EXPLORING THE EFFICIENCY AND SECURITY OF PROOF OF STAKE MECHANISM IN MODERN CRYPTOCURRENCIES
Keywords:
Proof Of Stake, Proof Of Work, Ethereum 2.0, Cardano, Blockchain Security, Cryptocurrency, Decentralized Finance, Consensus MechanismAbstract
This paper explores the efficiency and security of the Proof of Stake (PoS) mechanism in modern cryptocurrencies, offering a comprehensive analysis of its advantages over the traditional Proof of Work (PoW) system. PoS addresses significant issues such as high energy consumption, scalability, and environmental sustainability, making it a more viable alternative for growing blockchain networks. Through case studies of Ethereum 2.0 and Cardano, the paper demonstrates how PoS increases transaction throughput, reduces costs, and fosters network efficiency. Despite introducing unique security challenges, such as the "Nothing at Stake" problem and long-range attacks, the development of countermeasures like slashing mechanisms and finality checkpoints has strengthened the resilience of PoS systems. With further research focused on improving security, scalability, and governance, PoS has the potential to shape the future of decentralized finance and foster widespread blockchain adoption.
References
King, S., & Nadal, S. (2012). PPCoin: Peer-to-peer crypto-currency with proof-of-stake.
Bentov, I., Lee, C., Mizrahi, A., & Rosenfeld, M. (2014). Proof of activity: Extending bitcoin's proof of work via proof of stake.
Saleh, F., & Vaishnav, A. (2016). A study on the efficiency of consensus mechanisms in blockchain networks.
Eyal, I., & Sirer, E. G. (2014). Majority is not enough: Bitcoin mining is vulnerable.
Kroll, J. A., Davey, I. C., & Felten, E. W. (2013). The economics of Bitcoin mining or, Bitcoin in the presence of adversaries.
Buterin, V. (2017). Ethereum: A next-generation smart contract and decentralized application platform.
Matzutt, R., Hiller, J., Henze, M., Ziegeldorf, J. H., & Wehrle, K. (2017). Thwarting unwanted blockchain content insertion.
Bentov, I., Gabizon, A., & Mizrahi, A. (2016). Cryptocurrencies Without Proof of Work. Financial Cryptography and Data Security, 9603, 142–157.
Kiayias, A., Russell, A., David, B., & Oliynykov, R. (2017). Ouroboros: A Provably Secure Proof-of-Stake Blockchain Protocol. Advances in Cryptology – CRYPTO 2017, 10401, 357–388.
Saleh, F. (2017). Blockchain Without Waste: Proof-of-Stake. Bank of Canada Staff Working Paper, 2017-3.
Eyal, I., & Sirer, E. G. (2014). Majority is Not Enough: Bitcoin Mining is Vulnerable. Communications of the ACM, 57(7), 95–102.
Bonneau, J., Miller, A., Clark, J., Narayanan, A., Kroll, J. A., & Felten, E. W. (2015). Sok: Research Perspectives and Challenges for Bitcoin and Cryptocurrencies. IEEE Symposium on Security and Privacy, 104–121.
King, S., & Nadal, S. (2012). PPCoin: Peer-to-peer crypto-currency with proof-of-stake. International Journal of Distributed Systems and Technologies, 3(2), 1–9.
Kroll, J. A., Davey, I. C., & Felten, E. W. (2013). The Economics of Bitcoin Mining, or Bitcoin in the Presence of Adversaries. Proceedings of WEIS, 11, 1–20.
Downloads
Published
Issue
Section
License
Copyright (c) 2018 Himanshu Sharma (Author)
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
