Celo Prosper Series: May 22
Hello everybody! On May 22 I was joining Celo Prosper Series in a panel, together with Yevgen from moonli.me, Andrew, founder of Agile Ventures, Kasper van der Valk from Newroad Network and our host Adriana from Celo team to discuss about validation, validators and their role in a PoS network.
We had a small presentation about PoS and I am adding it here so that everyone can read it if he finds it needed.
What validation is?
Validation is the process of securing the networks and achieving distributed consensus for Proof of Stake consensus mechanism based blockchains.
Distributed consensus — the ability to directly trust a stranger without having to go through a third-party that ensures the trust (there is no middlemen involved in any type of transaction)
What Is a Consensus Mechanism?
A consensus mechanism is a fault-tolerant mechanism comprised of a set of rules and algorithms that is used in computer and blockchain systems to achieve the necessary agreement on a single data value or a single state of the network among distributed processes or multi-agent systems, such as with cryptocurrencies (source: Investopedia)
Proof-of-Work (PoW) was the first blockchain consensus mechanism and is still arguably the most popular choice in achieving distributed consensus. It is used by chains like Bitcoin and Ethereum (note: Ethereum is working on transition to a PoS model)
PoW comes with some disadvantages like high computation requirements, high energy costs, hard to scale and the threat of centralisation-by-mining-pool.
This is how the need for a system like Proof-of-Stake (PoS) emerged
What is “stake”?
In crypto-terms, the stake is the amount of cryptocurrency a user owns and pledges in order to take part in the validation process
What is Proof of Stake?
Proof of stake (PoS) is a type of consensus algorithm by which a cryptocurrency blockchain network aims to achieve distributed consensus. In PoS-based cryptocurrencies the creator of the next block is chosen via various combinations of random selection and wealth or age (i.e., the stake). Basically, it asks for users to stake an amount of their tokens so as to have a chance of being selected to validate blocks of transactions and get rewarded for doing so.
Every validator must own a stake in the network. Staking involves depositing an amount of tokens into the system, locking it in what you can think of as a virtual safe, and using it as a collateral to vouch for the block.
The more a user stakes, the better their chance of being selected since they’d have more skin in the game — acting maliciously would see them set back by a greater amount than someone who stakes less.
The second element adds the ‘random’ to the semi-random selection process, although the way in which this is done differs from blockchain to blockchain.
Validators are for the PoS networks the equivalent of the miners from the PoW networks.
One of the most notables differences between the validators and the miners is the social aspect. While the miners need to take care of their hardware and ensure everything is up and running, the validators have also a social component for their activity beside the technical aspects. They need to attract votes and delegations, so they need to be engaged with the community. That brings and additional layer of security and education into the communities since validators are active actors and try to share useful information and also contribute with tools like explorers, wallets, accountability tools and many others.
As you know Celo MainNet was launched last week and it uses PoS as consensus mechanism.
In a Proof of Stake network such as Celo, the role of maintaining and securing the network is owned by validators. Validators work in teams, collaborate with other groups, they are defined at genesis and at later stages of the network can be elected through a community voting process to participate as well.
Celo’s blockchain reference implementation is based on go-ethereum, the Go implementation of the Ethereum protocol
Celo’s consensus protocol is based on an implementation called Istanbul, or IBFT modified and brought up to date with the latest go-ethereum release and it has improved scalability and security and also includes fixes for correctness and liveness issues. More details about Celo consensus protocol can be found here: https://docs.celo.org/celo-codebase/protocol
For any additional question feel free to reach out by tagging @syncnode on Celo Discord or by joining our telegram group.
Remember that you can stay updated by joining our telegram and following us on twitter as well on the following channels:
Telegram: https://t.me/syncnodeValidator
Twitter: https://twitter.com/syncn0de
Blog: https://medium.com/syncnode-validator
Wallet Web Site: https://wallet.syncnode.ro/
