THE TRUTH: Proof of Work vs. Proof of Stake & Ethereum’s Transition
What exactly are people in #crypto talking about? Those who know are giving you half-truths or speaking in a language that makes no sense. Those who don’t know, echo and amplify the crumbs thrown by those who do. In this case the “narrative” is being used to steer the direction of the technology. But to what end? And why?
Spoiler Alert: The truth is Proof of Work and Proof of Stake are different. Both have benefits as well as negatives. From these two protocols within the Quantum Financial System and #blockchain, new processes and amalgamations of the two are developing. Blockchain has given birth to ledger technologies; Web2 with its Browsers, Websites and Passwords is becoming #Web3 with Wallets, Tokens and Keys.
So, what’s the difference between a crypto / blockchain project that is Proof of Work vs Proof of Stake? Is ETH 2.0 going to be entirely differently or is this just merely an upgrade? What will happen to all the Ethereum Miners; will they retreat to Ethereum Classic and revitalize this forgotten project/technology?
Directly out of Wikipedia: Proof of stake (PoS) protocols are a class of consensus mechanisms for blockchains that work by selecting validators in proportion to their quantity of holdings in the associated cryptocurrency. This is done to avoid the computational cost of “proof of work schemes.” That is what Business Anthropology identifies as “charged” language. #PoS is a “protocol” and #PoW is a “scheme?” “Avoid computational costs” is very different than saying “lower operational expenses” or “increase ROI’s.”
So, what does “Wikipedia” say about Proof of work: It’s a form of cryptographic proof in which on party (the prover) proves to the others (the verifiers) that a certain amount of a specific computational effort has been expended. Verifiers can subsequently confirm this expenditure with “minimal effort on their part.” This “concept” was invented by…
So, it’s a “concept?” A concept that was implemented/put into practice by the very 1st cryptocurrency Bitcoin; which is still hailed as the champion? This concept is good enough for Bitcoin, the technology and crypto that has become the one all others are compared to, everything else are #Altcoins to #Shitcoins; but it’s a “scheme?” Bitcoin has billions of dollars funneled into it to facilitate a mining process that requires minimal effort?
If you read what is out there in academia to the news; the consensus and overall message you will be told is that Proof of Stake: Good. Proof of Work: Shit. It’s very bad. That’s not true. You are being distracted from the REAL story; especially when it comes to #Ethereum.
According to a report from Arthur Falls, Ethereum venture production studio ConsenSys is facing a billion-dollar audit. This is BIG news, swept under the carpet. A majority of the company’s shareholders, asked for this measure to investigate alleged irregularities at the company. This is ONLY possible because it is/was still “Proof of Work.” To be conducted under the Swiss Code of Obligations, the investigation will focus on an alleged illegal transfer of intellectual property from ConsenSys AG to a new entity dubbed ConsenSys Software Incorporated (CSI). This supposed transfer occurred in exchange for 10% ownership of CSI. In addition, the audit will look into a supposed offer of a $39 million loan from Joseph Lubin, one of the eight Ethereum founders alongside Vitalik Buterin and a founder at ConsenSys. The alleged illegal transaction, Falls claimed, is part of a secret initiative called “Project North Star”.
The purpose of Project North Star was to transfer “an influential stake” in #MetaMask, a popular crypto web wallet, and Infura, an Ethereum infrastructure provider which supports an important part of this blockchain’s ecosystem to JP Morgan and other legacy financial institutions. This supposed illegal transfer took place on August 14th, 2020. And if this is true; as Mel Brooks said: “It’s good to be the King.” Under Proof of Stake, JP Morgan can rule with a level of impunity that others will not enjoy or be privy to. And it is more than likely this investigation will be settled or disappear completely. Proof of Stake is evidence of equity, proof of shares. It’s a redundancy because when you have stake, you always have stake. Here is my bag of gold, you can see it. It’s heavy. Throw it in the vault. PoS has been hailed by many in the industry as an “anti-innovation invention.” This is precisely why Silicon Valley’s biggest machines to those in banking love it. Proof of Stake eliminates any and all competition. In other words and in this case “zero effort;” just have your crypto where it needs to be and committed for a duration of time.
PoS is being hailed as more “environmentally friendly,” but that is not the true motivations nor is it true. Proof of Stake requires nothing for one to make and receive money; other than them already having some of this said money. These stakers have no incentive to grow, no incentive to scale the system. Just dump your 32 ETHEREUM and sit back. It allows for monopolies like Facebook and Amazon to flourish. It allows for only the people/entities who meet a minimum stake or requirement to participate and/or receive the full passive benefits from said participation. Those who have been investing in Ethereum know the power of 32 Ethereum and those who have that amount will be rewarded handsomely. You will be hard-pressed to find a business or piece of real-estate that can generate a passive income stream without having to do anything like 32 Ethereum.
Proof of Work requires work; something to be done. It allows big players to amateurs to “get in the game.” Not only is it more “inclusive;” within PoW every time there is something new, there is an opportunity for change. The opportunity to try something new or go in a different direction. This is why purists believe Bitcoin is no longer “really Bitcoin” and Bitcoin BSV is the truest Bitcoin because it conforms to the early “white papers.” At this moment in time BTC seems to be more “centralized” than “decentralized” and ventured in directions untrue to its original mission.
If history illustrates anything, Proof of work not only maintains a decentralized blockchain securely, as the value of a cryptocurrency grows, more individuals are enticed with tangible incentives to participate. The barriers of entry are minimal. People in developing nations with an equivalent to $100 in computer components can begin to mine; virtually pull money out of the air.
The Helium network is accomplishing this in spades; increasing its overall power, reach and security. The average Helium Network mining machine uses less than $1.50 of electricity per month. It’s not really a mining machine in the traditional sense as much as it is a hotspot; but it collects a very impressive “coin.” Helium has their own process called “Proof of Coverage” or PoC; a novel work algorithm that rewards users for verifying coverage, thus proving location and network connectivity. It coupled existing methodologies to a better advantage/solution that benefits, that empowers “regular” people with little to no technological savvy. That term is still not listed in "Wikipedia."
In the end of all these models, schemes, solutions, protocols- whatever you want to call them one thing is obvious: Big Tech doesn’t lose. What is being ushered in and implemented at an alarming speed, may not necessarily be good for the average global citizen. Much more research and investigation, as well as transparency and clarity must be established. In order to do so, one must be exposed to information outside of the mouthpieces and entities controlling the narratives amongst everything from news outlets to social media. If you'd like to learn more, your window of opportunity to catch a piece of the largest creation and transition of wealth is closing. Sign up for the only ONE on ONE course in Crypto with Business Anthropology's founder Anthony Galima today. Unfortunately, as you try to put all the pieces together, the train has already left the station. For the BEST curated Cryptocurrency News designed with one goal in mind: to empower you; find Hard Fork News on Telegraph.