Ethereum: Disadvantages proof of stake
When it comes to cryptocurrencies such as Ethereum, many investors and users are attracted by its innovative intelligent and decentralized contract platform. However, an aspect of Ethereum’s security model was a topic of debate between experts: the proof of the stake (POS). While the consensus algorithm of Ethereum has improved significantly over the years, there are indeed disadvantages of this system that must be taken into account.
What is the proof of the stake?
The proof of miseries is a consensus mechanism used by cryptocurrencies such as Ethereum, Bitcoin Cash and others. Works as follows:
- A knot network checks transactions on blockchain.
- The nodes with several “stakes” (ie, several ether or other chips held in their wallets) have a higher chance of being chosen to validate transactions and create new blocks.
- Validators who successfully create and validate a block are rewarded with new chips, which can be used to “bet” more ether.
Disadvantages proof of stake
While the proof of the package has been improved over the years, its security concerns remain. Here are some of the disadvantages:
- Centralization : In POS systems, validators can become overly centralized around a small group of knots, creating a single point of failure. If this group were compromised, the network could be severely affected.
- 51% attack : The possibility of a 51% attack exists when a group of validators collides to control more than half of the network participation. This can lead to a temporary disturbance of the network, which makes it vulnerable to attacks and exploits.
- Lack of scalability
: POS systems have struggled historically with scalability problems, which can lead to congestion on blockchain and a decrease in transaction flow.
- Energy consumption : The energy required to ensure a POS system is significant, which leads to concerns about the environmental impact of these networks.
- Vulnerabilities : As with any complex system, POS networks are not immune to vulnerabilities. For example, if a malicious actor exploited a vulnerability in the validation process, it could control much of the stakes of the network and could launch an attack.
Vulnerabilities Ethereum
The Ethereum’s POS consension algorithm is considered safer than some other systems due to:
- The delegated proof of the stake (DPOS) : Enter in 2016, DPOS has been significantly improved over the years, with a greater emphasis on decentralization and community control.
- Intelligent contract optimization : The intelligent contract platform of Ethereum allowed the creation of more efficient and safe validation algorithms, reducing the probability of vulnerabilities.
Conclusion
Although the proof of the stake is not inherently safe, it has been improved for different improvements. However, potential disadvantages must be taken into account when evaluating this consensus mechanism. As with any complex system, it is essential to weigh the benefits against risks and to adopt a nuanced approach to ensure these networks.
What can you do?
To mitigate some of the disadvantages proof of stake:
- Choose decentralized alternatives : Consider alternatives such as delegated stakes (DPOS), which offers more decentralization and community control.
- Register and audit your wallet : Keep your wallet software to make sure you have your newest security patches.
- Educate -Ethereum’s POS characteristics : Understanding the strong points and weaknesses of PO can help you make the knowledge of the use of these networks.
Being aware of the potential disadvantages of the stake, you can make more informed decisions when evaluating cryptocurrencies such as Ethereum.