We anticipated that following the launch of Crypto TREND we’ve received many requests by our readers. In this issue, we’ll answer the most frequently requested questions.

What kind of changes are anticipated to change the way the cryptocurrency industry is run?

dennisloos.net biggest changes that will impact the cryptocurrency market is a completely new method of verifying block transactions, referred to as proof of stake (PoS). We’ll keep this discussion basic and easy level, but it’s essential to understand the difference and the reasons for this essential aspect.

It is important to know that the core technology used to create digital currencies is known as blockchain. A majority of the digital currencies being used in circulation utilize an authentication process called the Proof of Work (PoW ).

For traditional payment methods it is essential to be able to trust a third party, such as Visa, Interact, or an institution such as the bank or clearing house for cheques to pay for transactions. These trusted organizations are referred to by their name as “centralized”, meaning they keep their own ledger that records the transaction’s history and also the balances on each bank account. They will show the transaction to you , and you must accept the transaction is correct or file the procedure to resolve it. Only the parties in the transaction will be able to view what happened.

For Bitcoin or other digital currency, the ledgers that are used are “decentralized”, meaning everyone connected to the network gets the exact same version. Thus, no one needs to trust a third-party , like banks because everyone has the ability to examine the data. The process of verification is called “distributed consensus. “

PoW specifies what “work” be done in order to validate a new transaction prior to it being included in the Blockchain. For cryptocurrencies the verification process is carried out by “miners”, who must overcome complex algorithmic challenges. As the algorithms become more complex they require that “miners” need more expensive and powerful machines to address the challenges ahead of other. “Mining” computers are usually specialized, typically using ASIC chips (Application Specific Circuits) (Application Specific Circuits) which are more efficient and quicker in tackling these complicated problems.

Here’s how:

• Transactions are then put together in the form of”blocks” “block”.
• Miners validate the validity of each block’s transactions have been verified through solving an algorithm to hash that is often called as”the “proof that work”” issue”.
• A first miner to break through the block’s “proof of work problem” receives tiny sums of crypto.
• Once the transaction is verified, it is saved on the blockchain public of each network.
• As the number of miners and transactions increases, the complexity of resolving the problem of hashing increases.

Although PoW was essential in getting Blockchain technology, as well as decentralized and reliable digital currencies operational However, it has many serious flaws, primarily in regards to the amount of energy which miners expend to fix problems related to “proof of work problems” within the shortest amount of time. Based on the Digiconomist’s Bitcoin Energy Consumption Index, Bitcoin miners consume more energy consumption than all the 159 nations , which includes Ireland. The cost of every Bitcoin grows as more miners trying to resolve the problem with more energy.

The capability to verify transactions has caused numerous people working in the area of cryptocurrency to develop an innovative method of validating the block. The most sought-after method is called “Proof of Stake” (PoS).

PoS is defined as an algorithm. its function is exactly identical to that of an idea proof however, the method used to accomplish the intended objective differs. When using PoS there aren’t miners, rather, the system has “validators. ” PoS is based on trust and the knowledge that those who verify transactions are stakeholder within the process.

instead of using electricity to resolve PoW problems, the PoS validator is limited to validating a specific proportion of transactions which reflect the stake in ownership. For example the owner who owns 3 percent of the Ether allowed can theoretically be able to validate 33% of blocks.

In PoW, the probability of solving the proof-ofwork issue is dependent on the power of your computer. In PoS it’s contingent upon the quantity of crypto that you have within your “stake”. The greater your stake, the higher chance that you’ll be able to resolve the problem. In lieu of winning cryptocurrency currency, the winner gets a payment for transaction.

Validators can stake their stakes by locking in the fund tokens they hold. If they try to damage the network, for instance in creating an invalid block, and then losing their stake, or deposit will be lost. If they comply with the rules and don’t infringe on the rules of the network, but they don’t have any rights to validate the block. In this case, they’ll be able to get their stake or deposit back.

If you’re aware of the main difference between PoW as well as PoS and PoS and PoS, that’s the only thing you must understand. Only those who are looking to become validaters or miners must be aware of the specifics of these two methods of verification. A majority of people who want to own cryptocurrency would just buy coins on exchange, however they would not be involved in the actual process of mining or validation of block transactions.

A majority of cryptocurrency experts think that in order to be able to sustain digital currencies for the long-term digital tokens must be converted into a PoS system. As of the date of this article’s writing, Ethereum is the second largest digital currency just behind Bitcoin the team working on their PoS algorithm called “Casper” over the last several years. It is believed that we’ll see Casper implemented by the end of 2018. This will put Ethereum above the other major cryptocurrency.

We’ve experienced previously in this field important events such as the achievement in the process of implementing Casper could push Ethereum’s price significantly up. We’ll keep you informed with the upcoming editions of Crypto TREND.