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00:00 Introduction
00:13 What are consensus mechanisms?
Proof of Work and Proof of Stake are both “consensus mechanisms,” methods for maintaining the integrity of a blockchain.
Consensus is what solves the problem of "double spending". If a cryptocurrency trader were able to spend coins more than once, the entire system would be compromised and susceptible to theft.
00:52 Proof of stake
Proof of Stake is similar to Proof of Work: both are used to reach consensus and keep the underlying blockchain secure. But there is one important difference: Proof of Stake requires much less work to validate data blocks and therefore requires less energy.
In Proof of Stake, there is no race between the nodes to validate a transaction.
Instead, they now participate in a “lucky draw” with the winner determined by the blockchain itself. The winner then validates the transaction and receives a much smaller reward for using much less electricity.
02:02 How proof of stake consensus works: the details
The Proof Of Stake method selects a node as the validator of the next block using a pseudo-random election process based on a combination of parameters such as the stake age, randomization and the wealth of the node.
As the name Proof of Stake implies, nodes on a network stake a certain amount of cryptocurrency to become candidates for validating new blocks and earning the associated fees.
04:39 Proof of stake security
The stake in Proof of Stake acts as a financial incentive for the counterfeiting node to prevent validating or initiating fraudulent transactions.
05:25 Features of Proof of Stake
-Fixed number of coins:
-Transaction costs as a reward
-Impractical 51% attack
06:34 Benefits of proof of stake
-Energy efficient
-Truly decentralized
07:15 Disadvantages of proof of stake
-Oligopoly with validators
-The problem that there is nothing at stake
#proofofstake #masterclass #slance
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