((("alt coins","consensus innovation")))((("consensus","innovation")))Bitcoin's consensus mechanism is based on proof of work using the SHA256 algorithm. The first alt coins introduced scrypt as an alternative proof-of-work algorithm, as a way to make mining more CPU-friendly and less susceptible to centralization with ASICs. Since then, innovation in the consensus mechanism has continued at a frenetic pace. Several alt coins adopted a variety of algorithms such as scrypt,((("Blake algorithm")))((("Groestl algorithm")))((("scrypt-N algorithm")))((("SHA3 algorithm")))((("Skein algorithm")))((("X11 algorithm"))) scrypt-N, Skein, Groestl, SHA3, X11, Blake, and others. Some alt coins combined multiple algorithms for proof of work. In 2013, we saw the invention of an alternative to proof of work, called _proof of stake_, which forms the basis of many modern alt-coins.
((("alt coins","consensus innovation")))((("consensus","innovation")))Bitcoin's consensus mechanism is based on proof of work using the SHA256 algorithm. The first alt coins introduced scrypt as an alternative proof-of-work algorithm, as a way to make mining more CPU-friendly and less susceptible to centralization with ASICs. Since then, innovation in the consensus mechanism has continued at a frenetic pace. Several alt coins adopted a variety of algorithms such as scrypt,((("Blake algorithm")))((("Groestl algorithm")))((("scrypt-N algorithm")))((("SHA3 algorithm")))((("Skein algorithm")))((("X11 algorithm"))) scrypt-N, Skein, Groestl, SHA3, X11, Blake, and others. Some alt coins combined multiple algorithms for proof of work. In 2013, we saw the invention of an alternative to proof of work, called _proof of stake_, which forms the basis of many modern altcoins.
Proof-Of-Stake is a system by which existing owners of a currency can "stake" currency as interest-bearing collateral. Somewhat like a Certificate of Deposit (CD), participants can reserve a portion of their currency holdings, while earning an investment return in the form of new currency (issued as interest payments) and transaction fees.
Proof of stake is a system by which existing owners of a currency can "stake" currency as interest-bearing collateral. Somewhat like a Certificate of Deposit (CD), participants can reserve a portion of their currency holdings, while earning an investment return in the form of new currency (issued as interest payments) and transaction fees.
myarbrough@oreilly.com
10 years ago