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Generalized Proof-of-Stake Mining in Cryptocurrencies

PoS or Proof-of-Stake is a type of algorithm by which a cryptocurrency blockchain network achieves distributed consensus. In PoS-based cryptocurrencies, the creator of the next block is chosen via various combinations of random selection and wealth or age (i.e. the stake). This article focuses on discussing Generalized Proof-of-Stake Mining in Cryptocurrencies.

What is PoS?

PoS is generally considered to be more energy efficient than Proof-of-Work (PoW) systems as there is no mining involved. Furthermore, it is thought that PoS encourages more decentralized network participation as users are not required to invest in expensive mining hardware. 
In traditional proof-of-work (PoW) mining, miners compete to solve cryptographic puzzles in order to validate transactions and add new blocks to the blockchain. The miner that solves the puzzle first is rewarded with cryptocurrency. However, PoW mining is energy intensive and can be expensive. 

However, as cryptocurrencies became more popular and their prices rose, PoW mining quickly became too expensive for individual miners to compete. Large mining pools emerged, and the vast majority of new coins were mined by a small number of entities. To level the playing field, many newer cryptocurrencies have implemented proof-of-stake (PoS) mining. PoS mining does not require expensive hardware or large amounts of electricity. Instead, miners are chosen randomly to validate blocks based on the number of coins they have staked. The result is a more decentralized mining process that is less susceptible to centralization and 51% of attacks.

What is Generalized PoS in Cryptocurrencies?

Generalized Proof-of-Stake (GPoS) is a proposed consensus algorithm for blockchains that is designed to be more energy efficient than traditional Proof-of-Work (PoW) systems. GPoS is based on the concept of “stake”, which is essentially a form of virtual currency that is used to secure the network. In order to participate in GPoS mining, users must first purchase a “stake” in the form of a virtual currency. The more stake that a user has, the more “weight” their vote will carry when it comes to deciding which blocks are added to the blockchain.

Advantages of GPoS in Cryptocurrencies

Disadvantages of GPoS in Cryptocurrencies

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