As expected, since we published Crypto TREND we have received many questions from readers. In this issue we will answer the most famous ones.
What kind of change is coming that could be a game changer in the cryptocurrency?
One of the major changes that could affect the cryptocurrency world is another proven method called Proof of Stake (PoS). We will continue to strive for this definition, but it is important that we understand the difference and why it is important.
Keep in mind that digital startup technology is called a blockchain and most recent digital currencies use a proven protocol called Proof of Work (PoW).
With traditional payment methods, you must trust someone else, such as a Visa, Interact, or bank, or a check house in order to sell. These trustworthy organizations “stay in the middle”, meaning they keep their personal records that keep track of the history and activities of each account. He shows you the scene, and you have to agree that it is right, or start an argument. They are the only ones in the audience who can see it.
With Bitcoin and many other digital currencies, these transactions are “decentralized”, meaning that everyone on the network receives them, so no one should rely on anyone else, like a bank, because everyone can guarantee authenticity. This process of validation is called a “shared agreement.”
PoW requires that a “task” be performed to confirm a new blockchain entry function. With cryptocurrensets, authentication is done by “miners”, who have to deal with complex issues. With more and more algorithmic problems, these “miners” need more expensive and powerful computers to solve the problems that lie ahead of everyone else. “Mining” computers are often unique, especially using ASIC (Application Specific Integrated Circuits) chips, which are smart and quick to solve these complex puzzles.
- Actions are grouped together in a ‘block’.
- The miners verify that the events in each category are valid in tackling the algorithm problem, called “evidence of labor problems”.
- The first mine to deal with “evidence of working problems” is given less money.
- Once verified, the event is stored in a public blockchain on all networks.
- The more incidents and miners work, the more complex the problem-solving process is.
While PoW helped find a blockchain and put down money, unreliable digital investments on the ground, have some real shortcomings, especially with the amount of electricity that miners use to try to tackle “evidence of labor problems” as quickly as possible. According to Digiconomist’s Bitcoin Energy Consumption Index, miners of Bitcoin are using more energy than 159 countries, including Ireland. As the price of Bitcoin increases, more and more people try to deal with these problems, wasting a lot of energy.
All this use of force to verify the situation has prompted many in the digital community to look for another way to validate blocks, and their competitor is a method called “Proof of Stake” (PoS).
PoS is still an algorithm, and its purpose is the same as proof of performance, but the way to achieve that goal is different. With PoS, there are no miners, but instead we have “legitimate ones.” PoS relies on reliance and awareness that all observers have a blind spot in the game.
In this way, instead of using force in responding to PoW puzzles, the PoS agent simply strives to confirm the amount of events that reflect his or her identity. For example, registrars with 3% of Ether available can guarantee 3% of the circuits.
In PoW, your chances of finding evidence of a workplace problem depend on the amount of power you have on the computer. With PoS, it depends on how much money you have in the “value”. The longer the price you have, the higher your chances of dealing with it. Instead of winning the crypto currency, the winner received a prize.
Applicants enter their value by ‘closing’ the portion of their tokens. If they attempt to do harm to the network, such as creating a ‘blockchain’, their share or security will be compromised. If they do their work without violating the network, but do not win the right to secure the site, they will be reimbursed or reimbursed.
If you understand the big difference between PoW and PoS, then all you need to know. Only those who are planning to become a miner or a certified person should understand all of these two legitimate approaches. Most people who want to own cryptocurrensets simply buy them in exchange, without having to engage in real mining or confirming transactions.
Many members of the crypto community believe that in order for digital currencies to be viable, digital tokens need to be exchanged with a PoS format. At the time of writing, Ethereum is the second largest currency behind Bitcoin and their development team has been working on their PoS algorithm called “Casper” for the past few years. We look forward to seeing Casper launch in 2018, putting Ethereum ahead of all other big money.
As we’ve already seen in this section, major developments such as Casper’s successful implementation could send Ethereum prices significantly. We will keep you updated on the future of Crypto TREND.