News for Ethereum: PoW vs. PoS - The differences in short
Ethereum plans to move from a Proof of Work-based validation mechanism to one based on Proof of Stake: here are the differences.First of all, for Proof of Work (PoW) and Proof of Stake (PoS) we mean the validation mechanism for the various blockchain blocks. Each block in the chain then contains information about the most recent transactions and is based on mining activity.Mining complies with two functions:verify the legitimacy of the transactions:
"Remunerating" the Miners for having provided their computational capability in the validation of transactions.
The main characteristic of blockchains is the constant increase in the complexity of the algorithms that make up the blocks, which because of this require more and more resources to be solved (computing power and electricity in essence).At this point the reasoning leads us to reflect on this aspect: at a point where the computing power is concentrated in the hands of a Miner, a system based on the PoW mechanism would become susceptible to the so-called "51% Attack". This problem / attack arises when a Miner, or more plausibly a Pool (group) of Miners, gets to own 51% of the computing power of the network, and can thus decide which transactions to declare valid and which not, but also to spend two sometimes a virtual currency.The new Proof of Stake validation system aims to combat this eventuality.Through this mechanism validation will no longer be carried out through the calculation capacity, but rather the amount of crypto-currency that one has: the greater the amount of virtual currency held, the greater the number of blocks that can occur.Be careful though. The PoS system allows to link the success of a transaction to a guarantee deposit, called "collateral" in English. To be more precise, the person who decides to become Miner in a PoS system decides to freeze a certain amount of virtual coins to allow the verification of certain transactions.
This fixed asset therefore remains as a guarantee of the success of the transaction.Another peculiarity lies in the fact that it is possible to be chosen among the users available in the blockchain in a pseudo-random manner (based on how many Ethers they possess compared to the total number available) to certify a specific transaction. This is a good thing because the Miners, in a PoS system, will receive commissions for having lent their "monetary base" to carry out the task of validating the blocks. This policy also provides that there will be penalties for those who were to be found off-line after having given their availability.In addition, the purpose of the PoS consent process is to "finalize" key blocks called "checkpoints".
Every 100 blocks there is a checkpoint. In order to complete a block, a subset of validators in the active pool of validators, with a total size of at least two thirds of the total size of the active pool, must send "commit" messages to that checkpoint. Once a block is finalized, the theory predicts that "we can never go back"; even if 99% of Miners will start to support a chain that will not contain that block, clients will continue to accept this block.To conclude, the PoS validity test is therefore based on the quantity of money rather than on the calculation capacity. The "51% Attack" how is it dealt with then? For the theory of games, if someone were to own 51% of the cryptocurrency would have every interest in maintaining efficient and secure the network where that currency is used, under penalty of the end of the network and the cancellation of the value of the currency.The PoS algorithm will be implemented gradually in Ethereum through the Casper protocol.
The Casper protocol will also be the protocol that will provide the necessary security to the new Ethereum network with PoS system through the specification of certain circumstances that would lead to a bad "validator" to lose all its coins. Moreover, another form of protection against those who could ever want to acquire 51% of Ethers is provided by the law of supply and demand: the appreciation of the currency will then act as a deterrent. Consideration: Even if POS is described like a system to solve crypto power energy or to solve hacker attack for 50% + 1% of POW, We need to check that the cost for hacking POW system is very important, It could be more cheap for an hacker to follow the right mining pow regular system to obtain more than hiw own hacking attack 51%, in this first analysis condition POS solves these problems but rich will be more rich with POS system, Who has more coins to validate transaction will become richer than others with few coins available for a transaction.We need to wait and monitoring this challenge