Why use the Proof of stake?
Proof of stake is something you need to understand if you are in the Altcoins world. When I came in contact for the first time with this concept, I felt completely lost. You need to take a deep breath, do some relaxation and start to open your brain to increase your knowledge
As you may be aware of, Bitcoin uses the concept of proof or work. This method involves that you need to solve a mathematical puzzle to keep the Bitcoin network secure. The inconvenient with this method, large electricity is spent and you need a costly data warehouse to store the equipment.
This is the reason why people start to innovate with another way to confirm the transactions. They came with a method called proof of stake.
How does proof of stake work?
You don’t mine with the proof of stake, instead, you have the concept of minted. What does that mean? You can receive a reward for the stake or wealth you have in the wallet. Furthermore, a proof or stake has already predetermined numbers of tokens released on the system.
Here is an example: if you have 6% of a proof of stake tokens, you have 6% more chance to receive interest.
A nice YouTube video that explains what is proof of stake and how it works.
Also, an interesting fact that you must know, you can also call it virtual mining.
The advantages of the proof of work
- Don’t need to buy hashing power and spend so much money on your electricity bill
- Don’t need to release new coins to reward the miners like in the Bitcoin network
- Reduction of centralization like in Bitcoin. The big data warehouse equipment concentration in China for an example.
As you can see some advantage of using it, many Altcoins have this type of validation to secure the network.
Proof of stake dividends
I found a good article on another blog about this topic that you should read on BTC Geek. Not much information is available on this topic and this is something I will explore in a future post. I love the dividends I receive every 3 months from the stocks I have. It is something I would like to see implemented on tokens apps in the future.
Proof of stake tokens
The blogger Bitcoin Dood brought to my attention last week a new service. This service is Poswallet that has over 100 proofs of stake tokens listed. I am trying the service at the moment, and this should be a nice solution to explore.
I invite you this check his article on his blog: https://bitcoindood.com/bitcoin-blog/2017/04/07/the-2017-roadmap-for-poswallet/
I found this topic that I am exploring in the cryptocurrency space interesting. So many Altcoin tokens that have the feature of the proof of stake implemented. What I find the most appealing, you have the possibility to receive a reward for holding your tokens in your wallet.
In the future, we are going to see websites that will list them. Also, give the stats like the dividend paying and the profit made by companies, so this my guessing, but I would like to see it.
Would you like to invest in proof of stake that pays a dividend?