PoS

From Minter Wiki

PoS (Proof of ownership share, Proof-of-stake) is an alternative method of achieving consensus, that emerged after PoW (Proof of Work, Proof of Work). PoS is currently one of the most popular blockchain consensus algorithms.

The PoW method requires large amount of electricity. Therefore, the POS method decided to forgo extensive use of participants computing power in favor to amount of cryptocurrency in their accounts.

The node with the largest balance has the right to create a block and get reward. The reward itself is split among participants, who have entrusted their funds to the node.

Main advantages

  • Substantial reduction in electricity consumption relative to PoW method
  • In order to create a Double-spend attack it is necessary to concentrate more than 50% the total currency amount, which requires monetary costs. If, however, an attacker can concentrate so much money, he will disturb the balance by his actions and suffer more from his own attack.

Main drawbacks

  • Motivation in funds concentration, which can lead to network centralization.

See also