Ethereum and Cardano, two of the most well-known cryptocurrencies, ranked at number 2 and number 11 on the coinmarketcap respectively are set to launch their Proof of Stake in early 2020.
Cardano has planned to relaunch their PoS platform to a public network. Ethereum has been trying to achieve a perfect PoS network too since 2014 where scalability and running powers might not be an issue for the users. Their plan is to implement sharding, a scalability solution, and Proof of Stake on their existing blockchain for their new and improved Ethereum 2.0 platform. Cardano too is pushing towards publicizing their existing PoS platform. The goal is to reduce energy costs and bring a better framework with reduced centralization. Unlike Proof of Work, PoS relies on the staking of a particular currency to be able to solve cryptographic puzzles.
Whether or not PoS solves the concerns of blockchain and crypto is also a question here. Jason Palmer, the founder of Dogecoin also stated that the consensus algorithms, for now, aren’t meant to be perfect, it is how the incentives are aligned to output a decision. He said while talking to BlockPublisher:
Consensus mechanisms are about aligning incentives to output a decision in the least centralized way. They are not designed to be flawless.
Proof of Work has been consuming a lot of electrical energy and articles after articles have been published regarding how quickly it will soak up the resources of Earth and how it’s environmentally unfriendly. This called for the introduction of a new verification tool, which in our case is Proof of Stake. Proof of Work chains is also partially centralized, as the computers with higher computing powers get more chances to solve the cryptographic puzzles. This also makes smaller chains of these kinds vulnerable to 51% attack and hacking through new block formations. Longer chains, however, are safe from these attacks. PoS also solves these problems if block finality is introduced. Dr. Mervyn G. Maistry, CEO and founder of Konfidio shared his views regarding the mining algorithms stating:
An upgrade to Proof of Stake (PoS) and an introduction of block finality would make this kind of attack near impossible, and that’s why ETH moving to PoS is so interesting. The issues of finality reversion, equivocation and censorship appear to be overcome with Ethereum’s Casper plans, without the introduction of a different ‘nothing at stake’ flaw that affects most PoS thought experiments.
A blockchain is only as secure as its consensus algorithm. If the algorithm ensures randomness and equal opportunities to miners, it can be termed as truly decentralized. In any other case, the essence of decentralization is stripped away, which also takes away the cause of why people switch to decentralized spaces and blockchain.
Ethereum’s plans to include sharding apart from PoS in their change ensure greater speeds in the near future which might ease down the speed issues for most people. But it is yet to be seen if Proof of Stake of Ethereum and Cardano is a shot at mass adoption. It might seem to be the logical choice in terms of the solution of the energy issue, but it is yet to be seen if PoS provides truly decentralized mining opportunities.