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SAN FRANCISCO, CALIFORNIA—As virtual currencies continue gaining in popularity, project managers and CTOs at banks, supply chain companies, as well as cryptocurrency users are quickly learning the benefits of Proof of Stake being more accessible, ecological and practical for real life blockchain proofs of concepts. To help industries adopt blockchain with higher ease, Applicature recently launched the Proof of Stake Consensus Protocol on Ethereum, a leading distributed public blockchain network.
“Launching AEPoS is a real breakthrough in the blockchain/crypto-industry,” stated Ihor Pidruchny, the company’s CEO. “Implementation of Proof of Stake makes the network more secure and stable during the transaction process by gathering and uniting the stakeholders. Because the network is secured by the owners of tokens, PoS is able to significantly reduce the chance of a security threat.”
Proof of Stake is a blockchain consensus and reward algorithm that distributes rewards to declared economic interests in the game, for example, through the holding of digital assets. Declared interest, in this case, is known as a stake. PoS can easily be used in any industry, including but not limited to healthcare, education, banking, and more.
“It is geared toward people who don’t want to use expensive hardware to ‘mine’ a reward, but those who actually think and care about the environment. So PoS is eco-friendly, too,” stated Pidruchny. “In order to participate in Proof of Stake, a participant simply has to hold a certain amount of coins and put them at stake.”
Proof of Stake is not to be confused with Proof of Work, the algorithm that the network currently uses to determine which transactions are valid and protect it from tampering. PoW is all about mining. Miners get rewarded for solving a block. That block then gets added to the blockchain.
Reports show that Ethereum is showing a strong preference toward PoS over PoW completely. Besides the fact that PoS uses fewer resources, it is less likely to fall prey to security hackers. Another disadvantage of Proof of Work is that mining communities tend to become centralized over time while Proof of Stake communities remain decentralized.
“PoS certainly improves the scalability of Ethereum, because it’s not that scalable at the moment,” stated Pidruchny. “We assume that launching Proof of Stake will help to eradicate this problem along with the plasma framework, escrow system, etc.”
In Proof of Stake, miners are called validators. When there is a block that needs to be generated, each validator deposits their money to the blockchain to get the opportunity to validate or sign the block. With mining, the chances of solving the block depend on the hardware a user has. In PoS, the bigger your stake, the better your chances of solving the block. Validators are rewarded not with new coinage, but with transaction fees. The higher the stake, the more money a person can get.
As for what’s next for Applicature’s Proof of Stake Consensus Protocol, Pidruchny says the company will continue testing, searching and getting rid of bugs, improving its integration and adjusting its scalability to Ethereum.
“Our main goal is to support Ethereum,” stated Pidruchny. “We will also be testing AEPoS’ potential in other industries and adjusting it to customers’ demands. This includes finalization and improving its algorithm.”
To learn more about Proof of Stake, click here.