Proof of what? : You'd never have imagined protocols like this before. (PoW & PoS)
A blockchain talk on a romantic moon night walk. Read the tale of my analogies as I make her understand Proof of Work and Proof of Stake.
Have you ever admired a moon along with her, while you both talk tech? It was one such rare occasion for me yesterday and was as beautiful as her face light up under the moon light. I was there watching the moon and explaining her Consensus Protocol (I’m going back to that memory, you read our conversation……….)
She: “Mr. Geek! Your explanation captivated me so much that I was surfing the Web to understand more about the technology and I came across a term “Consensus Protocol”, but couldn’t wrap my head around the technicalities. Can you please explain with your analogies?”
Me: “Why not! I’ll give you a real-life example: In your house, how is it decided what to be made for dinner? Your Mom has to make sure everyone is happy. We can say that she follows a protocol to achieve consensus.
Proposal: Mom suggests some dishes or asks other family members their preferences.
Voting: Other members either agree to a dish or suggest their own.
Consensus: Voting continues until everyone in the house agrees on the same dish. This is consensus.
Similarly, in a blockchain network, a consensus protocol ensures that each participating node agrees to a specific piece of data, transaction, or overall state of the system. These are certain rules that every node should follow to participate in the network. And once consensus is reached, the agreed state is final and cannot be altered. It would be very difficult to go to your mom while she’s cooking and asking her to make something else!"
She: "And what about the different types of protocols that I often come across - proof of work, proof of stake, etc?"
Me: "Yes! There are many different protocols, of which some are the most common. I'll tell you about them:
Proof of Work 🛠️
Imagine a game of lottery where anyone can participate without an entry barrier. You can get a free ticket, but to win the prize you must solve a puzzle. This puzzle will work as your proof of work to win the lottery. Let me connect this to a blockchain network:
The Lottery Ticket Holder: Represents each node/miner in the network.
The Puzzle: Complex mathematical calculations that a miner needs to solve first. Miners dedicate computer resources to solve these problems. This process of solving puzzles through computations is called mining.
Validation: Once a miner believes they've solved the puzzle, they present the solution to the blockchain network to check for correctness. And are rewarded the native token of the chain of correct.
Proof of Work was once the most used protocol in the industry standardized by Bitcoin. Due to it’s shortcoming many chains have shifted to Proof of Stake but Bitcoin still runs on PoW.
Proof of Stake 🗒️
Let’s modify the lottery rules. Now, you must pay a fixed amount, say $100, to participate. The more you pay, the higher your chances of winning. There’s also random selection of who can solve the puzzle.
The Lottery Ticket Buyer: Represents a staker/validator in the network.
The Puzzle : There’s random selection amongst the stakers and the one who staked more will have the higher chances to be chosen to solve the puzzle.
Validation : Once a validator believes they have solved the problem. They present the solution to the network for validation. And if it’s correct they are rewarded but if they try to cheat, certain amount is deducted from their stake. This method incentivizes loyalty.
Last year, Ethereum migrated to proof of stake. As you can see, PoS is better than PoW. Instead of nodes competing to solve puzzles and wasting energy, the system randomly selects validators based on stake to add blocks."
She: “You’re a genius! This is the best moonlit walk explanation ever!”
Stay tuned for our next newsletter, where I unfold more analogies on our trek (yes! you boy is going on a trek with her) and the decentralized dating adventure continues...
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Linea Airdrop : Here