Ethereum proof of stake: its counterparty

As the Ethereum community has been anticipating for the arrival of the Proof of Stake consensus mechanism for more than a year, one could start to wonder if it is not losing its competitive advantage to new projects gaining traction in the cryptocurrency sphere.

The main motive for the switch from Ethereum’s Proof of Work to Proof of Stake is the sheer amount of electricity required for the chain to sustain itself. As Bitcoin has already proven (the electrical output rests currently at more than 3 billion dollars per year) — it is important to think of an alternative before the current state of affairs renders the blockchain unsustainable.

One of those alternatives which has been in the pipelines for a very long time is the promise of Proof-of-Stake on the Ethereum blockchain, it would cut down electrical waste by more than 99 percent. This would have been a good outcome for Ethereum, if it was not for the new altcoins racing ahead development-wise and putting Ethereum’s front-runner advantage at risk.

One example of a new development gaining traction is the arrival of the Proof of Diversity consensus mechanism which utilises Time and not electrical output or funds held as collateral to secure the network. A remarkable innovation when compared to Bitcoin and Ethereum.

One chain is already actively utilising this consensus mechanism, dubbed Nyzo. For by the time it took for the Ethereum foundation to come up with how to fix their sustainability issues, Nyzo went ahead and developed an entirely new consensus mechanism which does not care about what’s already out there.

Block times are a mere 7 seconds, blocks can process thousands of transactions and the electrical output is negligible when compared to both Proof of Work and Proof of Stake. Arguably, it has a better protection against 51% attacks by its clever implementation of time into its consensus and verification mechanisms. It also does not fall prey to large shareholders controlling the direction of the network, as is currently the case with masternodes, Proof of Work and the Proof of Stake consensus mechanism.

And now in this case, the technological advancements being developed by the Ethereum foundation put to the challenge. While Nyzo does not facilitate for the execution of smart contracts, the sender data field allows for any type of second layer app to be developed and carried out by those who wish to utilise it.

A mere point of perspective. There is more to it than meets the eye.
Read more about the implications of time and diversity as a currency here.