Vitalik Buterin, co-founder of the popular Ethereum blockchain network, has released details of why proof-of-stake (PoS) is the best for Ethereum.
Ethereum, due to the unprecedented rise in decentralized finance (DeFi) protocols, has had to fast track its long-awaited ETH 2.0 upgrade. One major feature of the upgrade is the network’s shift from a proof-of-work (PoW) to a proof-of-stake (PoS) algorithm. Vitalik Buterin, in a recent post, has put forward three reasons why the PoS consensus algorithm is superior as compared to PoW.
A quick post re-stating the case for proof of stake:https://t.co/viW2EYAXf3
— vitalik.eth (@VitalikButerin) November 6, 2020
1. Proof-of-Stake (PoS) Is More Secure Than Proof-of-Work (PoW) Consensus
To further iterate this, Buterin did a simple calculation of how much it would cost to attack a PoS and a PoW blockchain network.
It is important to note that the PoW blockchain will either operate as GPU-based or ASIC-based.
For a GPU-based network, renting the miner is the only accrued cost, so attacking the network is fairly easy. It only requires a few hours of spending a little more than $1 dollar per day in block rewards. The average total cost of attacking a GPU-based network is approximately $0.26. Over time, this cost will diminish to zero as the attacker will also still receive block rewards.
For the ASIC-based PoW network, the attacker will first need to purchase an ASIC miner. They have a life span of approximately two years before wear and tear sets in. ASIC mining cost is shared as “1/3 ongoing costs and ~2/3