Blockchain Will Drive Future Technological Advances
We are in an age where emerging technologies are the main drivers of innovations and new economic opportunities. The past decade has been interesting especially with the emergence of open-source technological development; decentralized ledger technology has grown sharply to become a strong contender for the technology of the decade with the potential to power future systems.
Some technology experts opine that the core internet services will be redesigned in the not too distant future, and this will most probably be powered by decentralized cryptocurrency networks.
Cryptocurrency networks, popularly called blockchains, are community-oriented, and are built on the philosophy of decentralization in which authority and network functions are greatly distributed among the synchronized nodes which maintain the network. It is expected that blockchains such as Bitcoin, Ethereum, EDC blockchain and others will scale beyond the capabilities of the most advanced centralized technology and usher the world to a new level of innovation.
Blockchain Consensus Mechanisms
Every blockchain is governed by a mechanism - consensus mechanism, which enables nodes to agree on which chain of blocks is valid and should be added to the blockchain. There are several ways of achieving consensus on the blockchain; however, the most widely used consensus mechanism is the Proof-of-Work (PoW). The PoW protocol is a mechanism that requires that a difficult computer calculation be done in order to create a new valid block. This task of solving complex mathematical problems is called mining. It is the method adopted by Bitcoin and about three-quarters of existing cryptonetworks today. Other consensus protocols include the fast rising proof-of-stake (PoS) and its variants, proof-of-capacity, proof-of-elapsed-time (POET), and so on.
PoW is basically mining and it incentivizes miners to maintain network security and services. Classic mining however is highly competitive as only the miner that first solves the puzzle is rewarded with a newly minted digital currency. The computing power required for this is tremendous, therefore miners have to buy specialized mining rigs such as graphics processing unit (GPU) and application-specific integrated circuit (ASIC), with massive hash rate purposely built for such difficult tasks.
Apart from this, classic mining consumes tremendous amount of energy. An online tool developed by the University of Cambridge called Cambridge Bitcoin Electricity Consumption Index (CBECI), tracked the energy consumption of bitcoin mining and estimated it as over 7 gigawatts (GW) of electricity which equates to about 64 terrawatt hours (TWh) of energy usage. This value is comparable to the energy use of the entire nation of Switzerland. The huge carbon footprint due to this energy consumption is colossal and is a growing source of concern to climate experts. The direct and indirect costs due to classic mining is massive and not cost-efficient in the long run.
These downsides have led to the consideration and rise of alternative consensus mechanisms that are more energy efficient, sustainable, secure, and community-oriented.
The toast of the community is the proof-of-stake (PoS) consensus mechanism.
The PoS Mechanism Ready to Take Over
In the proof-of-stake model, the blockchain is maintained by a network of decentralized nodes who act as validators, rather than miners as in PoW. The nodes deposit a given amount of coins, a process called staking, which cannot be spent. The node that validates a new block is randomly selected just like a lottery system, but by a consensus algorithm. So the higher the coins staked by a node, the better its winning chances. Unlike in PoW blockchain where a new coin is minted and awarded to the winning miner, PoS-based blockchains do not issue new coins rather the node that validates the transaction receives the transaction fees for that transaction as reward.
Compared to classic mining, PoS does not require massive computing power and therefore has low appetite for electricity. PoS can safely be said to be cost and energy efficient, and thus better than PoW. This explains the reason why the blockchain industry is gravitating towards proof-of-stake (PoS) consensus model. As an example, the Ethereum blockchain is planning to switch from PoW to proof-of-stake (PoS).
The downside of regular PoS is that small coin holders would be unable to participate because of the relatively high number of coins needed to be staked to become a master node. It therefore means that network security is left in the hands of a smaller population of the community with the financial means to afford the minimum coins to be staked.
Since network security gets better and more decentralized when the number of participants is higher, the PoS mechanism has been improved on to accommodate and incentivize small holders.
PoS is Good But LPoS is Better
An improved and inclusive consensus model of this nature is the Leased Proof-of-Stake (LPoS) mechanism. The LPoS operates same way as PoS, but employs leasing to enable small holders participate in the network and get incentivize. The small holding nodes lease their coins to a main staking node but the leased coins are still completely within the control of the holder. Leased coins improve the chances of the staking node being picked to validate and add transactions to a block. The transaction fees collected by the staking node is shared with the small leasing nodes based on the amount leased.
This is the approach taken by EDC blockchain.
EDC Blockchain Migrates To LPoS Consensus Mechanism
EDC blockchain, a robust blockchain based on Graphene technology boasting of 100,000 TPS, has adopted the leased proof-of-stake mechanism that enables every user, whether heavy EDC holders or small holders, to participate in keeping the blockchain secure and operational. With the LPoS, EDC further democratize their blockchain and promotes fair right and status for all enabling anyone to become a "miner".
The process involved is simple, users would only have to lease EDC from their personal wallet to their preferred master node by clicking "lease", choosing the leasing period convenient for them, and agreeing to the terms.
Never has "mining" been that easy!
The benefits of EDC Blockchain's LPoS
Enhanced Network Security of EDC Blockchain
Because blockchain is a distributed network, it is very difficult for its security to be compromised except a rogue node has 51% hash rate or staked coins for PoW or PoS respectively. With the PoS model, it is highly expensive for a single uto accumulate 51% of total supply (TS) of any coin. Moreover, it is economically suicidal for any node with a 51% of the TS to breach the network as it could cause the Coin value to plummet.
LPoS mechanism makes the network more secure as the coins are held by numerous users making it difficult for a single attacker to acquire and control the tokens required to launch a 51% attack on the network.
More Decentralization Entrenched
A network with fewer miners or participants risks instability and security attacks as only few big players actively partake in the network leading to some sort of centralization. However, a network with thousands of distributed nodes, especially like the LPoS model, where even small holders can partake in the network is more decentralized and would be more secure.
This way, EDC blockchain accommodates all users thus making the network more decentralized.
Reward Sharing For All Participants
One of the key benefits of the LPoS is that small holders will also share in the transaction fees earned by the master nodes to which they donated their coins to. In the EDC ecosystem, master nodes divide the transaction fees based on the amount of EDC contributed by participating holders, and distribute it according to terms and plan selected. The leasing period could be 3 months, 6 months or 1 year.
CONCLUSION
The criticisms and controversies created by PoW algorithm (classic mining) have triggered increased adoption of alternative consensus mechanisms that are more efficient in terms of energy and sustainable for the future. The LPoS in the blockchain industry is relatively new and EDC blockchain happens to be one of the few blockchains to have implemented it.
PoW miners may not own or hold the coins they are mining but LPoS validators are stakeholders of the coins they are mining. EDC blockchain LPoS thus creates a win-win situation for all as small holders can now be called true stakeholders of the network.
To lease your EDC coins now and mine with master nodes on EDC Blockchain, click here
Links for Additional Information
To know more about EDC Blockchain and any of its services, check the following official links:
EDC website: https://blockchain.mn/
Twitter: https://twitter.com/EDCBlockchain
Author's Bitcointalk Profile Link: https://bitcointalk.org/index.php?action=profile;u=1418203