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Ness Labs: Make the most of your mind
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A Summary of

A proof of stake design philosophy

by
Vitalik Buterin
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Why Proof of Stake Protocols Exist

  • Much more expensive to disrupt than they are to use and maintain
  • Even with a 51% attack, no one would trust the network to be legitimate
  • Social consensus isn’t enough--PoS networks rely on economic consensus
  • PoW systems are based on logic where more computing power leads to greater rewards
    • Uses insane amount of power
  • PoW systems are vulnerable to attacks if the network isn’t large enough
  • PoW systems do not favor the defender with the cost of defense and attack being equal

How Proof of Stake systems solve Proof of Work issues

  • Validators, the PoS counterpart to PoW miners, are motivated to secure the network because of a large penalty for fraudulent activity
  • A 51% attack is much easier to recover from
  • Cartels are discouraged from wrongly manipulating the network
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