Aenco X-files: What is Proof of Stake?
Proof of Stake (PoS) is a mechanism to reach consensus on the blockchain whereby transaction blocks are validated (mined) by a select few who are granted mining power by staking their coins on the network. In the Proof of Stake concept, a person can validate transaction blocks according to how many coins they hold/stake. More mining power is granted to the miner with more coins at stake.
The History of Proof of Stake
Proof of Stake was introduced as an improvement to the first consensus mechanism of blockchain which is the Proof of Work.
Bitcoin blockchain, the first blockchain invented in 2009 was programmed to allow a consensus mechanism of block validation where miners would solve very difficult mathematical puzzles needed to prove a truth. This process was called Proof of Work (PoW) and it is considered not ecologically friendly because it requires a high amount of electricity and energy consumption. It is also a very non-alterable slow process of transaction validation which has limited the transaction speed on the blockchain.
A few blockchains are already operating on the Proof of Stake mechanism and they include Peercoin, Nxt, Blackcoin, Polkadot, EOSIO, and Cardano. Ethereum, the most active blockchain supporting hundreds of decentralised solutions and the largest community of crypto enthusiasts is in the process of transitioning to a PoS blockchain called Ethereum 2.0. It was originally designed as a PoW blockchain.
What PoS offers
The attempt to improve the functionality of a blockchain especially in the aspect of scalability birthed the Proof of Stake concept. It offers much more than the PoW mechanism with low consumption of energy and increment in transaction speed because instead of utilizing energy to answer PoW puzzles, a PoS miner is focused on mining a percentage of transactions that is reflective of their ownership stake.
We know our community has high hopes for the updates being made on the AENX v2.0 (aenxchange.com) , and we are working tirelessly to ensure future upgrades can be launched timely and suiting the community’s expectations. We are currently promoting discount benefits such as zero transaction fees, as well as the latest OTC capabilities and referral program launched, we encouraged our potential users to complete the KYC forms not just to enhance account verification, but to enjoy maximum benefits and discounts, too!
Stay tuned for more updates.
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