Frequently Asked Questions

Proof-of-Stake VS Proof-of-Work VS Masternode
Last Updated 6 years ago

Proof-of-Work was a fantastic innovation that formed the backbone of the original Bitcoin protocol. The idea is that by solving a computationally intensive math problem, one can prove the effort they've done to secure the protocol. The effort that is required to perform these computations contributes to a coin's scarcity and value. However, Proof-of-Work eventually becomes an extraordinarily expensive system. As time passes, the complexity of the problems involved becomes so great that “mining” the last few possible Bitcoin will require the entire energy output of the sun.

Proof-of-Stake solves this issue in a very elegant way. Rather than using computer power as a scarce resource to generate security, Proof of Stake uses the scarcity of the coin itself. A user may choose to "stake" his coins to generate the next block in the chain, and his chance of doing so is basically proportional to the weight of his coins. Proof-of-Stake is Eco-friendly and efficient and avoids the vast waste of energy and hardware overhead of Proof-of-Work based networks.

Masternodes are decentralized servers on the network that runs 24/7 to maintain the health and security of the network. They are used by normal wallets for multiple features. These features consists of Direct send, instant transactions and private transactions. A collateral, a specific amount of coins, is required to be eligible to create a Masternode.

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