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The space and industry of the crypto world are undergoing a major change phase. This world was never going to be nuts. Crypto space has occupied a prominent place in the transaction world. The door to the crypto space. Several things need to be upgraded as per the requirement.
Till some years ago, crypto space was using a consensus rule known as Proof of Work (POW). POW provided security and reliability during the mining of nodes. However, there were some limitations like massive energy consumption, low accessibility of mined data, etc. which led to the thinking of some other alternatives too. The new consensus protocol was named as Proof of Stake (POS). Too much destructive for crypto space.
New safety and legal challenges:
POS is a new consensus algorithm and has been set up to protect the security and trust as provided by POW. And if these are avoidable, then they are not a problem, but in case, they are not preventable, no one in the crypto space would wish to take the risk and the privacy wallet and crypto account. Thus, using POS may lead to some unknown security breaches in the crypto industry.
The problem of Monopoly in POS:
In POS, the network is authorized and controlled by the stakeholders having a majority of the stake. They can control the financial as well as a professional system. This leads to the problem of monopoly in the market of crypto space. The significant stakeholders can make an important decision without informing the developers, designers, financial. If the decision is in right directions, then there is no problem, but if they start to decide to fulfill their greed, this will affect the other in the network. This may be a centralized form of the crypto network, which in some cases is preferable while non-acceptable in few cases.
The problem of 51% stake:
It is possible that a cluster of small and medium stakeholders join together and gather 51% of the total stake. In that case, as for POS, any stakeholder having 51% of the entire stake would be the major and control the network. These clusters of stakeholders can control those with even 49% of the total stake. Also though to gain 51% of the entire stakeit is achieved then it will become the most superior and will make as their slaves. And apparently, the crypto industry will not accept this kind of possible scenario.
The possibility of losing 'vote' in the network if hacked:
If your wallet is hacked and you are using POW protocol, you will only lose your coins, but your 'value' in the network will remain the same, i.e., you will have your mining control still. If you are using POS and your account is hacked, then your coin would be lost as well as you would lose your value in the network too. This means you would lose your authorization and control over the network. POSSIBLE CASES OF POW, but is more prone to forget everything in the case of hacking.
Inefficient solution to initial distribution:
Proof of Stake, in which the amount of the problem of the efficient algorithm for initial distribution. In a team, how it should be the same who will be getting the coins up to stake them, this problem may lead to conflict among the team members. This problem needs to have an optimal solution.
Nothing at Stake's problem:
Ideally, if you have two forks, you will select the best fork for you and will continue, but in POS, the situation is not same. Here, the fork may you choose all the chain for you This problem may have devastated the crypto network. This type of problem was not possible in POW where the factor of computational complexity was not ignored, hence, complexed and costly chain were left but
Conclusion:
The crypto space is affected by three factors: Security, Decentralization, and Scalability. It is almost impossible to present an efficient solution to all three at the same time. Proof of Stake, although it tries to solve the problems of decentralization and scalability. This article explains the reasons for the crypto space and there must be alternatives or efficient solutions to accept proof of the standalone consensus algorithm for the crypto market.
