Phore Blockchain and Staking
What is Proof of Stake and how does it work with Phore?
The Phore Blockchain Proof of Stake (PoS) network relies on a system of masternodes and staking to validate transactions, add new blocks to the blockchain, and keep the network decentralized and secure. Staking is a critical part of the system, and almost everyone who owns Phore (PHR) can, and is, encouraged to participate. So, what exactly is staking? How does it work and why would you want to “stake” with Phore?
First, we need to understand what staking is. Staking is how the network validates a block (or series) of transactions. If “Joe” sends “Sue”, 25 PHR, the network, without a middleman, confirms that specific transaction is valid. In fact, every single transaction must be validated by the network. When transactions are validated, it is called “network consensus” and with blockchain technology, the network must always balance. The Phore Blockchain network creates 60 blocks per hour, or about one block every minute.
Masternodes on the Phore Blockchain network also serve to validate transactions but in addition, perform governance functions. Governance functions include voting with the community of other masternode owners on important decisions that drive the future of the project, including budget expenses and technology implementation. To host a masternode, a set amount of coins must be “locked” in place and requires a more complex setup than staking. Staking does not require any coins to be locked up.
In exchange for staking, participants are rewarded with newly minted coins. So, if a person stakes on the Phore Blockchain network, they are rewarded with PHR coins for each block of transactions that they validate. The more PHR that a person holds in their wallet, the more block rewards they will earn through staking. A person can increase the number of rewards received by simply adding more PHR to their wallet.
Proof of Stake networks are more environmentally friendly than traditional Proof of Work (PoW) networks like Bitcoin. As mentioned above, PoS network blocks are validated and rewarded based on the amount of coins a person holds, versus how much hash power a PoW mining operation has. Standard PoW mining operations utilize a lot of energy and computer power to “win” blocks. Staking can be done with a regular home computer, an average internet connection, and does not require sophisticated technical knowledge, special processors or equipment.
Other benefits include supporting a more decentralized and secure network, because more individuals can, and do participate. The more participants a network has, the more decentralized it becomes. Security is increased because an attack on the network is less likely to be successful. More and more blockchain networks are converting to a PoS system, which is a far more energy efficient and secure system. We expect this trend to continue.
Why would you want to participate in staking? The biggest draw is the ability to earn more PHR over time. Even small amounts of PHR held in a wallet will earn block rewards and increase your holdings. All you need to do is store your PHR in an official Phore desktop wallet, and leave the wallet open and connected to the internet. That’s it. You will earn PHR, just like interest payments at a bank. You will also play a critical role in network decentralization and security.
Phore Blockchain is an exciting and quickly growing project. If you haven’t already, we hope you join our inclusive and supportive community. For more information on Phore Blockchain, visit phore.io.