Bitcoin Proof-of-Stake: A Peer To Peer Electronic Cash System Reducing Miner Dependability
Bitcoin has been here for more than a decade and continues to dominate nearly 66% of the overall cryptocurrency market. However, the proof-of-work (PoW) consensus mechanism for Bitcoin core blockchain makes it susceptible to complete miner domination through 51% attacks.
Besides, the latest Bitcoin halving has reduced miner rewards while increasing the network complexity which ultimately results in higher mining costs. At the same time, the lack of scalability of the BTC core network has become a major issue for its fans.
A team of developers is working on bringing a new evolution in the Bitcoin Technology Bitcoin Proof-of-Stake. This peer-to-peer electronic cash system aims are combining the world’s strongest digital asset with a more reliable, scalable, efficient, and flexible Proof-of-Stake (PoS) consensus algorithm.
Bitcoin PoS aims to update the Bitcoin core blockchain network for the future by bringing new advances in addition to everything that the existing Bitcoin core network has to offer.
Earn Staking Rewards With Bitcoin PoS
With the Proof-of-Stake (PoS) infrastructure, users can stake their Bitcoin tokens and earns passive income in the form of rewards. Unlike the PoW model, the Bitcoin PoS would require minimal hardware and fewer electricity costs compared to Bitcoin mining.
To participate in the Bitcoin staking process, you just need to follow the four simple steps.
- Download the Bitcoin PoS wallet
- You can get Bitcoin PoS from your favorite exchange or even using the website exchange functionality
- Stake your Bitcoin PoS cryptocurrency directly from your wallet
- Start earning rewards for your staked Bitcoin PoS
Benefits of Having A Proof-of-Stake (PoS) Consensus Model for Bitcoin
Bitcoin PoS brings a number of benefits making the overall network performance more rewarding, faster, and facilitates real-life digital currency payments. Below are some of the benefits of Bitcoin PoS:
- Stability: The Bitcoin PoS offers a stable platform to control your money without any intermediaries
- Low Fees: Unlike the Bitcoin core, the Bitcoin PoS will prevent any sort of network congestion and will keep the transaction fee low.
- Fast Payments: Send and receive payments instantly anywhere across the globe on a highly scalable network. This could also make Bitcoin PoS an ideal choice for instant retail payments thereby pushing for mass adoption.
- Trustworthy Network: Simple and powerfully secure network with a huge number of full nodes.
- More Decentralization: The Proof-of-Stake offers more decentralization as compared to the PoW model due to lesser miner dominance
Bitcoin PoS Technical Details
- Block Reward: Just like BTC core reduces the mining rewards after every Bitcoin halving or say every 210,000 blocks mined, the Bitcoin PoS will reduce block rewards 25% every 700k blocks or every four years. The current block reward is 6.25 BTP / block.
- Proof of Stake Version 3.0: Bitcoin PoS uses the Proof-of-Stake (PoS) third version which eliminates issues pertaining to coin-age and short-range attacks.
- Block Time: Bitcoin PoS is 3 times faster than Bitcoin core since a new block is minted every 3 minutes against BTC Core’s 10 minutes. Besides, the Bitcoin PoS also uses a difficulty adjustment algorithm that offers more predictable and less picky block times.
- Higher Throughput: Bitcoin PoS has the same block size as the BTC core but lesser block time. This helps it to handle three times more transactions while making transaction confirmation faster.
- Mututalized Proof-of-Stake: The MPoS is an algorithm that aims at evenly distributing block fees across stakers. For every minted block, each staker gets 10% of the block reward. The remaining 90% is split into the next 9 blocks after the stake has matured.
- Coinstake Maturity: For every newly minted coin and the stake to mature, it takes around 500 blocks. Staking occurs only after the coins have matured.
- Bitcoin PoS Staking: Staking can be done only with UTXOs on P2PKH and P2PK addresses. These addresses help to calculate the network weight and the expected time to reward.
As said earlier, Bitcoin PoS aims to create a faster, efficient, and scalable output of the Bitcoin blockchain to meet future challenges. It aims to become a world-class financial instrument in the crypto market.
It plans to do it by combining steady growth with consistent earnings while continuing to innovate with time.