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phanestechnology · 3 years

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What the Proof of Stake and Supernode box replaces the Proof of Stake?

PoS uses a processplus pseudo-random election to choose the validator of the next block, which depends on the amount of tokens that each node has staked. In order to prevent nodes with high stakes from dominating the network, techniques such as Random Block Selection and Room Age Based Selection are generally adopted by the algorithm.

It is generally believed that the higher a node's stake, the more likely it is that the node wants the network to remain secure. In order to launch a 51% attack, a Node would require control of 51% of the entire circulating supply, an expensive proposition, just like PoW. Additionally, if a node behaves dishonestly, all of its staked parts are confiscated by the network, which further incentivizes nodes to stay by the rules.

Since no special material is required to become a validator, anyone availablesant of a simple laptop can join the network as a node. Greater decentralization undoubtedly leads to greater security.

However, just as every coin has two sides, greater decentralization also results in performance issues. The nodes in a PoS network have different hardware metrics, which makes the network as strong as its weakest node. Block validation time may be longer for nodes using obsolete hardware, resulting in an overall increase in confirmation times under heavy traffic. Anyone who's tried to participate in a Neo ICO would know what I'm talking about here!

The PoS family

Efforts have been made by various blockchain projects to remedy the limitations from which conventional PoS suffers, by providing modifications

in the protocol while retaining its basic essence. Daniel Larimer came

with Delegated proof of stake (DPoS) in 2014, which was first adopted by BitShares. Later, other cryptocurrencies like Lisk and EOS also used DPoS.

In DPoS, nodes vote for a number Fixed delegates (or witnesses), who participate in the consensus process and secure the network. The voting power of each node (or stakeholder) is proportional to the number of coins it has. Voting rewards are usually collected by delegates and shared proportionally with theirs respective voters. If an elected node engages in fraudulent behavior, it is immediately kicked out and replaced by another.

DPoS distributes tasks between nodes and delegates. Since ordinary nodes participate only in the block validator election process, transaction times depend only on the performance of the delegates and not on ordinary nodes. Delegates are either motivated to remain honest or they are rejected, which is supposed to add to the overall security of the network.

Another popular variant of PoS is Leased Proof-of-Stake (LPoS), which was developed in 2017. LPoS allows nodes to rent their coins to mini ng nodes, which validate blocks and earn rewards. Mining nodes must wager a minimum number of coins. The rented rooms are locked.stored in the user's account,

and are not physically transferred to the minor. As in other cases, the higher the amount of coins rented from a miner, the higher their chances of winning bulk rewards. Waves was the first project to use LPoS.

Since miners must be online 24/7, every user might not be interested in running a node mining. By allowing users to lease their parts for mining, more nodes can be involved in the overall governance of the network. This increases the degree of decentralization of the network, although it also entails the risk of the formation of mining pools.

Enter SPoS

Supernode Proof-of-Stake (SPoS) is the latest in algorithmPoS-based consensus ithms. It is the brainchild of Sunny King, the creator of PoS himself, and was announced to the public in January 2019. While it retains the fundamentals of PoS (and some of its derivatives), What sets SPoS apart is that it focuses more on hardware upgrades than protocol enhancements.

The SPoS protocol itself requires the supernode hardware to be upgraded as the performance of the blockchain requires. By rem Due to the dependence on ordinary nodes, SPoS claims that constant network performance can be guaranteed even under heavy traffic. V SYSTEMS is the first project to have implemented SPoS.

Ordinary nodes can still participate in the governance of the network by leasing their coins to these supernodes, who distribute the hit rewards proportionally among the pi ownersgot real. The rooms can be rented without giving up their ownership thanks to the technique of Cold Staking. Each user has 2 keys - the typing key, which remains online and allows the coin mechanism to sign newly minted blocks; and the expense key, which is securely held offline, actually “owns” the participation.

Stake owners can also transfer or spend their staked coins whenever they want, encouraging more nodes to stake coins. In principle, this is similar to LPoS, although LPoS does not impose any restrictions on the choice of hardware for mining nodes.

SPoS also supports a new part staking mechanism called Staking 2.0. In ordinary PoS, by staking coins on the network, nodes earn the native coin of the network as rewards (for example, Neo staking allows users toisators to win NeoGas). In Staking 2.0, not only will supernodes win the native blockchain coin, but all blockchain-supported tokens (for example, VSYS staking will allow users to earn both VSYS and IPX from now on). Supernodes are then expected to distribute them all among the stake owners.

Concerns about decentralization

Despite attempts by SPoS for greater decentralization through Staking2.0, it There are concerns about inherently present trends. Compared to Bitcoin or Ethereum which have thousands With minor nodes around the world participating in the consensus, the governance of SPoS is requisitioned by a handful of supernodes.

The owners of the picketswould naturally tend to rent parts from supernodes with a higher rental rate. This would lead to the tendency to create strike pools, and if a supernode ends up assimilating the majority of the coins involved, it can compromise the security of the network as a whole.

With more rooms rented, the rental rate of a supernode would drop automatically, thus ensuring that a balance is maintained and no supernode ends up becoming a player dominant in the ecosystem.

Unfortunately, that still doesn't stop the rogue supernodes from ganging up and trying to take over the network. I had the opportunity to express this doubt to Jacob Gadikian , a blockchain technologist who was part of the SPoS development team

According to Jacob, in order to launch such an attack, the supernode (s) should first acquire a sufficient amount of stake. They can earn it by buying the coins on exchanges or by using social marketing skills.

to convince users to rent coins from them.

In the first case, buying such a large amount of coins would drive up the price of the coin, making the attack financially impractical (similar to the argument for Bitcoin) .And in the second case, they would no longer be red supernodes, but rather ecosystem partners chosen by stakeholders e

Thoughts of separation

PoS was an attempt to provide the same security and decentralization as PoW, but at lower cost SPoS further attempts to improve network performance, shifting the focus from updating the algorithm to upgrading.material day

. In the process, they seem to have been more flexible on decentralization. After all, no project has really been able to solve the blockchain trilemma.

Having said that, even PoW is not a guarantee against network attacks. Earlier this year, one of the best -20 ETC (Ethereum Classic) market cap coins have fallen

prey at 51% to nail. It continued for 3 days, resulting in losses in the order of $ 1.1 million. SPoS takes a different approach compared to other variants of PoS

, and it is still in its infancy. It is only after a sufficient amount of time and a decent number of projects have adopted SPoS that we will be able to tell if King's second child has been able to outperform his firstborn.

#cloudmining #cloudminingwebsite #cloudminingwebsites #crypto #cryptocurrency #cryptocurrencies #cryptotrading #cryptonews #bitcoin #bitcoinmining #bitcoins #spos #supernode proof of stake

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cryptnus-blog · 6 years

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Weekly Report: Coinbase Custody, SEC Subpoenas, Bitcoin ETF Delay

New Post has been published on https://cryptnus.com/2018/08/weekly-report-coinbase-custody-sec-subpoenas-bitcoin-etf-delay/

Weekly Report: Coinbase Custody, SEC Subpoenas, Bitcoin ETF Delay

Bitcoin has been in a downward trend since last week correcting from over $8200 to under $7000. Best performers among top-40 crypto were Ethereum Classic (2%), Binance Coin (1%). Worst performing top-40 assets were Zilliqa (-22%), Bitcoin Gold (-21%), Stellar (-21%), Lisk (-21%). Analysts see the dip as a technical move as fundamental news was bullish, particulary the NYSE Bakkt and Coinbase Custody announcements.

Crypto Regulation News

NYSE Owner Partners With Microsoft to Launch Cloud-Based Crypto Platform

Intercontinental Exchange (ICE), New York Stock Exchange’s (NYSE) parent company, revealed on Friday that it’s planning to launch a new company called Bakkt. According to ICE, Bakkt will aim to “leverage Microsoft cloud solutions to create an open and regulated, global ecosystem for digital assets.”

This new crypto initiative will reportedly involve giant companies including Microsoft, Starbucks, and the Boston Consulting Group (BCG). Bakkt’s main objective will be to offer a comprehensive digital asset platform through which retail consumers and financial institutions can access an e-commerce system to “buy, sell, store, and spend” cryptocurrencies

Indian State partners with Mahindra to build “blockchain district”

The Indian Telangana state government is planning to build a district within the state capital dedicated to blockchain startups with Tech Mahindra. The IT department of the Telangana state government signed a memorandum of understanding with Mahindra to build the country’s first blockchain district that will be located inside Hyderabad, the state’s capital. The state government will be responsible for buildings and infrastructure while Tech Mahindra will offer expertise focused on the blockchain ecosystem and technological skills. Tech Mahindra is working on developing a blockchain platform tailor-made for startups in the country’s Eleven01 protocol.

SEC subpoenas Long Blockchain

The SEC subpoenas Long Blockchain, the beverage maker. following a claimed blockchain pivot. The firm received the subpoena on 10th July with the SEC “seeking the production of certain documents”. The firm delisted from the Nasdaq stock exchange after losing an appeal over the decision and a drop in its stock. The company, which was named Long Island Iced tea before the pivot, is being accused via a series of public statements designed to mislead investors and to take advantage of general investor interest in bitcoin and blockchain technology. Similar subpoenas were received by Riot Blockchain last year.

The Philippines is close to issuing a new crypto regulation

The Philippines is close to approving a new regulation governing ICO. The country’s SEC published draft rules governing ICOs and now collects feedstock before those rule come into effect. The regulation assumes that all tokens issued in all ICOs conducted in the Philippines are securities by default unless the issuers can prove otherwise. The regulator announced that most ICOs conducted in the Philippines have argued that their tokens were not securities and should not be governed by the SEC.

However, the regulator believes it would be dangerous to let investors make the judgement over the matter as they do not have sufficient resources to identify which ICOs might be scams. Unde the regulation, companies registered in the Philippines and wishing to make a token sale would have to submit the initial assessment application to the SEC at least 90 days ahead of the issuance. The application must contain the review of the ICO proposal, its credibility and the legal opinion from an independent third party to justify it is not a security.

South Korea plans to end tax benefits for Crypto Exchanges

The South Korean government has announced a new set of laws, which will end major tax benefits for cryptocurrency exchanges. Under the amended proposals, cryptocurrency exchanges will no longer be eligible for income and corporate tax deductions. In the official statement, government authorities wrote, “from next year, virtual currency handling businesses will be excluded from the industries eligible for the tax reduction for SMEs (small and medium-sized enterprises).” Under the current tax exemption rules, income tax and corporation tax are reduced by 50% to 100% for 5 years for business startups, SMEs and venture companies.

The SEC may delay its decision on Bitcoin ETF proposal to Q1 2019

In a twitter thread, legal expert Jake Chervinsky clears up some of the initial confusion around the VanEck/SolidX Bitcoin ETF proposal. According to Chervinsky, “the SEC can, and probably will, delay its decision on the VanEck/SolidX commodity-backed Bitcoin ETF until March 4th, 2019.” Chervisnky added further that he “can’t imagine the SEC will approve the first ever bitcoin ETF without taking all the time allowed by law.”

Crypto Market News

JP Morgan Chase’s Jamie Dimon coments on blockchain potential

Mr Dimon shied away from commenting on cryptocurrency, however he said that fiat payment apps are “the biggest potential disruption to our buiness” in his interview to HBR. The blockchain technology is “real” and JP Morgan Chase will use it for “a whole lot of things”.

Bitmain $1.1 billion in profit in Q1 2018

China-based cryptocurrency mining giant Bitmain reportedly earned $1.1 billion in profits in Q1 2018 compared to a net profit of $1.2 billion for all of 2017. The company controls a significant amount of bitcoin and bitcoin cash hash rate, and sells mining hardware. Bitmain expects to make $2 to $3 billion in profit for the 2018 fiscal year. The total value of all bitcoin mined in Q1 2018 was $1.3 billion. The company is also in the final stages of preparing for IPO on the Hong Kong stock exchange (HKEX), the date of the Bitmain’s listing has yet to be announced.

Galaxy Digital to begin trading on Toronto Stock Exchange

Cryptocurrency bank Galaxy Digital LP began trading on Canada’s TSX as of 1st of August. The New York-based firm completed the Reverse Take Over (RTO) of an inactive Canadian shell company earlier in January 2018. According to ex-Fortress fund manager and Founder of Galaxy, Mike Novogratz, the whole process took a “frustrating” 8 months. As covered, the crypto merchant bank reported a loss of $134 million in the first quarter of this year, in its first-ever financial disclosure. The firm, based in Manhattan, reported a net loss of $103.3 million on trading, with $13.5 million being on cryptocurrencies and $86.5 million worth of unrealized losses. Galaxy Digital has had a pretty rough start of trading, when stock started trading at $2.75 CAD and closed below $2 CAD at $1.92 CAD later that day.

Coinbase Custody announces plans for 40 digital assets and adding GBP pairs

Coinbase Custody has announced its expansion in terms of custodial services for institutional clients. Among the assets under consideration are Ripple, EOS, Monero, VeChain, Cardano, Bitcoin Gold, and Telegram. According to Sam McIngvale, Coinbase Custody product lead, all of these “assets are only being considered by Custody at this time, and this announcement has no bearing on trading-based products.” In the very same week, Coinbase announced adding British Pound support, enabling their customers to deposit, buy, sell and withdraw fiat via their UK bank accounts. “UK banks have been conservative in terms of working with crypto businesses and we’re proud to be one of the first companies to get access to domestic banking,” the CEO of Coinbase UK, Zheeshan Feroz said.

Binance acquires annonymous mobile wallet for Ethereum tokens

The leading cryptocurrency exchange Binance has acquired the anonymous and open-source mobile application Trust Wallet which is capable of storing more than 20,000 digital assets. Changpeng Zhao, CEO of Binance, commented on the acquisition of Trust Wallet, as follows: “Wallets are the most fundamental interface to the crypto economy, and a secure and easy-to-use wallet is key to proliferate the adoption of cryptocurrencies.” He further added that Binance “want to keep Trust Wallet as an independent brand and product.”

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