There has been a lot of attention drawn towards the Proof-of-Stake mechanism recently, especially ever since Ethereum announced that it would be moving away from its current Proof-of-Work (PoW) system.
For those new to blockchain technology, the differences between these two mechanisms can seem difficult and confusing. For more information, there are many in-depth articles available elaborating on the differences between the Proof-of-Work mechanism and the Proof-of-Stake mechanism.
However, while the specifics of each mechanism are quite complicated, it is easy to understand what sets the two methods apart.
What Are the Major Differences Between Proof-of-Stake (PoS) and Proof-of-Work (PoW)?
The main difference between PoS and PoW is that PoS has no resource-heavy mining involved. With PoW, miners are responsible for computing complex algorithms in order to secure consensus.
With PoS, coins are minted or forged. This makes PoS much more cost-effective than PoW.
PoS is also much less reliant on mining factories than PoW. Therefore, a PoS approach could be much more resistant to censorship in light of China’s recent ban of crypto exchanges, as it is likely that mining operations could be a lucrative centralized target to censor in the future.
Ethereum’s Transition From Proof-of-Work (PoW) to Proof-of-Stake (PoS)
Ethereum’s future Casper update is set to transform Ethereum from the PoW mechanism to the PoS mechanism.
This PoS protocol will achieve consensus through stakers who essentially ‘stake’ their coins by locking them down in specialized wallets.
Similar to the way miners are currently rewarded, stakers will be rewarded in return for their service to the network. They will receive an annual dividend of ETH that has been collected from network fees. The more ETH you stake, the higher the dividends will be. For those with a high number of coins, staking would be a very lucrative endeavor.
Ethereum’s founder, Vitalik Buterin, has guesstimated that users will need approximately 1,000 ETH in order to be one of the network’s inaugural stakers.
Nxt Was the First Blockchain to Fully Implement Proof-of-Stake (PoS)
Nxt was the first blockchain to fully implement the Proof-of-Stake (PoS) consensus mechanism.
Jelurida, the team behind the open-source blockchain platform Nxt, ran the second ever ICO back in 2013.
However, their token sale wasn’t very successful. They managed to raise less than $6,000 overall. However, even with this small amount, the team managed to build and launch next.
Since then, it has become a very stable blockchain with a large variety of different features. It has been adopted by several noteworthy names – including European Bank BNP Paribas and Accenture Spain.
However, aside from this, the platform had not garnered the attention the Jelurida had been hoping for.
Four years is an awfully long time in terms of blockchain technology. Since 2013, the company has gained significant experience. And while they are still committed to supporting the Nxt blockchain, they are also on the cusp of releasing their next platform. It will be known as Ardor.
You’ve Heard of Software-as-a-Service (SaaS) – But What About Blockchain-as-a-Service (BaaS)?
Ardor is one of the major services leading the Blockchain-as-a-Service revolution. Its model supports many use-cases right out of the box.
It makes it easy for anyone to get into the blockchain space, and even allows developers to build their own solutions on top of it.
The platform is particularly well-suited for teams running ICOs, as it is a more accessible alternative to Ethereum. With Ardor, issuing an ICO takes only a few minutes.
Ardor also has other highly unique features that are not available as part of other blockchain solutions.
One of these features is child chains. These allow users to utilize the advanced blockchain technology of Nxt for their business, group, or independent project. More information on this feature is available on the Ardor platform’s website.
Those holding NXT tokens by December 28 will be able to participate in Jelurida’s IGNIS Airdrop, where 500M IGNIS will be given away as a free airdrop to all NXT owners.
Ardor’s scalable blockchain business platform launched on January 1, 2018.
With the right marketing strategy, the platform could be highly successful.
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