Vitalik Buterin, the co-founder of Ethereum, recently spoke about whether there were other projects inside or outside the blockchain ecosystem that were using Proof of Stake [PoS]. He also the key difference in Ethereum’s Proof of Stake [PoS].
Buterin started by speaking about other Proof-of-Stake projects, quoting the example of Tezos as a simpler version of PoS. He further added that PoS “is fairly popular”, however, the PoS which are present in the space is “fairly simplistic”. The co-founder stated that the Foundation is planning on launching a “much more powerful” Proof of Stake in a lot of ways comparison to others.
He further elucidated on how Ethereum’s Proof-of-Stake is going to different than the “simplistic” versions. He said that the simplistic version “basically replicate” the structure of the PoW, wherein the randomness of the mathematical puzzles that people solve with computers is replaced with randomness that gets virtually simulated inside of the blockchain.
“So, you still have structure where get a block and a block on top of a block and on top of a block. And that kind of structure is nice because it’s very simple and very little overhead, but it’s also a terrible because it takes a long time for blocks to come to consensus”
For this, Buterin quoted the example of Bitcoin, wherein there has to be six confirmations which would approximately take an hour for the confirmation of a transaction, adding that Proof of Stake chains “don’t work in a similar way, they basically inherit those weaknesses.”
He went on to say:
“Our approach to proof of stake combines together some of the insights from these older chain based goals of proof of stake with Byzantine false theory […] our idea is to take those algorithms. First of all kind of merge them together with proof of stake and second, we came up with an algorithm that has some intermediate properties between the properties of the older BFD algorithms and chain based PoS.”
Butern further stated:
“So in our case, we have a version of this algorithm that takes longer time to come to a final consensus, but still not too long […] and the benefit that this gives you is that within something like five seconds you get a sort of soft agreements that this block is probably part of the history forever. And then in a couple of minutes that soft agreements operates to a final finale, it’s not going back”
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Bitcoin: Would you rather HODL Bitcoin or trade? ex-CTO of Coinbase opines on investing in cryptos
With the inception of Bitcoin and the advent of altcoins, there has never been a good chance to make quick money by simply investing. The last time such an opportunity was seen during the DotCom bubble. However, scams are also a part of this opportunity which became more than evident during the ICO frenzy of 2017.
Millions, if not billions were lost to the ICO scams, which caused the regulatory bodies like SEC, CFTC, and others to step in to protect investors. As the space matured over time, so did the actual number of projects in the ecosystem; there are more than 3000 cryptocurrencies with different and implied use-cases, which is confusing to most of people in the crypto industry and to the people outside of this space as well.
The ex-CTO of Coinbase, Balaji Srinivasan tweeted in support of the above; how an investor who is not familiar with the crypto space should go about investing. Srinivasan said that there were a few people who can be profitable and can beat the market, however, he added that “buying BTC in crypto” was like “buying vanguard in traditional equities”.
Investing in traditional assets or Bitcoin, for people who are inexperienced should be a longterm investment, hence the best thing to do with Bitcoin is to stack and/or HODL.
The DotCom bubble pushed the innovation to its maximum which led to the birth of massive companies like Google, Amazon, Uber, etc. The same can be said for Bitcoin, which led to the development of Ethereum [ETH], which is the second largest cryptocurrency in terms of market cap. However, Ethereum brought smart contracts to the world, which has further led to the development of dApps and other use-cases.
1) ETH is/was also both a phenomenal investment and a major technological breakthrough.
2) Some other digital assets are very promising; I don’t believe innovation ends with BTC and ETH.
But for the person outside the space who wants exposure, just buy BTC.
— Balaji S. Srinivasan (@balajis) June 22, 2019
The bottom line with the Srinivasn’s tweet thread for the people who are inexperienced with crypto space was to just buy Bitcoins and hold it rather than trading it.
A Twitter user @mskvsk, reflected Srinivasn’s tweet as he replied:
“Buying BTC, dollar-cost averaging, forgetting about it for several years. This is the soundest strategy for most people. #stackingsats”
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