Klaytn as a Proof of Stake Chain
Crypto Twitter has recently been filled with dialogue discussing the impact of the crypto on the environment, igniting an important debate among the community, so much so, that the topic has been picked up by Google Trends.
To provide the Klaytn community with a better understanding of the fundamentals involved in this debate, we will be diving into the environmental effects of two blockchain consensus algorithms; Proof of Work (PoW) and Proof of Stake (PoS).
What is Proof of Work
PoW is well-tested and used in many crypto projects like Bitcoin and Ethereum. Although its origins can be traced back to the late ’90s, the PoW consensus became widely popular in 2009 when Satoshi Nakamoto created Bitcoin (BTC). The PoW mechanism had represented the only viable way to reach consensus in a decentralized network, which was key in making the system viable. In PoW, information is validated and moved through the chain by a string of validators. These validators are computers with a set validation power, and they consume vast amounts of electricity consequently of having to run continuously to validate transactions This is the reason why many mining sites are being placed in areas of low temperature as due to the increased energy consumption, the low temperature serves as a balancer to the overheating of the general computational system.
However, the high energy cost associated with operating these servers added increased strain on the environment, associated adverse media coverage, increasing centralization of mining operations, and low transaction throughput have determined newer crypto projects to adopt a Proof of Stake mechanism.
What is Proof of Stake
PoS mechanism places the user at the heart of its ecosystem by allowing it to become a validator. In this case, the user has to stake a set amount of tokens as insurance of good working practices while operating a node. The danger of losing the staked tokens as a result of performing an unlawful operation it’s a reason strong enough to keep the nodes abiding by the rules of the network.
The PoS algorithm provides for a more scalable blockchain with higher transaction throughput, and many projects such as Klaytn have already adopted it due to its advantages in terms of transaction cost and energy consumption, which are decreased compared to the PoS algorithm.
As a result, participation in PoW implies a higher cost in terms of computing resources which translates to a higher energy consumption. Comparatively, the PoS consensus takes the groundbreaking PoW technology and tackles it from a different angle, thus bringing much needed improvements to the crypto space.
By abiding by the PoS system, Klaytn reassures its commitment to decentralization and scalability while being less impactful to the environment.
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Kakao’s global public blockchain project Klaytn is an enterprise-grade, service-centric platform that brings user-friendly blockchain experience to millions. It combines the best features of both public blockchains (decentralized data & control, distributed governance) and private blockchains (low latency, high scalability) via an efficient ‘hybrid’ design. Klaytn is secured by participation from numerous highly-reputable brands around the globe, working together to create a reliable business platform atop a robust system of decentralized trust. Klaytn enables businesses and entrepreneurs today to capture value using blockchain technology. Klaytn is the future, designed by GroundX.