Cardano, blockchain use cases and a hybrid PoS-PoW discussion

By Carded0421 | CryptoSphere | 11 Mar 2021


Cardano cryptocurrency is one of my favorite cryptocurrencies, if not my favorite cryptocurrency. It has some unique features that make it very interesting to study. I think Cardano will become more popular than Bitcoin as time goes on, because of this I want to do an article about how Cardano works and why it's better than Bitcoin. The first thing you need to know about Cardano is that it uses proof-of-stake consensus rather than Proof-of-Work. This means there isn't any central point where all nodes agree on something, instead each node decides for itself which transactions should be included in blocks and which ones shouldn't. The idea behind this is that it makes the network less vulnerable to 51% attacks, since no single entity can control enough computing power to censor or corrupt the entire system. This also allows for faster transaction confirmation times, because only valid transactions get included into blocks. As long as everyone agrees on which transactions are valid and which aren't, then your money is safe from hackers and other bad actors who try to steal it through double spending or other methods. One of the other benefits of proof-of-stake is that it doesn't require a massive amount of electricity and computing power like Bitcoin mining does. You can run a proof-of-stake node on a cell phone without much effort, and since running a node has little to no upkeep costs and doesn't give much return either you end up with a network that is both more secure and uses far less computing power than the Bitcoin network. As far as I know, no other proof-of-stake coins have combined proof-of-stake with the range of consensus options that Cardano offers.

Ethereum is considering moving to a proof-of-stake system in the future, but as far as I know they haven't done so yet and they aren't allowing users to choose which consensus mechanisms they use like Cardano does. One of the reasons that I really like about Cardano is the sheer amount of research and academic literature that has gone into its design. The people who created it have spent years writing scientific papers about how this system works, which I think makes it a lot more trustworthy than most other cryptocurrencies. One thing that really sets it apart from other cryptocurrencies though is the fact that it allows for multiple forms of consensus to be used on different blockchains, or even allowing achain to have no blockchain at all, if that's what the users want. For example you could have a blockchain that is intended to be very secure but has very slow transaction times, such as an election ballot blockchain which would need to process every vote cast including potentially several in one voting booth. In this case you wouldn't want thousands of people waiting hours for their votes to be processed, but it would still be very important that the votes were accurate. In this case the admin of this blockchain could choose to include only a small amount of its transactions on the blockchain, and then have a secondary proof-of-stake blockchain which is used to confirm the transactions in the main chain. When you vote you purchase a small amount of cryptocurrency from the vote chain's Steem-like hashing algorithm and include your vote in a transaction.

Since it costs a small amount of money to make a transaction on this blockchain, only people who are serious about their vote would do so, preventing users from spamming the blockchain with hundreds of votes for the same candidate. The transactions are confirmed by the proof-of-stake in this chain, meaning that if you want to cancel your vote you can return your funds after some time has passed. Since large corporations who want to force their will on the people might be able to monopolize most of the voting booths, they wouldn't be able to spam the blockchain with fake votes since they would have to pay a very large sum in order to do so. This chain would use a very secure hash algorithm to ensure that the votes are counted correctly.

This idea, however, is fraught with problems, both economically and socially for large scale government voting, but would work quite well in smaller settings. Of course charging people to vote would never work for government use, it's hard enough to get people to vote as it is. That's the beauty of using a blockchain to ensure voting is accurate, as data could be secured and allowing governments to use a blockchain to keep data sensitive, but keep other parts of data public, such as the votes, would be the beauty of using a network like Cardano. The beauty is the voting could be done from anywhere, even the comfort from one's own home. This would eliminate such 'fraud' mail-vote use cases which led to a huge uprising recently at the state capital. And mail voting did have several errors, regardless of whether or not those would have affected the overall outcome of the election or not. It still creates an uncomfortable gray area for all parties involved, blockchain removes these limitations through secure, power transaction and verified voting methodologies.

Now this is just one example of a use-case for a blockchain without a block, and there are many other potential uses, such as creating a blockchain without a block that is used to securely store thousands of important documents that shouldn't be lost if a single hard drive fails. Voting is a very important function on the Cardano blockchain, and if Dapps could develop different voting methods, it could serve as a sustainable use case for scaling up to use the network for larger based voting measures. For example, small communities could use the blockchain to cast their votes on various topics, businesses could use it, and there would be a record of what was voted on stored on the blockchain network.

In addition to these uses, there is also the ability to use different hashing methods for the same block, which means that a chain like this could potentially use both a Proof-of-Work and Proof-of-Stake at the same time. We have written extensively about the benefits of hybrid Proof-of-Work and Proof-of-Stake , and this would be an excellent opportunity to implement such a system. When you are developing a concept like this, it is important to think about possible problems and how to solve them. One potential concern is that the chain might be bloated with various types of transactions and proof-of-work hashing that it actually doesn't serve any purpose and doesn't work. While this is certainly a possibility, there are some important factors to keep in mind. First and foremost, we see the benefits of such a chain to outweigh the potential problems. More people using the chain means more nodes which improves security. More people using the chain means heavier decentralization of the chain which also improves security. In addition to these factors, the design of this chain would allow the proof-of-stake network to be used for only a portion of the blockchain, which means that we can address scalability concerns without having to worry about a bloated blockchain.

While this may not be possible depending on the progress of such a Sharding implementation, it could be very beneficial to implement a system where only the master node is required to have the entire blockchain in order to verify transactions. This would allow the light nodes to load the header of the blockchain and verify it asynchronously to the network. As a result, they wouldn't need to have a copy of the entire blockchain and this would save space on their devices, allowing for more people to run a master node and ensuring that the network stays secure. The next concern we would like to address is about centralization of full nodes. While it is true that as blockchains get bigger, it takes more space and time to run a node. This does not mean that people won't run a node if the benefits outweigh the costs. You see, if this blockchain is used on a daily basis by various individuals, businesses and other entities, then it is quite possible that having a full node will be beneficial to users.

 

Disclaimer

I'm not a financial advisor, I'm a student writing about my own financial journey through cryptocurrency. The information in this article was written based on my opinion and what has worked for me so far. In almost all cases you should always talk to a financial advisor before making any type of investment. I am not liable for any monetary damages caused by reading this information.

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Carded0421
Carded0421

Cool Guy, does stuff.


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