Digital currency depth analysis of the difference between Pos and POW in block chains

Block chain enthusiasts (qq:53016353)

What block chain is POS and POW


If you are a veteran Bitcoin miner or businessman, you must have heard of POW and POS, but currently in the country, but few people understand what this is exactly what the meaning of the block chain, and almost no relevant Chinese materials, small edit vomiting blood writing, is to let everyone better understand these concepts.

After reading this article, I believe that you will understand that the original, virtual currency in addition to mining, there is interest.

The first paragraph: the concept of popular analysis

POW: Full name proof of Work, work certificate.

This is what the block chain means. That is to say, how much money you get depends on the effective work you're digging for, that is, the better your computer performance, the more mines you'll have to give you, and that's how you perform the distribution of money according to your work certificate. Most virtual currencies, such as Bitcoin, the Wright dollar, and so on, are based on the POW model of the virtual currency (the higher the calculation, the longer the mining time, you will get more money).

POS: Full name proof of Stake, equity certificate.

This is what block chain meaning. In short, it's a amount and time depending on how you hold the currency, to give you a system of interest, in the equity certificate POS mode, there is a noun called currency age, each currency produces 1 yuan a day, for example, you hold 100 dollars, a total of 30 days, then, at this time your currency age of 3000, this time, If you find a POS block, your currency age will be emptied to 0. Every 365 coins you have been emptied, you will get 0.05-dollar interest on the block (which can be understood as an annual interest rate of 5%), then in this case, interest = 3000 * 5%/365 = 0.41 coins, which is interesting, the holding currency has interest, very good. (Note that 5% of the annual interest rate is only a small part of the example, not every POS mode of the currency is 5%, such as the point of currency ppcoin is 1%-year interest rate)

Second paragraph: Market POS and POW Currencies

We have learned the concept of POS and POW, and then we look at the current market currency, which support POW, which support POS.

The answer is: In addition to the point of the currency Ppcoin, new Star Novacoin, yacoin the three electronic money using the Pow+pos combination of the model, the rest of all the currency has only adopted the POW mode, but not the use of POS mode.


Point currency Ppcoin First Realization POS (annual interest rate 1%)

The concept of POS, first mentioned in the Bitcoin project, however, in subsequent implementations, the Bitcoin development team considered its robustness untested and did not implement it into Bitcoin systems. Until August 2012, a call point Ppcoin (PPC) of the electronic money appeared, only to realize the POS, which is ppcoin the core elements of fame, ppcoin both support the POW model of mining income, but also provides the POS mode of interest income. At that time Ppcoin to their currency set a 1% annual interest rate, and achieved a good market response, many users hoarding ppcoin to obtain interest.


New Star Currency NVC POS (annual interest rate 5%)

However, because POS is difficult to be understood by the world, and the attraction of 1%-year interest rate is very low, the subsequent emergence of new electronic money, little use of POS mode. In February 2013, a Russian research and development team released the second new currency Novacoin (NVC), which uses POS, NVC further optimizes the algorithm (using scrypt), making it faster to trade and revising the annual interest rate to 5%. Novacoin's two modifications have been successful, making each currency worth more than the king of Shanzhai money, known as the silver Currency, LTC, the Wright dollar. Small series, a Wright currency LTC equivalent to 0.021 bitcoin, and a new star currency NVC is equivalent to 0.033 bitcoin.


Third POS currency--yacoin (annual interest rate 5%)

May 2013, the third use of POS mode of electronic money release, it is the currency, English name Yacoin, referred to as YAC. On the basis of the new star currency NVC, the YAC has made significant breakthroughs and innovations, it uses a new Scrypt-jane algorithm, one of the characteristics of this algorithm is a strong dependence on the CPU, before this, all the electronic money has appeared, more dependent on the graphics card chip GPU mining operations, The use of GPU for mining is far more efficient than CPU. And the YAC broke the situation, its new algorithm in the use of CPU operations, more efficient than the GPU, which has been a lot of users without good graphics card strong support, with a good user base. As a POS-supporting electronic currency, the YAC and Nova NVC provide an annual interest rate of 5%.


The fourth one is here--Cosmic currency Cosmoscoin (annual interest rate 1.5%)


The universal currency CMC is the fourth model of electronic money using POS mode, although CMC and CNC look like brothers from the name, but in fact they do not have any block chain relationship, because CMC can be better than CNC is too much. CMC in the NVC on the basis of new trading message function, the use of scrypt algorithm to enhance the difficulty, production of only 5,040 per day, scarcity is obvious, in the cottage currency, the value of relatively high, you can try to mining storage. CMC and the previous 3 POS currencies are not all annual interest rates, it provides a 1.5% annual interest rate.

The third paragraph: the design idea and origin of POS

The design concept of POS comes from the consideration of the special currency crisis, for three reasons:

First, as we all know, Bitcoin's block production will halve every 4 years, in the near future, as the production of bitcoin blocks becomes less and less, the power to mine will continue to decline, the number of miners is dwindling, and the entire Bitcoin network may become paralysed (since everyone has reduced the time to run the Bitcoin client, It becomes increasingly difficult to find a Peer-to-peer node to connect and synchronize network data.

POS Solution: In the POS system, only open the Wallet client program, you can find the POS block, will receive interest, which prompted many people do not want to dig mines, will often open their own wallet client, which helped the Peer-to-peer monetary network robust.

Second, several years later, as the number of miners declines, Bitcoin is likely to be attacked by a number of high power people, or teams, or pools, causing the entire Bitcoin network to crash. 51% attack in simple terms, when you have more than 51% of the world's Bitcoin, you will be able to forge any data in the Bitcoin network, such as you forged you have 1 million bitcoin but in fact you do not. (Expand reading: What block chain is 51% attacks)

POS Solution: In the POS system, even if you have 51% of the world's power, you may not be able to carry out 51% attacks, because a part of the currency is not generated by mining, but by interest (interest in the POS block), which requires an attacker to hold more than 51% of the world's money. This greatly increases the difficulty of the 51% attack.

Third, while we know that Bitcoin is a system that will never be inflationary, because the amount of money on the surface looks fixed, do you know that Bitcoin is actually a deflationary system. Because, when we reload the system, or forget the wallet key, we will never be able to get back the money in our wallet, which means that every year there are some bitcoin that will be locked up with the loss of the wallet, which creates a substantial deflation, and perhaps 50 years later, there will be only 10 million valid Bitcoin.

POS Solution: Provide a certain annual interest rate, as far as possible to ensure neither inflation nor deflation.

From the above 3 points we can see that the POS system is a new building on the basis of the POW system, has a very long-term insights and advanced ideas.

Fourth paragraph: How to obtain the interest generated by POS

There are a lot of concepts, a bit like a textbook, but in this paragraph, we have to talk about how to get the pos interest, this should be the most concerned about the issue.

It's very easy to have a wallet without encryption, if your currency is placed in your wallet for more than 30 days (because the POS system does not pay interest within 30 days because of less than 30 days of interest), then when you open the Wallet client on the 31st day, you will receive interest on an annual interest rate, of course, You may be on a business trip for 6 months can not surf the Internet, 6 months later you open the Wallet client is no problem, the longer the more interest, it is fair. But you may not be able to transfer your money within the first few hours of interest, because the system needs to lock up your money for the confirmation and calculation of interest. (The actual algorithm step is more complicated, but the small part all will it colloquial, this helps friends to understand). When you get the interest, all your coins will be emptied and your currency will be counted back from 0 so that you can get interest again in 30 days.

If your wallet is encrypted, it's going to be a bit of a hassle, but it's not the focus of this article, but if you want to know how the encrypted wallet client gets the interest, click here to read another article in the small book, How to get the POS interest on the encrypted wallet.