The variety of validation methods has certainly expanded. From 2011 to today, we started hearing about PoS, dPoS, dPoW, PoA. Weird acronyms, but all with meaning. Let's give an overview of the pros and cons of the various validation methods. You can find all the validation methods, explained in this article of mine.
In PoW, Proof of Work, also called mining, we are well aware of the energy expenditure caused by it. In the world, hundreds of megawatts of power are used to make computing machines work. Mining was originally born to create a decentralized network of miners, making it almost impossible to control the Bitcoin network. Over time, many small miners have associated themselves in large mining farms, which in turn have associated themselves within the Calculation Pool to make payments even more constant and uniform and optimize some cost items deriving from management. of the IT and management part of the generated capital.
Despite everything, mining is still a method that allows a good degree of decentralization of voting power.
In PoS, Proof of Stake, the direction that Ethereum has taken with the Constantinople update and which will be made definitive with the Casper, Ethereum wants to take a step towards the scalability of its network. The advantage of PoS over PoW is precisely that of having a much lower energy consumption. The PoS provides for the freezing of coins in the wallet adhering to the PoS.
Thanks to a randomness parameter that some PoS methods insert, even wallets containing fewer coins and for less time have their ability to validate transactions.
Also in this case, centralization risks being proportional to the capital invested by people, even if with the random variable, and the impossibility of aggregating into clusters, in my opinion may remain a somewhat more democratic method than the PoW.
The dPoS, delegate Proof of Stake, consequently risks being able to centralize the choices, although for game theory, a balance can also be found here. In dPoS, the little stakers vote for the Delegates. Therefore the only variable that changes with respect to the PoS is precisely the degree of centralization.
Suppose a Delegate wants to be clever, and validate bogus transactions. The other Delegates notice this, as a dispute arises over the Blockchain. Since all the Delegates are representatives of other people, they would have a double damage in validating fraudulent blocks: the first is the figure they make with their members; the second damage would be that the whole Blockchain could lose credibility, the cryptocurrency for which they are staking would lose value and perhaps credibility. They would therefore have an economic damage resulting from the possible devaluation of the token, a second damage from the abandonment of voters and consequently would no longer be able to meet the expenses they incur to maintain the voting servers.
The PoB, Proof of Burn, there is good potential, but the tokens can run out and it could lead to the creation of dangerous auctions for the validation of the blocks.We already have seen the ALGO mechanism, the Pure Proof of Stake that adds a random variable to the traditional Proof of Stake, enabling also small stakers to take active part into block validation.
What are your thoughts on it? What is really required for a blockchain to become decentralized, which is your favourite consensus model and what improvements would you bring?
Cover image credits
https://blockonomi.com/practical-byzantine-fault-tolerance/
