1. PixelPlaygroundHome
  2. Web3 News

Why is pow turning to pos

• Web3 News • 95 views

Why is pow turning to pos Editor\’s note: This article is from BlockBeats (ID: 0x

Why is pow turning to pos

Why is pow turning to pos Editor’s note: This article is from BlockBeats (ID: 0xB1COCC), authorized to be reproduced by Odaily Planet Daily.

Bitcoin started the PoW mining mode on December 11th last year, and broke through the $1,000 mark at the end of February this year and then fell back to around 2,000 points. During this period, the mining income of Bitcoin has also become lower and lower. Ethereum has now returned to the proof-of-work (POW) consensus mechanism after experiencing multiple halvings and hard forks. However, now it has turned to the pos system due to the high requirements of the market for the POS consensus algorithm and the need to improve network security. Why is pow turning to pos? Because there are a large number of illiquid tokens (non-stable assets) in the current Bitcoin network. To cope with this situation, miners need to lock their BTC and ETH to pay transaction fees (if they do not have enough cash to buy these cryptocurrencies). For most people, this is impractical and unacceptable, so they choose a proof-of-stake (Proof-Of-Stake) based on the opportunity to earn rewards or pledge other digital assets. When you start looking for alternatives, you can delegate your tokens to someone else for mortgage, or provide another way to get returns. If you want to get more returns, you can also use smart contracts to automatically adjust prices.

According to a recent tweet, there are currently more than 200 addresses holding more than 100 Bitcoins, accounting for 5% of the total. Although some people think that this data is reasonable, many people doubt whether this quantity is reasonable. In fact, we see that many users will keep their Bitcoins in their wallets and wait for them to be unlocked before they can be used. So the question is, why choose such a method?

In short, it is to achieve more efficient network operation by using decentralized node voting to decide how to allocate funds. For example, I can elect a representative with at least 100,000 votes through community voting, and he can contribute to the nomination and support his team. At the same time, he also has the opportunity to be selected by the committee members to supervise the execution of his proposal. Finally, he can become a validator to ensure that every nominee receives the corresponding reward. In addition, many others may participate, but in the end, they will lose control.

This article and pictures are from the Internet and do not represent Fpips's position. If you infringe, please contact us to delete:https://www.fpips.com/23590/

It is strongly recommended that you study, review, analyze and verify the content independently, use the relevant data and content carefully, and bear all risks arising therefrom.

Like (0)
Previous 08/13/2023 05:46
Next 08/13/2023 06:09

Recommended articles