Which Crypto is Winning in The Race to PoS Mechanism?
The first digital currency to be introduced, Bitcoin, introduced a new consensus called proof of work, which aimed to secure the network. A miner does a lot of work(arithmetic calculation) and shows proof in proof of work. However, this system has many problems like high electricity costs. Therefore, it launched a new consensus PoS.
Proof of Stake(PoS), introduced in 2012, allows a user to collateralize some assets to validate and release blocks. Since then, several cryptos have their versions of PoS. This guide will look into 4 of such Cryptos, starting with Cardano.
Cardano(ADA) is the crypto with the most advanced PoS mechanism, implanting many features to help secure the network. This network introduced a mechanism called Ouroboros, which integrates special features of PoW and PoS.
Ouroboros is not a hybrid of PoW and PoS; it only takes some unique features in PoW, like security. Ouroboros uses mathematical verification and technology models used in PoW; only these consume fewer amounts of power. Moreover, Ouroboros implants behavioral psychology and economic philosophy for utter security.
The Ouroboros divides the chains into epochs, later broken into time slots, with a slot leader selected for each. The selected slot leader adds new blocks into the blockchain. To protect the network, Ouroboros delays settlements of some transient blocks.
It did this Cardano PoS upgrade in 2020, and ever since then, the network is still upgrading. In the race for a more robust, more advanced POS network, Cardano is already taking the first spot.
In nominated proof of stake, the validators in the network are selected by the network and allowed to operate the entire system. The selection of validators is a process that ensures the network is controlled by a new lot of 20-100 people every day.
What is interesting about the Polkadot PoS mechanism is the inclusion of the nominator task. A nominator provides a list of their most trusted, favorite validators for the Polkadot network. Like validators, a nominator must back their list by collateralizing some amount of DOT tokens.
The two roles, nominator and validator, are critical in powering the Polkadot network. The inclusion of a nominator makes Polkadot be in the race for the top PoS network.
Tron(TRX) is another one of the well-performing crypto using the concept of advanced PoS. It uses an option called the Delegated PoS, which, unlike the usual POS, involves delegating work to a set of selected people.
In Tron, there are votes which select the validators, usually called super representatives. The network has only 27 super representatives per time, who will earn the validation rewards. However, a small group of assistants is called super representative partners. These partners are those who took position 28-127 of the vote.
The super representative partners, together with super representatives, will receive voting rewards. The token holders vote for the next group of SR, who will complete the tasks given. In delegated PoS, the number of coins matters; thus, a person holding more coins has more shares of votes.
The idea of delegated PoS is excellent; the selected few witnesses(delegates) have pressure to perform their tasks well. However, it’s criticized because it leads to a lack of decentralization in the networks. Only the select few power the network, meaning they can manipulate the prices.
Tron seems more advanced because of the inclusion of the partners. The platform changes the validators several times every day to reduce the idea of a small group controlling the network.
QTUM is another network with advanced POS staking algorithms, proving the best POS center in crypto and services. It has a new innovative consensus system called the Mutualized proof of stake consensus(MPoS).
The MPoS is an advanced POS 3.0, where users stake their coins and earn by staking. Every coin holder has the chance of competing for validation, and the network randomly selects the validators.
In earlier PoS versions, the main thing considered was the length of stake, with the longer staked coins earning more rewards. In MPoS, the focus is on the value of the stake; thus, a validator with more stakes gets more rewards.
Almost all PoS versions and upgrades can easily suffer from junk contract attacks. However, the QTUM PoS system delays rewarding, only paying 10% in an instant and giving the remaining 90% after the passing of 500 blocks. Therefore, the cost of launching junk contracts is high, discouraging the users from such illegality.
The PoS Consensus Race
The simplest answer to the question is Cardano. The network researched the concept of proof of stake and later introduced an advanced system called Ouroboros. Cardano’s team has also been working very hard to develop better algorithms for better results in consensus. Therefore, Cardano takes the first spot in the most advanced PoS algorithms.
However, other coins are working very hard to provide excellent results, including Dot, Tron, and Qtum. Each of the three coins and their blockchain uses an advanced PoS mechanism like DPos, NPoS, and MPoS. The recently introduced Binance smart chain also has an excellent PoS consensus called proof of stake authority.