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Guide: "The article will start from the blockchain consensus. From the beginning of Bitcoin PoW in 2008 to the present, what are the consensuses that are currently blooming? Next, I will tell you what is the main axis of this series, Proof of Stake (equity proof mechanism)? PoS’s description of this consensus, as well as the views of the founder of Ethereum V God, Ethereum decided to transform PoS in the future at the very beginning of the white paper, and finally presented the future trend of PoS with charts and data. Welcome everyone to learn this series with us In the future, when you see the relevant knowledge points, you can talk with others.”
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Chapter 1 PoS Introduction
1.1. What is blockchain consensus
The blockchain is formed by linking blocks one by one. Each new block generation (including transaction records) needs to be jointly confirmed by validators. This process of common confirmation is the blockchain consensus. From the development of the blockchain in 2009 to the present, a variety of consensuses have evolved, and different consensuses have solved problems in operation such as attacks, cheating, delay, consistency, and finality in different ways.
As of 2018, mainstream consensus algorithms include PoW (Proof of Work), PoS (Proof of Stake), BFT (Byzantine Fault Tolerant Mechanism), hybrid consensus, etc., and some evolved from the mainstream Consensus algorithms, such as PoA (Proof of Authorization authorization certification mechanism), PoI (Proof of Importance importance certification mechanism), DPoS (Delegate Proof of Stake equity certification mechanism), PBFT (Practical Byzantine Fault Tolerance uses Byzantine fault tolerance algorithm), etc., A hundred schools of thought contend, and a hundred flowers bloom.
Among them, among the mainstream algorithms, PoS should be the protagonist in the current mainstream. PoS is developed on the basis of PoW, and is even more respected in today's blockchain consensus world. During the period from 2014 to 2017, blockchains based on the PoS consensus gradually increased, and even Ethereum, which has maintained the second largest market value for a long time, plans to switch from PoW to PoS. In 2019, these PoS-based public chains will be launched on the mainnet. At that time, we will see a new generation of PoS public chains standing in the center of the stage for people to examine.
In this chapter, we will give a brief overview of the origin and development of the PoS consensus algorithm.
1.2. What is PoS-Stake Proof Mechanism Consensus
PoS (Proof of Stake) - equity certification mechanism, a mainstream blockchain consensus algorithm, the purpose is to allow distributed nodes in the blockchain to reach a consensus, it is often the same as PoW (Proof of Work) - workload The proof mechanism appeared together, and both are considered to be one of the mainstream algorithms in the blockchain consensus algorithm.
PoW was born and applied to Bitcoin in 2009, PoS was proposed in 2011, and Peercoin, the first currency to apply this algorithm, was born in 2012. As a latecomer, PoS draws on many PoW designs at the consensus level, such as block design, miner selection, fork processing, transaction verification, etc. Many improvements to consensus have a lot to do with the bottom layer of the blockchain. PoS has done a lot The improved settings to meet the proof-of-stake-based mechanism can be said to take the best of it and discard the dross.
Proof of stake (PoS) is a type of algorithm by which a cryptocurrency blockchain network aims to achieve distributed consensus.
Regarding the definition of PoS, Wikipedia defines it as: an algorithm designed to enable a distributed consensus in a cryptocurrency blockchain network
I'm wondering if as bitcoins become more widely distributed, whether a transition from a proof of work based system to a proof of stake one might happen. What I mean by proof of stake is that instead of your "vote" on the accepted transaction history being weighted by the share of computing resources you bring to the network, it's weighted by the number of bitcoins you can prove you own, using your private keys.
In the records, the earliest proposer of PoS in 2011 described PoS as follows: I am thinking that if Bitcoin is more widely used, then a transaction based on the PoW system may be verified by the PoS system. Proof replaced. What I mean is that the PoS-proof of stake mechanism is to use the number of bitcoins you can prove with your private key as the weight to replace the computing power weight you bring to the bitcoin network, and to "vote" the transaction history to prove it.
In a PoS system, a blockchain appends and agrees on new blocks through a process where anyone who holds coins inside of the system can participate, and the influence an agent has is proportional to the number of coins (or ‘stake’) it holds. This is a vastly more efficient alternative to PoW‘mining’ and enables blockchains to operate without mining’s high hardware and electricity costs.
Vitalik Burtain, the founder of Ethereum, is also an advocate of PoS. He defined PoS in his "Casper the Friendly Finality Gadget" blog: In a PoS system, new blocks of the blockchain are generated through the currency holdings in the system. People, or an influential currency holding institution participated in the agreement. This is more efficient than PoW mining, does not require high-performance hardware, and does not require electricity.
Based on the above definition, we should have a general understanding of PoS: it is an algorithm that reaches a consensus through the consent of the holders, and the purpose is to determine a new block. Compared with PoW, this process does not require hardware and electricity. , and is more efficient.
The PoS consensus introduces the concept of Stake. Token holders stake their tokens and then get the chance to produce a block. In the PoS consensus, an election algorithm will be used to select miners for the block according to the proportion of their holdings. The miners complete the packaging transaction at the specified height, generate a new block, and broadcast the block. The broadcast block passes through another "threshold" in the PoS consensus, and the verifier verifies the transaction. After passing the verification, the block is confirmed. Such a round of PoS consensus process is completed.
There are many nodes in the distributed network. This node is the Stake mentioned above. What the PoS consensus guarantees is that the system is safe enough that it will not be damaged by outsiders, and it will run independently and stably. There are many issues that need to be considered, and I will explain these issues to you in the following chapters.
1.3. Trend of PoS consensus
Many of the top 50 currencies by market capitalization were developed from the Bitcoin era, so we see that the current proportion is more based on PoW consensus currencies, but this includes many forked currencies with similar functions , For example, there are as many as five forks of BTC, Bitcoin cash, Bitcoin SV, Bitcoin Gold, etc., and forks on ETH; there are also Ethereum and Ethereum Classic for Ethereum Ethereum Classic (and forks are likely to continue). If the duplicate currencies are removed, the proportions of PoS and PoW will be closer.
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Figure 1 Consensus classification of the top 50 coins by market capitalization
2017 is the first year of ICO (Initial Coin Offering) and also the first year when a large number of public chains exploded. A total of 876 currencies have been ICO, with a total fundraising balance of 6.2 billion US dollars.
Overall, the trend is obvious. In the next 10 years, PoW will tend to decrease, and PoS will tend to increase.
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In 2018, due to the overall encrypted digital token entering the bear market, many ICO projects did not receive good financing. In addition, the public chain project track was already relatively crowded, and the project party could not raise money, so naturally the attention was reduced a lot. However, there are also new PoS projects emerging, such as the Turing Award winner Sivio Micali's Algorand, which is based on the PoS consensus project. Figure 3 below shows the financing situation in 2018.
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