How Cardano (ADA) plans to unravel the proof of stake

Cardano (ADA) –The positive news of a possible partnership with CoinbaseCardanos ADA benefited from a price hike over the weekend. Investors and enthusiasts are trying to reverse the losses of the 2018 bear cycle, both in anticipation of the purchasing power of Coinbase’s 13 million+ customers and in recognition of what the IOHK team has accomplished in advancing its cryptocurrency.

While the appreciation in price was a welcome change for investors who have suffered a 90% loss in value since January’s all-time high (a number that keeps pace with most of the market losses), the team behind Cardano is more excited about how their innovate Protocol look will bring change to the Proof of Stake landscape. The Cardano protocol, called Ouroboros, is set to reinvent Proof of Stake’s blockchain verification while ensuring the security of user funds.

In April, the founder and CEO of IOHK (the company behind Cardano) tweeted a research paper Praise for his company’s improvements in bringing the level of PoS to the more mature field of Proof of Work (which is what Bitcoin’s blockchain works on).

Of all the work that IOHK Research has written, this is the most important. It is an important advance for Proof of Stake, now PoS has almost identical properties as PoW. Welcome to the age of Ouroboros Genesis

– Charles Hoskinson (@IOHK_Charles) April 26, 2018

As Hoskinson points out in a following tweet, one of the immediate advantages Proof of Stake has over its competitor PoW is the fractional amount of computing power and electricity it takes to secure the blockchain. While Bitcoin and other PoW currencies continue to take hold Headlines Cardano strives to provide efficiency as well as safety in addition to the significant power consumption of miners.

Yes, we don’t have to use more electricity than Ireland to run our system. I didn’t mean to copy that

– Charles Hoskinson (@IOHK_Charles) April 26, 2018

And Bitcoin is still a small system. Imagine a global scale system with billions of users? The feedback loop increases power consumption, not power consumption

– Charles Hoskinson (@IOHK_Charles) April 27, 2018

The basic idea of ​​PoS is that users vote or “bet” their coins in the network, which results in interest in the form of freshly minted tokens distributed at regular intervals for their participation. The protocol provides incentives for a cryptocurrency user base to be active on the network, which makes it easier to facilitate transactions and secure the blockchain without requiring the processor-offloading performance of PoW. Given the looming reality of a world population invested in crypto, PoS is being explored as a more sustainable way to secure blockchains. As the research paper noted above states,

Proof-of-stake-based (PoS-based for short) blockchains aim to overcome the scalability, efficiency, and composability limitations of the proof-of-work paradigm that underlies the security of several popular cryptocurrencies, including Bitcoin.

Up to this point, however, Proof of Stake has remained a largely unproven protocol, at least compared to PoW. Given the market share and length of time Bitcoin has been acting as a currency, PoW has had the time to both mature in technology and prove itself safe for blockchain transactions and consensus. The PoS lacks the same level of litigation, but IOHK believes they have silenced doubts surrounding the Ouroboros operation. Speak with CoinDeskThe chief scientist of the IOHK behind Ouroboros Aggelos Kiayias had this to say about his protocol:

“Opposite to [other proof-of-stake protocols]We developed Ouroboros along with formal security evidence that the protocol actually captures the security properties of a robust transaction book like Bitcoin. “

The key for both IOHK and the development of Cardano was the emphasis on scientific accuracy and the peer review process of the concepts and technologies. This has given the Cardano team an impressive collection of scientists and industry leaders to work with. However, it also presents the company in a verified light – which is in stark contrast to much of the industry. Hoskinson is a regular engagement with the ADA community, in addition to well-known third parties such as Googleis a welcome touch. However, the main attraction of the currency continues to be the belief that the best technology, backed by the best development team, will make it to the top. Time will tell how Ouroboros and the Proof of Stake can transform the landscape of cryptocurrency.

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