POS and POW evolution path and future development

In 2020, Fengshui will be halved, and there will be many new opportunities and outlets for the mining industry. In addition to the high-profile Bitcoin halving this year, there is another thing that many miners are concerned about, and that is the transformation of POW into POS in Ethereum.

PoS has always been a dream of Ethereum. As preparations for PoS upgrades, Ethereum has also released upgrades for Constantinople and St. Petersburg. At the same time, they are also preparing for the "sharding" network and the implementation of mixed mining of Ethereum pow and pos.

POS (Proof of Stake, equity certification mechanism) determines the profit of mining by the number of coins held. The more you hold, the more you get. POS is the equity that rewards the verifier for verification. Every time a transaction is verified, the verifier is rewarded with a certain percentage of commission. This ratio is determined according to the number of tokens the verifier owns. Pos is an algorithm designed to enable distributed consensus in cryptocurrency blockchain networks.

The Pos consensus is that the holders stake the currency to obtain the right to produce a block, package the transaction at a specified time, and broadcast it. After verification, a new block is generated. Its representative currencies include EOS, TRX, etc. Pos has the advantages of fast confirmation speed and low energy consumption, but its disadvantages are also obvious, such as low security.

At present, many projects are beginning to consider the transformation of POS, and Ethereum is the most typical example.

Many POS-based projects appeared between 2012 and 2014. At that time, the cryptocurrency market was in an upward cycle, and many projects and people were getting rich. Although many people paid for the exploration of the project, generally speaking, there For a period of time, everyone looks good on paper. Numerous studies done between 2014 and 2019 will be verified online in 2020, heralding the opening of the PoS2.0 era.

At the end of 2019, under the PoS mechanism, investors can participate in Staking equity coin mining, and the total economic value will reach 25 billion US dollars. It is estimated that more than 25% of global digital currencies will use the PoS consensus mechanism.

In 2019, Staking has become the mainstream trend of crypto financial innovation. EOS is the most representative currency in Staking.

Staking, like the high-profile topic Defi, shows the original innovation ability of encrypted finance. It is a new opportunity formed by the full arrival of the POS era. The significance of the opportunity is far greater than the concerns about inflation and possible centralization.

In the future, there is no doubt that Staking as a Service will become the core of the business model in the Staking ecosystem. As professional service organizations, they are capable of screening opportunities and isolating risks for token holders.

Everyone is familiar with the mining mode of POW. POW (Proof of Work) refers to how much currency you get, depending on the workload you contribute to mining. The more computing power you have, the more coins will be distributed to you. It can be said that you get rich through labor. Those who win more. Bitcoin mining is done through the POW mechanism. Its representative currencies include BTC, BCH, BSV, LTC, etc. The advantages of Pow are safety and reliability, but the disadvantages are slow confirmation speed, low throughput, and high mining costs.

Pow was born in 2009 and applied to Bitcoin. Bitcoin’s PoW still has a high degree of authority. Most people’s impression of PoW is that it is not fatal except for a waste of resources and a little lower efficiency. problem, and many second-generation PoWs based on Bitcoin, like Litecoin, are highly regarded only because of the reduced block time.

Since the development of the POW mechanism, the provision of computing power is no longer limited to CPUs, but has gradually developed to GPUs, FPGAs, and even ASIC mining machines. Bitcoin mining machines were first upgraded from computer CPU mining to graphics card mining, and now use professional ASIC highly integrated circuit mining machines. While the performance has been soaring, the main network computing power and mining difficulty have exploded.

At present, the largest POW currency is still Bitcoin, and many new POW currencies were born in the entire market last year. On the whole, the POW currency accounts for a larger market share.

The advantage of POW lies in the simplification of the algorithm, and consensus can be reached without exchanging additional information between nodes, but it requires a huge cost to break the system. However, it is inevitable to consume a large amount of computing power, which is also the biggest shortcoming of POW, which is a waste of energy.

Needless to say, the specific needs of Pow mining are inseparable from mining machines, mine farms, mining pools, mining software for graphics card machines, and some even require professional supervision teams, risk control teams, etc. For pow users, mining machines and electricity costs may be the biggest cost.

In terms of mining machines: For example, the official website price of the s19 pro mining machine just launched by Antminer is 188 yuan per ton. Compared with the unit price of 11,000 yuan on the official website of the s9 mining machine, the price per T has dropped by more than 70%.

Electricity fee: The high water season is coming soon, the best time for POW mining, which greatly reduces the cost of POW mining, and this year, the Sichuan government issued a document for the first time to support the high water mining policy to promote the high-quality consumption of hydropower resources.

The halving should be a test for the pow market. Although Bitcoin is the currency with the largest proportion of the POW market, the halving of Bitcoin will not cause fundamental changes in the POW market in the short term. At least it is difficult for us to predict the price of the currency after the halving.

The future market of pow will go a long way, at least in the next 4 years, it will still be the only one, and btc based on pow has gone through 10 years, it has a strong consensus, and it is the most promising "safe haven asset" in the future, digital gold, Therefore, under the leadership of BTC in the future market of pow, there will be more high-quality projects appearing.

In fact, I hope to combine the advantages of PoW and PoS to achieve a system with high security, fast confirmation, large throughput, and relatively reasonable energy consumption. In this way, no matter it is for pow, pos, or even the staking ecology, it will play a very good role in promoting.