2018-7-15 19:49 |
Cardano (ADA)–Coming off the positive news of a potential partnership with Coinbase, Cardano’s ADA has benefited from a pump in price over the weekend. Investors and enthusiasts alike seek to reverse the losses of 2018’s bear cycle, both in anticipation of the buying power of Coinbase’s 13 million+ customers and also in appreciation for what the IOHK team has been able to accomplish in advancing their cryptocurrency.
While the appreciation in price has been a welcome change for investors suffering through 90% loss in value since January’s all-time high (a figure in-step with most market losses), the team behind Cardano is more excited for how their innovative protocol will bring change to the landscape of Proof of Stake. Named Ouroboros, the Cardano protocol seeks to reinvent Proof of Stake blockchain verifying, while also ensuring the security of user funds.
Cardano Proving Proof of StakeIn April, IOHK Founder and CEO (the company behind Cardano), tweeted a research paper lauding the improvements of his company on bringing the level of sophistication of PoS to the more mature field of Proof of Work (what Bitcoin’s blockchain functions on).
Of all the papers IOHK Research has written, this one is the most significant. It's a major advancement for Proof of Stake https://t.co/QNIPonatF6 now PoS has nearly identical properties to PoW. https://t.co/zAP7dSxR3y Welcome to the age of Ouroboros Genesis
— Charles Hoskinson (@IOHK_Charles) April 26, 2018
As Hoskinson points out in a following tweet, one of the immediate benefits of Proof of Stake over its competition PoW is the fractional amount of computing power and electricity required to secure the blockchain. While Bitcoin and other PoW currencies continue to grab headlines for their substantial electricity drain by miners, Cardano is looking to offer efficiency in addition to security,
Yeah, we don't have to use more power than the country of Ireland to have our system run. I didn't want to copy that one
— Charles Hoskinson (@IOHK_Charles) April 26, 2018
And bitcoin is still a small system. Imagine a global scale system with billions of users? The feedback loop reinforces more power consumption not less
— Charles Hoskinson (@IOHK_Charles) April 27, 2018
The underlying idea of PoS is that users vote or “stake” with their coins on the network, thereby accruing interest–in the form of freshly minted, distributed tokens at regular intervals–for their participation. The protocol incentivizes a cryptocurrency userbase to be active on the network, helping with the facilitation of transactions and securing the blockchain, while not requiring the processor-draining power of PoW. Given the looming reality of a global population invested in crypto, PoS is being examined as a more sustainable route to securing blockchains. As the aforementioned research paper states,
Proof-of-stake-based (in short, PoS-based) blockchains aim to overcome scalability, efficiency, and composability limitations of the proof-of-work paradigm, which underlies the security of several mainstream cryptocurrencies including Bitcoin.
However, until this point, Proof of Stake has remained a largely unproven protocol, at least in comparison to PoW. Given the market share and length of the time that Bitcoin has been functioning as a currency, PoW has had the time to mature in both technological development, as well as being proven secure for blockchain transactions and consensus. PoS lacks the same level of trialing, but IOHK believes they have silenced the doubts related to staking through Ouroboros. Speaking to CoinDesk, IOHK Chief Scientist behind Ouroboros Aggelos Kiayias had this to say of his protocol,
“Contrary to [other proof-of-stake protocols], we developed Ouroboros together with a formal proof of security that the protocol indeed captures the security properties of a robust transaction ledger like bitcoin.”
The key to both IOHK and the development of Cardano has been on the emphasis of scientific rigor and putting the concepts and technology through the process of peer-reviewing. While this has given the Cardano team an impressive collection of academics and industry leading minds to work with, it also presents the company in a more vetted light–which stands in stark contrast to much of the industry. Hoskinson’s regular engagement with the ADA community, in addition to big-name third parties like Google, is a welcome touch. But the currency’s main draw continues to be in the belief that the best technology, backed by the best team of developers will rise to the top. Time will tell how Ouroboros and the Proof of Stake can change the landscape of cryptocurrency.
The post How Cardano (ADA) Plans to Solve Proof of Stake appeared first on Ethereum World News.
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