Proof of Stake (PoS) Discussion

[svgisawmn]

How does Proof of Stake (PoS) improve scalability compared to Proof of Work (PoW)? What are the environmental advantages of PoS over PoW, particularly in terms of energy consumption? How does PoS contribute to network security? Can a malicious attack be carried out under this consensus? What role do validators play in PoS, and how does staking align their incentives with the network’s stability?

[Churchillvv]

This is frequently asked questions that you can find the answers almost everywhere in the internet including Google. Even though this is community where you seek knowledge there are mere knowledge you can get everywhere you don't have to ask when you can easily get it any where.

btw, PoS is just simplified way to mine whatsoever coin, just like staking you funds go get a percentage of reward from other miners. it doesn't require much computational power like PoW. you can use a small capacity machine to miner while in PoW have need much capacity machines to get any rewards.

In simple terms it's much easier to mine coins like Ethereum, Solana etc than to mine bitcoin. this example explains everything.

[hd49728]

How does Proof of Stake (PoS) improve scalability compared to Proof of Work (PoW)?

Scalability is not related to algorithms, Proof of Work, Proof of Stake. It relates to two other things, block time and security. When you increase one factor, two other factors will be affected in a Triangle.

The Blockchain Trilemma: Fast, Secure, and Scalable Networks

There are Proof of Work blokchains with big block size that is good for scalability like Bitcoin Cash, a scam altcoin, but you can see demands on Bitcoin Cash blockchain is very low, not comparable to demand on Bitcoin blockchain.

In security, it is very worse compares to Bitcoin.

https://howmanyconfs.com/

6 confirmations on Bitcoin blockchain that takes around 51 minutes, will be equivalent to 1,130 confirmations or 7 days and 17 hours on Bitcoin Cash blockchain. Do you see big difference now?

What are the environmental advantages of PoS over PoW, particularly in terms of energy consumption?

For security of your fund, do you pick a safer one or a more risky one?

PoW or PoS is only an algorithm, the bottom line is always your fund safety.

[BlackHatCoiner]

How does Proof of Stake (PoS) improve scalability compared to Proof of Work (PoW)?

If by "scalability", you refer to the ability to handle a growing number of transactions efficiently, then it does not.

What are the environmental advantages of PoS over PoW, particularly in terms of energy consumption?

It is very difficult to succinctly summarize this in a few words, but here's by best attempt: Proof-of-Stake requires no energy (or very little energy), so there's little to say about that. Proof-of-Work, however, is an interesting mechanism. While it does require the consumption of decent amount of energy, it also incentivize on the development and adoption of cheaper energy, like renewable. So, even if both mechanisms produced the same result (which is not true, as Proof-of-Stake is fundamentally flawed), Proof-of-Work may be a net benefit for the environment.

How does PoS contribute to network security?

Those with the most coins need to be trusted on not attacking the network, or need to be trusted on properly protecting their coins in the scenario of a hacker compromising them, and using their votes for his advantage. Pretty much worse security than Proof-of-Work. Also, the "vote pie" can be divided into more pieces, as long as those with the most coins are willing to sell them.

Can a malicious attack be carried out under this consensus?

A malicious attack can be carried out regardless the mechanism.

What role do validators play in PoS, and how does staking align their incentives with the network’s stability?

AFAIK, validators just use their coins to vote on the order of the transactions. The incentive is that, those with the most coins, would rather have the network stable, and not attack it, as that would undermine their wealth.

[d5000]

How does Proof of Stake (PoS) improve scalability compared to Proof of Work (PoW)?

As @hd49728 and @BlackHatCoiner wrote, scalability of a single coin on a chain is normally not tied to the consensus model (PoS, PoW or whatever).

However, I have seen this claim indeed several times, so I elaborate a bit more. In some situations it can appear that PoS is "more scalable", but in most cases this isn't really the case.

First of all, if you have an universe of different tokens (like ERC-20s or memecoins on Solana), at a first glance you could think that you can improve scalability if instead of managing it on a single blockchain with PoW (like Bitcoin) you could also manage these tokens on different independent PoS blockchains, because PoS blockchains "don't waste energy" (or at least less). The more chains, the higher the scalability. However, in PoW a similar concept exists: merged mining. A single PoW can be re-used for Bitcoin and Namecoin for example, or for Litecoin and Dogecoin. So there is no real advantage.

Second, it's a long "scalability dream" of several altcoin communities to split the operation of a blockchain platform (or "coin") into several databases, with all nodes only validating one of these databases or a subset of transactions. So the work for every full node is decreased. This is called "sharding". Sharding apparently doesn't work well with proof-of-work, but on Proof of stake platforms there is some research.

However, as of 2024 there is no working blockchain platform to my knowledge which supports sharding in its originally envisioned form. Ethereum, which has had sharding on its roadmap for more than 5 years, is probably abandoning it.

You can consider "second layers" like Ethereum's rollups "shards". But then you could also consider Bitcoin sidechains like Nomic or tBTC "shards" of Bitcoin, and their centralization grade is similar to Ethereum's rollups, although Ethereum provides a bit more comfort to manage sidechain pegs because of its Turing-complete script language.

Third, PoS algorithms based on BFT principles offer indeed an advantage regarding latency. Nodes need to agree about the transaction set immediately when a block is found, while in PoW a disagreement can occur after several minutes creating a blockchain reorganization ("orphaning" an already created block).

However, this only can reduce the block interval (to a few seconds), not the storage or bandwidth requirements for nodes, and it comes with security and decentralization tradeoffs. A coin like Solana may offer a better latency and higher "throughput" than Bitcoin, but it has very high requirements for full nodes. So you either need to buy or rent an expensive PC or server with 128 GB RAM and excellent, datacenter-grade Internet connection, or rely on a light node. Bitcoin instead follows the ideal that everybody, with a "normal" PC should be able to run a full node.

[IShishkin]

How does Proof of Stake (PoS) improve scalability compared to Proof of Work (PoW)?

In no way. It's a popular myth. It's a wrong question. The correct question is what is "scalability".

What are the environmental advantages of PoS over PoW, particularly in terms of energy consumption?

The same environmental advantages as fiat has over Bitcoin. Fiat currency could printed out of thin air with little to no energy consumption. But when you print fiat and buy goods with it, you indirectly stimulate environmental pollution in various ways.

How does PoS contribute to network security?

It's a wrong question.

Can a malicious attack be carried out under this consensus?

Yes. Any system could be attacked. Check the story of DAO Hack in Ethereum network in 2016 as an example.

What role do validators play in PoS, and how does staking align their incentives with the network’s stability?

They play the same role as a parliament in the autocracy. Validators benefit if they keep up with the line determined the ruling party leader and could be slashed if they fall behind.

[d5000]

Proof of Stake (PoS) offers several advantages over Proof of Work (PoW), especially when it comes to scalability. PoW requires miners to solve complex mathematical problems, which is computationally intensive and limits the number of transactions a network can process per second.

Sorry, this is incorrect (and I could bet I have read a very similar phrase on another website).

The mining process (calculating a hash based on block data) occurs entirely on the devices of the miner. It does not use Internet bandwidth which is the limiting factor for transaction throughput. The "network" has no incidence in mining, as it's not an interactive process where several miners need to coordinate or so.

While the miner also validates transactions (like all full nodes do) and this of course is a process which takes more resources if the throughput is higher, stakers in a Proof-of-stake environment must do the same thing, so this is also not something limiting the throughput in PoW.

The only factor where PoS achieves better results is latency, as I described above. This is however the result of a tradeoff: the validator "in charge" of the block is known beforehand, selected by a process influenced by randomness (e.g. the Follow the Satoshi algorithm). This however also means that PoS depends on the validators always knowing who is a validator, i.e. of the "permissioned" character of the network. In PoW instead nobody needs permission to mine - you simply find a hash or not, and if your hash meets the rules then you can just have started to mine without anybody having "invited" you.