The first generation of cryptocurrency bitcoin, which brought the necessary changes to our world, and the proof of work (PoW) mechanism behind it, also created today's giant – Bitland.
With the development of the cryptocurrency world, more and more people are paying attention to the Proof of Rights (PoS) currency. Although this consensus mechanism introduces new attack vectors, its demand for energy consumption is almost negligible. In addition, its scalability is better than PoW, so it is gaining more and more recognition.
The mechanism of PoS means that the more tokens you have, the more likely you are to get new block rewards. In the early days of PoS, the overall size of the cryptocurrency market was smaller and the top ranked currencies. Both are PoW currencies, and as a result, the Staking service (also known as the PoS pool) does not have many opportunities.
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And as the PoS currency becomes more mature (including Ethereum also plans to transform into PoS in the future), ignoring this market has clearly become unwise.
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What is the Staking service (PoS pool)?
The focus of the Staking service (PoS pool) is to bring together the benefits and then carry out the Stake process. In general, the larger the PoS pool, the greater the probability that it will be selected to verify a block.
We can give an example:
Alice has 10,000 PoS currencies (one hundred thousandth of the total), and she doesn't want to mortgage the money to others, but she does solo verification. Now, when a block needs to be verified, the blockchain will try to find the most suitable investment wallet for verification. In this case, the possibility of Alice being selected is very small.
Bob, he also has 10,000 PoS currencies (one hundred thousandth of the total), and he understands the Staking service (PoS pool), he mortgaged his own currency to a PoS pool. Since this PoS pool has a higher number of tokens than other wallets or mines, it is likely to be rewarded by the selected block.
By participating in the PoS pool, Bob will have a higher chance of making a profit, and then the block reward will be allocated to the pool participants, and the pool service provider may charge a certain percentage of the reward as a service fee.
In general, the PoS pool and the PoW pool are very similar, but there are also differences. For example, the PoW pool is a computing power, while the PoS pool is a pooled token.
The Staking service will introduce more attacks, will it be safe?
Since the Stake process requires the wallet to maintain a connection with the network, and investors need to pledge their rights to the PoS pool, the issue of the attack is clearly the biggest threat to the PoS pool. In many ways, today's The situation of the three-way PoS pool is very similar to that of the early Bitcoin exchanges. All the bad things happening on the Bitcoin exchange (from hacking, server crashes, to fraud) are likely to be on the PoS pool. occur.
In contrast, the threat of attack on the PoW pool is much smaller (because the power is separated from the currency).
Recently, we have seen that Coinbase, the leading company of the exchange, also announced its support for the Staking service . It is worth noting that it claims to deposit the client’s mortgage funds into the cold wallet and then take the funds with their own funds. The possibility of hacking is minimized, and the problem of stolen customer funds is minimized. However, due to its high cost, the fees charged are relatively high. According to the Tezos project, Coinbase has charged almost half of the block rewards, but it does not rule out that it will be adjusted according to different projects.
And if you choose a bad PoS pool, it probably means that your funds will go back, which may be because the operator is fraudulent or the security procedures it writes are bad.
PoS pools not only have security problems, they also face regulatory issues.
Regulators are only now beginning to apply monetary services business rules to exchanges and PoW pools, and the emergence of PoS pools will be on the radar of regulators, which will be an open question.
Since this area is still gray, it is not necessary for the staking pool to require the mortgagee to provide identification. Organizations like Coinbase that maintain close contact with the regulators should take relevant measures.
Who will become the bit continent of the PoS era?
After talking about the above, we should understand that the PoS pool will be a big market, but the more security challenges it faces mean that if we don't pick a good pool, we may lose a lot of money. .
Then, the focus is on, which PoS pools will be relatively safe, and which ones may become the bit continent of the PoS era?
First, we should try not to select those teams that do not have the experience of PoW mining or exchanges. According to the above analysis, we can see that the PoS mine pool will be more difficult to operate than the PoW mine pool, and the challenge is more like Exchange.
Therefore, from a safety point of view, the first thing we should aim at is the major exchanges on the market (such as Coinbase, Firecoin, etc.) and several larger PoW pools.
It is foreseeable that in the next period of time, major exchanges are likely to launch similar take-up services, and the espresso pool like Bitcoin, which was previously launched, can also be regarded as a PoS-like pool. It’s no surprise that these PoW giants are involved in the PoS space.
In addition, the Spark Pool, which has been explicitly involved in the Cosmos project, and the MATPool, which has been involved in several PoS projects by Babbitt, are also intensifying their layout.
And such wallets as Cobo, their cloud wallet is more like a banking function, which helps mortgage users to take a take and get the corresponding block reward.
Next, we can look at Staking service startups that are already on the market and funded by well-known investment institutions. For example, Staked, a mortgage-as-a-service company founded in April 2018, acquired Pantera Capital and Coinbase Ventures earlier this year. The $4.5 million seed round financing of well-known investment institutions such as Digital Currency Group and Winklevoss Capital.
In general, the current staking service (PoS pool) requires participants to trust the project side. Therefore, the project side that has a reputation in the industry is relatively more trustworthy and more likely to be in the PoS era. Occupy a territory, and in this regard, the exchange has a great advantage.