What is the mechanism of proof of rights and interests? Proof of interest (PoS) is a blockchain based consensus that allows cryptocurrency to validate transactions. As a more sustainable and energy-saving alternative to the PoW consensus, proof of equity blockchain has become increasingly popular in the past few years. So, do you want to invest in token of equity certificate? The following content will answer for you.

1、 What is proof of interest?

Proof of Interest (PoS) is a method used by the cryptocurrency industry to help validate transactions. When using cryptocurrency for transactions, the blockchain on which cryptocurrency is based needs to change accordingly. All cryptocurrencies are based on blockchain technology and provide distributed transaction ledgers. The blockchain provides a group of distributed nodes in a decentralized way, and some form of consensus is required to verify whether a transaction occurs to ensure integrity.

The transaction of the cryptocurrency blockchain ledger can be verified through many different distributed methods, which are called consensus algorithms, including PoS and Proof of Work (PoW). These two methods achieve the same result of verifying transactions by adding new blocks to the underlying blockchain of cryptocurrencies. Although the two consensus mechanisms have the same results, they work in different ways.

As a consensus algorithm, PoS uses a verifier with a specific share, which is the minimum number of cryptocurrency tokens on the blockchain. The shares held by the verifier are locked in the smart contract of the cryptocurrency blockchain to help maintain the required number of cryptocurrency tokens.

The verifier will be rewarded with cryptocurrency, usually a new token for PoW work. If the verifier fails to properly validate the transaction, the shares may be exposed to the risk of a reaction action known as a curtailment, thereby revoking several tokens.

2、 Should I invest in certificate tokens?

Among the growing cryptocurrencies, there are more and more lists of cryptocurrencies using PoS as the consensus mechanism, including:

Avalanche (AVAX): Avalanche was created in September 2020 to help develop dApps (decentralized applications).

ADA: Cardano provides the smart contract function, which was founded by Ethereum co-founder Charles Hoskinson in 2015.

Universe (atom): Cosmos was created by Interchain Foundation (ICF) in 2014, aiming to build open source blockchain technology.

EOS: EOS has its own blockchain, which was first released in January 2018 to accelerate smart contracts.

Ethereum (ETH): Ethereum is one of the most widely used cryptocurrencies and will be transferred to PoS in September 2022.

Point Coin (PPC): Peercoin claims to be the first company to implement the PoS method and began to use it in 2012.

SOL: launched in 2017, Solana aims to become an efficient transaction processing platform.

Before considering whether to invest in cryptocurrencies like those above, it is necessary to analyze why this specific asset class may be a good investment. The following sections discuss some of the main advantages of cryptocurrency proof of equity:

1. Energy saving

Bitcoin miners need to solve a complex mathematical equation to obtain a Bitcoin. This process requires a lot of energy, which leads many miners to turn to green energy. Since 2015, the energy demand for mining a Bitcoin has increased rapidly.

2. Growth of consensus

According to the PoS consensus, many blockchains are trying to improve their scalability, while quickly establishing new blocks on the blockchain. In fact, Ethereum has launched fierce competition with the forthcoming alternative currencies such as Cardano, Solana and Algorand, which have all applied this consensus. The popularity of the proof of equity consensus has reached a peak, because Ethereum will upgrade its network from proof of work to proof of equity consensus.

summary

The above content explains the meaning of the certificate of rights and interests, and whether to invest in tokens based on the certificate of rights and interests? The answer to this question. The article also provides several existing rights proof tokens for reference. In general, proof of equity (PoS) is a network consensus used to verify transactions on different blockchains. Whether or not to invest in pos tokens depends on your own will, but in the long run, PoS tokens may be more sustainable.