets, implying that it costs more to execute a transaction in a timely manner.
Blocks in PoW may often take up to 10 minutes to complete, although this can vary depending on mining difficulty. According to Ethereum, PoS provides a higher level of assurance and a defined pace, with a validator picked at random to generate a new block every 12 seconds.
With both of these blockchains, there may be concerns that individuals with the greatest mining gear — or the most crypto staked — may wind up dominating the block rewards. PPoC techniques handle this by mining blocks every two seconds and rewarding every node equally. In principle, this implies that each member is constantly motivated for their contribution to the network.
- What are the current stumbling blocks to verifying transactions?
The obstacles to entry might be rather high whenever you are engaged in PoW or PoS.
As previously said, being a productive Bitcoin miner is a difficult task. There is fierce rivalry from massive farms with tremendous resources, and getting your hands on the newest technology may be costly. Furthermore, with the cost of power growing in many areas of the globe and block rewards half every four years, there’s a genuine risk you’ll wind up paying more than you earn.
Proof-of-Stake presents a unique set of problems. Ethereum’s new network needs validator nodes to stake 32 ETH — and considering that this is worth tens of thousands of dollars, this is an expenditure that many average customers will be unable to afford. These payments may also be reduced if technological concerns force you to behave against the network’s best interests. While it is feasible to obtain exposure to staking rewards for less money, doing so requires you to rely on centralized providers.
However, various ways are possible. Some blockchain networks combine masternodes maintained by recognized companies with validator nodes shared by all wallet users. Their interests are protected here by a node representative who has been verified through the PPoC mechanism. The fact that average users won’t have to worry about the technological complexities of keeping a blockchain working smoothly means that they’ll still be encouraged to stake.
- How might PPoC help ordinary users?
Aside from staking, blockchains that employ PPoC may make utilizing cryptocurrency as a daily payment method much more feasible.
It may be infuriating to have to wait for many confirmations before receiving payments on Proof-of-Work blockchains, not least since the value of this transaction might vary substantially in such a short amount of time due to the volatility of cryptocurrency.
And, when a transaction must be completed quickly, determining the appropriate gas cost might be a guessing game. Too little, and miners may abandon your transaction in a mempool to concentrate on more lucrative ones. Too much, and you’re squandering wealth by going overboard.
Blockchain networks that employ PPoC, such as Eurus, assist address both of these drawbacks by guaranteeing transactions are completed within two seconds — and there are no miners’ threshold variables to consider. Another advantage is the ability to execute cross-chain transactions, as well as a cutting-edge block search engine that provides much-needed transparency.
- How does Eurus operate exactly?
This is a Layer 1 blockchain built on sidechain technology, with an interoperable bridge protocol capable of connecting the Eurus mainnet to Ethereum or other networks.
The inventors of Eurus claim their objective is to enable speedier crypto transactions and payments, ensuring key blockchains can connect with one another, and address some of the main network’s typical flaws, such as poor transaction speeds and expensive gas prices.
This is expected to be critical in overcoming the major barriers to cryptocurrency widespread acceptance, all while providing the public with an opportunity to participate in a passionate, fair, and transparent community.