How is Blockchain Staking Different From Mining?

Cardano is a blockchain, and blockchains need transactions to be verified. Proof-of-stake stake is another approach to verifying transactions that require significantly less electricity than the likes of proof-of-work blockchains such as Bitcoin, which require mining. Blockchains require that validators are randomly selected in order to remain secure. So while mining uses proof-of-work (PoW) consensus, which are complex mathematical puzzles solved by computers to create randomness, staking uses proof-of-stake (PoS) consensus, where validators are instead randomly selected based on the amount of stake delegated to it. The reason randomness is required is suppose you know exactly who should verify transactions at any point in time in advance. Then, if somebody wanted to interrupt the service, they could DDos that block producer, effectively stopping them from being able to participate. No attacker has enough resources to DDos thousands of block producers simultaneously. If the majority of validators agree on a proposed block, then the block is added to the blockchain. It’s obviously much more technical than that, but if technical is your thing and you’d like to learn more, you can read more here. So, staking uses less electricity and fewer computing resources than mining. In this way, Cardano’s Ouroborus (the PoS protocol) substitutes mining validators with significantly less resource-intensive delegated validators.

Last updated