Proof of Stake
Cardano, Trax, Eos, Tezos, Algorand, Cosmos, Thorchain, Waves, Decred, Qtum
Why should you invest in this Basket?
What are Proof-of-Stake coins?
Proof-of-Stake (PoS) coins are cryptocurrencies that are secured through staking. Users stake their coins for the chance of adding the next block to the blockchain and earning the associated reward. When staking, users effectively use their cryptocurrency as collateral. If they are found to be promoting invalid transactions, their stake is slashed and they lose a portion of their staked coins. Depending on the specific cryptocurrency, normal users either participate in the consensus themselves or delegate their stake to a staking pool.
What are the benefits of Proof-of-Stake?
Cryptocurrencies that use PoS tend to be faster and cheaper to use than their PoW counterparts. In addition, they are much friendlier to the environment, as they consume a much smaller amount of energy than cryptocurrency mining, which is extremely energy-intensive.
What are the downsides of Proof-of-Stake?
PoS models have not been battle-tested to the same degree of PoW models, and there are concerns about the long-term security and viability of various PoS designs. Interestingly enough, none of the top 3 cryptocurrencies (Bitcoin, Ethereum and XRP) currently use PoS, even though Ethereum will transition to PoS in the coming years. As existing PoS cryptocurrencies gain value and prominence, their security models will be under more and more pressure – only time will tell if PoS will eventually become the standard for cryptocurrencies moving forward.
20 June, 2021
20 July, 2021
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