Limitation of Proof of Stake (PoS) Mechanism
The Proof of stake (PoS) was developed to make mining easier and faster along with efficient use of resources as compared to Proof of Work (PoW).
- Any miner can mine a coin by validating blocks of transactions and this depends on how many coins the node’s wallets hold based on which reward is given.
- So, the more coins the node has the more right it has to validate any transaction and mine the block.
- Even though PoS is more eco-friendly, cheap, and fast than PoW, but still PoS concept has a problem where richer gets richer based on the coins they hold so Proof of Importance has been developed to minimize this disadvantage of PoS.
Proof of Importance (PoI) in Blockchain
Blockchain technology generated interest in the public with its first application, the cryptocurrency Bitcoin developed by Satoshi Nakamoto in 2008. Since then, the application of Blockchain has made great strides in academia, business, and society. Blockchain is a decentralized distributed network in which transactions happening is regarded as safe and verified without any control by a central authority. But since there is a huge volume of transactions occurring there is a requirement for a consensus mechanism running at the core of the blockchain network to establish a common acceptance of the network’s real state among all peers. Among many consensus mechanisms that have been developed Proof of Importance is one such mechanism developed to overcome the shortcomings of the Proof of Stake mechanism developed for the Ethereum blockchain.