What is Proof of Stake - Explained in Detail (Animation)
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- čas přidán 27. 07. 2024
- Learn all about Proof of Stake in this animated masterclass that explains the concept in detail.
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00:00 Intro
00:13 What are Consensus Mechanisms?
Proof of Work and Proof of Stake are both “consensus mechanisms,” which are methods for maintaining the integrity of a blockchain.
Consensus is what solves the problem of "double-spending." If a cryptocurrency trader could spend coins more than once, the entire system would be jeopardized and susceptible to theft.
00:52 Proof of Stake
Proof of Stake is similar to Proof of Work: both are used to attain consensus and keep the underlying blockchain secure. But there is one important difference: Proof of Stake requires far less work to validate data blocks and thus requires less energy.
In Proof of Stake, there is no race amongst the nodes to validate a transaction.
Instead, they now take part in a “lucky draw” whose winner is decided by the blockchain itself. The winner then validates the transaction and gets a much smaller reward for having consumed much lesser electricity.
02:02 How Proof of Stake Consensus Works: The Details
The Proof Of Stake method selects a node to be the validator of the next block using a pseudo-random election process based on a combination of parameters such as staking age, randomization, and the node's wealth.
As the Proof of Stake name implies, nodes on a network stake a certain amount of cryptocurrency in order to become candidates for validating new blocks and earning the fee associated with them.
04:39 Security of Proof of Stake
The stake in Proof of Stake acts as a financial incentive for the forger node to avoid validating or initiating fraudulent transactions.
05:25 Features of Proof of Stake
-Fixed Number of Coins:
-Transaction Fees as rewards
-Impractical 51% attack
06:34 Advantages of Proof of Stake
-Energy-efficient
-Truly decentralized
07:15 Disadvantages of Proof of Stake
-Oligopoly with validators
-The Nothing at stake problem
#proofofstake #masterclass #slance
Man, I can't even imagine that a channel with 1.11k subscribers and no fancy clickbait has by far the best video on youtube on this topic. All you need to do with this level of skill and animation is to launch a full-fledged course on blockchain. Subscribed, shared and thanks for the content.
Thank you kindly, Anirvan. Feedback like yours is much appreciated. Gives us fresh energy to keep producing!
this is so true, by far the best video on CZcams about proof of stake.
Agreed
But howwwww, how do the other nodes check if the validator cheated? What does it look like for the validator to attempt to cheat? How does the system take the stake away if found guilty? How does the swarm agree that a validator is guilty? So stakes have to be more than the value of all the coins being transacted in that block?
It's a consensus mechanism. I believe all the computers in the swarm check the transaction but only one is rewarded. You might wait for more answers though
I have a theory...
When a new block is created, the swarm does a little of their own check on a random transaction. If something is off, they shout it to everyone, and everyone checks that transaction, which then prompts the next validator to add a penalty. The swarm knows this person was penalized, because the validator needs a large amount of the swarm to flag it.
@@syntaxicalecho8281 education is so bad on this that we are making theories and guesses about decentralised public software
@@keptleroymg6877 yo it's public?
Ok thanks to @keptleroymg6877 I used my brain and went to Wikipedia, and one approach to solving the problem was having multiple validators, who each propose a block, with the others voting on it.
Excellent video my friend. Cant believe you only have 1.4k subs. The quality is incredibly high! (Subscribed)
PoW mining pools aren’t actually centralising. When I mine bitcoin with my own ASICs I can point that hash rate to any pool. If I want to change pools it takes a minute or so. A mining pool is just another type of node. Any corrupted mining pools will have hashrate redirected pretty quickly.
this channel is sooo underrated
Thanks Dafiul, much appreciated. Let's see where we're at in 12 months from now!
@@Slance so what device do you need to validate do we need gpu?
@@Slance just 3 months more common buddy keep moving
Easily the best video I’ve seen explaining PoS
Best explaination of proof of stakes. TQ
Really good video! Thanks!
Very good production! Now I am more prepared to explore this technology
bro great explanation tomorow is my BCT exam, It helps a lot thanks
Outstanding job
nice piece of detailed information bro
Really good video. I just came here to find answer for my question, in proof of stake where are the hardware that computes the transactions. is there a serverpark at the teams hands or the validators have them?
Exactly what I was wondering with one little modification , I can't seem to find an explanation as to what is the process for verifying transaction , what happen do validators have to do something particular , is it a program verifying transactions ? I'm confused about all this
I suspect the validation of transaction involves checking if the public key supplied can decrypt the transaction message signed using the private key...and then the decrypted message is hashed to compare with the hash value which was created before the message was signed using the private key. If the hash values do not match then the message has been altered and its discarded i think. But if they match, then its added to the block....all those checked messages are then hashed again as a form of signature by the validator and the block is added to the linked list of blocks linked using hash values of each preceding block. What i am not sure of is how the double spend problem is prevented using Proof of Stake consensus..
Excellente content, and well explained, this channel will be huge, just give it time and patience like every new project! keep working
Much appreciated, Andres!
How to identit good contract pool
Nice
I don't understand how it works in the case of e.g. blockchain wholesale trade in spare parts or container sea transport, everywhere it's just about coins. How is it? Fraudulent lose some brake pads?
I watched this a second time and it makes more since now. Thank you. I’m wondering why can’t AI verify each transaction instead of a node ran by a human? They can program it not to cheat or steal and reduce the impact on the power grid by assigning scattered lower power using computers that are dedicated to the coin. I don’t buy crypto because the fees are too high to make it worth having. If fees were close to zero it would be more attractive to average people. I’m just a dummy though. Just looking for an explanation. Thanks again
Humans don't do any of the validation manually, they volunteer their computers (or purchase specialized computers) to participate in the blockchain network. A "node" is just a computer that is running the software which validates transactions. Whether that software is an AI or not doesn't solve the cheating problem. Someone could simply decide not to use the AI or other standard software and write their own cheating software. This is why blockchains need a consensus algorithm like proof-of-stake or proof-of-work to prevent fraud. All of the nodes need a way to verify that none of the other nodes are cheating. People can't simply trust that every node on the network is using fair software and hence a trustworthy node.
To your point about using low-power devices, those do exist, but the fact that proof-of-work is inherently costly in energy, because, to put it simply, it requires all nodes to verify the same blocks simultaneously, even though only one node will ultimately succeed. That means most of that energy was "wasted," in the sense that the majority of that computation did not result in a change to the blockchain. But, the process as a whole keeps the blockchain virtually impossible for a single entity to control.
The only thing i dont understand is the problem of nothing at stake if anyone can explain then please do
The answer is NO - Proof of stake is NOT better …
Perfect explanation, impossible..
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PoS is interesting but I’m concerned that we’re sacrificing energy usage for privileged validators taking a hold because they can afford to enter the “contest”. It creates a “class” system that awards the ones with a bigger stake in the system. Curious….
True, but if you think about its the same case in PoW. The richer nodes can afford more hashrate and therefore can outpace the rest of the network. Both PoW and PoS have this "class" issue, but at least PoS reduces energy consumption massively.
@@muskymetal3277 Yeah, you do have a point. We'll need to work on that. Hmmm...
No it’s not that similar actually. PoW is like hiring security guards to protect you. Miners provide a real service in return for payment. It’s not that easy to get rich as a POW miner because it’s actually function of their ability to manage their business well. They have to consistently find cheap energy, invest in new hardware, keep up with locals regulations and tax laws - ie they are constantly optimising their operations. It’s a brutal business to be in and margins are thin esp in bear markets. Further, bitcoin miners are forced to sell their earned bitcoin to pay for their costs thus ensuring distribution of bitcoin to the users.
Meanwhile PoS validators are more like lords who own the land and get richer over time by simply staking their capital. They don’t have to do any real work and they’re not forced tk sell their earnings. So of course there will be much more inequality in a proof of stake system.
@@anthonyriseley Got it. Thanks for the input, Anthony.
I’ll stick with poW
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Creating money for free is ridiculous, complete nonsense. It should be difficult to create value in order to make it valuable. Simple science.
Proof of Stake is simply that the rich get richer🙌🤮
If you think about it, it's not any different from pow in that sense. Or how things actually work in real life.
Fantastic video succinctly saying what others take a long time to cover or don't cover at all. However i am still looking for a more technical explanation in video form. Even things like the Berkley class videos seem very surface level, so i guess im letting you guys know there is at least one person in the market for a deeper more technical kind of thing. Learnmeabitcoin does the best job I've found but they stopped posting and only has bitcoin videos nothing PoS.
Proof of Stake is a waste of time.
This kind of sounds like bullshit, of course I don’t like what I can’t understand; however, what is the underlying authority under these? What if someone were to be accused of duplicating their wallet and lose their stake even though that it’s self was a fraudulent transaction that the “minor/verifier“ was not aware of? That doing this properly has new guarantee
The protocol is a consensus mechanism, and the decision is made by the algorithm. So there is a very low chance that it accuses someone who did a fraudulent transaction by accident.
but... why's it gotta be BLACKchain, huh? yooooo...😕 NOT cool. (LOL, sorry I had to...)
PoS is interesting but I’m concerned that we’re sacrificing energy usage for privileged validators taking a hold because they can afford to enter the “contest”. It creates a “class” system that awards the ones with a bigger stake in the system. Curious….