PoW has always been criticized for its excessive energy consumption. Now ethereum, as the largest and most ecologically prosperous public chain in the blockchain field, has shifted its verification mechanism from PoW to PoS, which has attracted important attention in the circle.
The essence of a blockchain is a decentralized ledger, which is a public ledger that anyone can participate in, unlike the traditional accounting ledger.
It is easy to reach consensus in centralized scenarios, but difficult in distributed environments where communication between nodes can be unreliable, delayed, faulty, or even outright node downtime.
Therefore, for a decentralized application to work, there must be a common understanding of what counts as effective accounting (a consensus mechanism). It is no exaggeration to say that consensus mechanism is the soul of blockchain.
At present, there are more than ten kinds of consensus in the blockchain field, and the main consensus mechanism includes PoW, PoS and DPoS. No consensus mechanism is perfect. Then, does ethereum switch its verification mechanism to PoS mean PoW is obsolete?
First, let's take a look at how different consensus mechanisms work:
PoW: Proof of work
Proof of Work: Proof of Work, or PoW, was originally introduced as an anti-spam mechanism.
At its core, PoW requires machines to consume electricity (resources) to do some work to avoid generating "disinterested" spam, thus preventing denial-of-service attacks and spam abuse.
Blockchain has cleverly introduced anti-spam measures into P2P communication protocols through PoW, a mechanism to build trust between users by pitting miners against each other and combining it with monetary incentives.
Through PoW Bitcoin, a completely decentralized, fair and just management organization has been established, and fair competition has been realized among users (i.e. nodes). Whoever solves the problem first will get corresponding benefits.
PoW is a perfect mechanic and has been running in balance for 14 years. But its disadvantage is also obvious, the energy waste is serious. Because the nodes involved in the calculation need to consume computing power, and the final effective bookkeeping right only one user, the rest are useless. Bitcoin is also blamed for consuming billions of dollars in electricity every year.
To reduce energy consumption while ensuring application security, Pos mechanism was born.
PoS: Proof of interest
Proof of Stake, or PoS, works by different mechanisms that allow users to reach a consensus without trusting each other.
PoS has no miners and does not need nodes to mine. The token holder of PoS only needs to pledge a certain number of coins, and then the node can verify the transaction. If the verifier tries to double spend, he will lose his pledge token, which is a request for everyone not to mess around.
The advantage of PoS is that it consumes less energy, takes less time to reach consensus and is expensive to do evil. The disadvantages are also obvious, because the more coins held, the longer the time, the greater the income distribution, the more coins obtained, the currency holdings tend to be centralized; At the same time, there is no motivation to cash out if there is income distribution in currency holding, resulting in poor liquidity of currency.
DPoS: Entrustment proof of interest mechanism
Delegated Proof of Stake, DPoS, is an optimization based on PoS.
DPoS has created a voting system that directly depends on the reputation of representatives. Similar to joint-stock companies, ordinary shareholders cannot join the board of directors. Instead, they need to elect representatives to form the board of directors by voting.
The advantage of DPoS is that the number of accounting nodes is small, the collaboration is efficient, and the accounting efficiency is high. Its disadvantage is that the degree of decentralization is weakened, and the bookkeeping is carried out by elected representatives, and there is a certain degree of centralized control.
At present, no consensus mechanism is perfect, and each has its own shortcomings.
However, In terms of decentralization and security, Tan believes PoW is the best. Although energy consumption is a disadvantage, most mining pools use renewable energy, and with the reduction of energy costs, this disadvantage is not necessarily a big problem.
On the other hand, Pos and DPos have changed into mortgage and entrusted agent mechanism to improve energy consumption, which seems to improve efficiency and performance, but in essence, it is more centralized, which is contrary to the purpose of blockchain decentralization.
Of course, ethereum needs to accommodate a lot of applications and functions, and some flexibility will be necessary, but that doesn't mean Pow will be obsolete.
On the contrary, due to its extreme decentralization and strong security, PoW can truly assume the responsibility of digital gold and become the anchor object of other virtual currencies.
In the future, with the continuous development of blockchain technology, the consensus mechanism will continue to be optimized, and perhaps a better consensus mechanism will emerge.