Written by: Chen Yixin
When saving money in a bank, the interest is determined by the amount and time of the deposit, as is the Proof of Stake (PoS) mechanism. PoS determines the packaging probability of mining success according to the time and number of coins.
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Compared with PoW mining, the advantages of PoS mining lower the entry barrier for investors, the interests of miners and coin holders are consistent, low latency and fast confirmation speed; but there are aspects such as privacy protection and the design of voting governance mechanism. Certain flaws.
This also leads to individual players facing many short-term behavior risks in PoS mining.
What is PoS mining?
PoS (Proof-of-Stake), in Chinese, is called the equity proof mechanism, also known as the equity proof mechanism. As the name implies, it is a consensus mechanism that determines the probability of successful mining packaging according to the age of the currency held by the user.
Coin age = total miner's pledged token duration
To some extent, the age of coins protects the interests of miners (or investors) with a low share of the currency and a long holding period, and increases the cost of manipulating the probability of manipulating the probability of packaging. .
In layman's terms, a PoS token economic ecology is like a listed company with different rights (one share does not represent one voting right), and PoS mining is like a dividend payment decision for a listed company. Each miner (currency holder) ) Is the shareholder of the listed company, the miners 'right to bookkeeping is like a voting right, the probability of a miner getting a bookkeeping right is like the share of voting rights of the shareholders (that is, the proportion of the miners' voting rights to the total voting rights), the number of miners pledged token This is the shareholding amount of the shareholders.
Depending on the size of the pledged token share, some miners are "whales" (large shareholders), and some are "small shareholders" or "minority shareholders."
PoS mining is also like storing pledged tokens in a bank, and the bank pays interest based on the length of storage and the amount deposited.
At present, digital currencies represented by EOS, Tezos, Cosmos, etc. all use PoS as a consensus mechanism, while ETH has a tendency to change from PoW (Proof-of-Work, proof of work mechanism) to PoS.
PoS mining vs. PoW mining
Advantages of PoS mining
Compared with Proof-of-Work (PoW) mining, PoS mining has the following four advantages:
- PoS does not cause a lot of power and resource consumption, is more environmentally friendly than PoW, and the user participation threshold is lower;
- Miners and coin holders have the same motivation, and there is no problem of entrusted agency, because the miners in PoS are coin holders;
- The latency can be designed to be very low, for example, EOS data throughput has reached 3000 per second;
- The PoS confirmation speed is fast, and its speed depends only on the network and network protocol, as long as more than 2/3 of the nodes are honest;
Defects of PoS mining
However, some advantages of PoS are often a double-edged sword, leading to the PoS mining mechanism still to be further improved. It mainly includes the following four points:
The public chain of PoS is generally a licensed public chain, and it does not have anonymity . The voting account and the total number of votes are known and limited, and whales (miners with a high share of pledged tokens) are prone to evil;
The cost of voting is low, and it is vulnerable to Nothing-at-Stake Attack. That is, "there is no cost to do evil, and there are infinitely many good things." The behavior of evil miners mining on multiple forks at the same time, and obtaining all mining profits at the same time;
No interest attack-get multiple forked block rewards at the same time
Voting rights can be reused and transferred (PoS has weak subjectivity), and it is susceptible to Long Range Attack . That is, the attacker creates a long blockchain to replace the longest legal chain, thereby defrauding mining revenue.
Long-range attack-replace the longest legal chain
The decision and exercise of voting rights are separate, and the two are not bound, which leads to bribery elections.
How to avoid the risks of PoS mining?
PoS mining still needs to be improved and improved, which leads to a higher risk of PoS mining. Effectively controlling the malicious behavior in PoS mining must satisfy more than 2/3 of the nodes is a major premise of honesty. Once the election is manipulated, or the elected nodes are "blackened", the revenue of PoS mining will be greatly reduced, and there will be greater risks and uncertainties.
HashKey Hub, a one-stop digital asset wallet, has designed a variety of PoS mining wealth management products such as ATOM, QTUM, EOS, IRIS and VET for the majority of users. The expected annualized return rates are 5.58%, 5.58% and 1.5%, respectively , 6.88%, 12% and 13.23%.
Not only helps you obtain the long-term value of the growth of the PoS public chain, but also helps you to avoid the risk of large fluctuations in mining revenue caused by short-term actions such as non-interested attacks, long-range attacks and election bribery.