Consensus Mechanisms play a vital role in cryptocurrencies. This decentralized online Economy has no mediator, single holdings, or Authority of a company, organization, or Individual. Thus, to have a fair trade and to keep all the traders and miners(who have stakes and associations in Cardano) on the same page, there is a need for a specific mechanism on which the majority can Agree. ‘Pos’ is one such Mechanism.
Cardano was created in 2017 by an American Entrepreneur, Charles Hoskinson, co-founder of a well-recognized Ethereum blockchain. Ethereum used ‘PoW’ Proof of Work as its Consensus Mechanism, and Hoskinson was well aware of the pros and cons of ‘Pow,’ Gradually, he looked for a system or mechanism that could dwindle the cons and augment the pros.
‘PoS’ Proof of System decides consensus based on the amount of stake or value, while ‘PoW’ Proof of Work determines agreement based on competition between Minors in Problem-solving within the block. Whoever quickly reaches the solution (Proof) first gets the consensus.
‘PoS’ comes up with various pros. Precise security protocols are induced into Pos protocols. The decentralization is secured as sham practices on the Network are penalized. Ledger maintenance has become comparatively more straightforward as new blocks can be added to the blockchain. PoS can work effectively with low energy consumption, and it is addressed to be cost-efficient.
Cardano utilizes the path-breaking consensus protocol ‘Ouroboros,’ and all the Operations, Interface, and mechanism of Cardano is built on it. It is a superior alternative to PoW, on which Ethereum and Bitcoin were made earlier.
Ouroboros is the first Blockchain protocol which is developed through peer-reviewed research. Helmed as a protocol with high sustainability and energy efficiency, it is led by Prof.Aggelos Kiayias of the University of Edinburg. Cardano and other blockchain coins like Ethereum 2.0, Polkadot, ThorChain, Nxt, Cosmos, and Algorand also use this protocol and its mechanism significantly.
At the nucleus of the Ouroboros protocol are ‘Stake pools.’ They are credible server nodes that are run exclusively by Stake pool operators. Holders can entrust and assign their stakes to these ‘Stake pools.’ Stake pools play an important role in keeping a node running and functioning. It ensures that all the miners and traders can authenticate protocol and that their participation does not depend on their technical experience or availability.
Ouroboros is named after Infinity’s symbol and is considered the backbone of the Cardano Ecosystem beyond the shadow of a doubt. Ouroboros protocol has different implementations, and each performance introduces the protocol discretely. Some of the Implementations are Ourobous BFT, Ourobous Praos, Ourobous Genesis, Ourobous Crypsinous and Ourobous Chronos.
Ouroboros is a dynamic protocol, and we can anticipate further Evolution and better versions of it soon. The benefit it has provided traders in the Cardano Ecosystem is that they can ensure security and leverage faster transactions.
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