Proof-of-stake (PoS)

The proof-of-stake consensus is one way to validate transactions and to add them to the blockchain. With a proof-of-stake consensus, a person will be able to mine a certain amount of blocks according to the coins he/she owns. More simply put, the more coins the person holds, the more blocks he/she can mine.

This kind of consensus is an alternative to the proof-of-work consensus, used in the Bitcoin blockchain for example. It solves the problem of energy consumption inherent to the proof-of-work consensus. The PoS consensus also prevents 51% attacks. Indeed, it is not advantageous for a miner holding 51% of the coins to attack the network.

In addition, the upgraded version of Ethereum also employs a faster and less resource intensive consensus mechanism called proof of stake. Cryptocurrencies including Cardano, Tezos, and Atmos all use proof-of-stake consensus mechanisms — with the goal being to maximize speed and efficiency while lowering fees.

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About Scorechain

Scorechain is a Risk-AML software provider for cryptocurrencies and digital assets. As a leader in crypto compliance, the Luxembourgish company has helped over 200 customers in 40 countries since 2015, ranging from cryptocurrency businesses to financial institutions with crypto trading, custody branch, digital assets, customers onboarding, audit and law firms, and some LEAs.

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