Whether you are an NFT artist, an investor, or a web 3 developer it is important for you to understand how your desired blockchain validates transactions and created new blocks of information. In this blog post, we will be going over the necessary information required for an eco-friendly proof of stake blockchain to exist and how you can do your part to maintain decentralization in these ecosystems.
Whilst this article is aimed toward the Harmony One community it also applies to other proof of stake blockchains such as Tezos, Cardano, Avalance, and Solana. We will be going over what Proof of stake is, what is the purpose of decentralization as well as its major benefits, and how you can start staking your tokens for passive income and to help the blockchain you are participating in.
Let’s dive in!
What is Proof of Stake?
You know the saying, “there’s nothing new below the sun” so with that in mind check out an excerpt from a great article on Investopedia regarding proof of stake versus proof of work blockchains. I have gone ahead and taken the best points from the article and posted it below for you to read.
“Proof-of-stake is a cryptocurrency consensus mechanism for processing transactions and creating new blocks in a blockchain. A consensus mechanism is a method for validating entries into a distributed database and keeping the database secure. In the case of cryptocurrency, the database is called a blockchain—so the consensus mechanism secures the blockchain.”
- With proof-of-stake (POS), cryptocurrency owners validate block transactions based on the number of coins a validator stakes.
- Proof-of-stake (POS) was created as an alternative to Proof-of-work (POW), the original consensus mechanism used to validate a blockchain and add new blocks.
- While PoW mechanisms require miners to solve cryptographic puzzles, PoS mechanisms require validators to simply hold and stake tokens.
- Proof-of-stake (POS) is seen as less risky in terms of the potential for an attack on the network, as it structures compensation in a way that makes an attack less advantageous.
- The next block writer on the blockchain is selected at random, with higher odds being assigned to nodes with larger stake positions.
“Proof-of-stake reduces the amount of computational work needed to verify blocks and transactions that keep the blockchain, and thus a cryptocurrency, secure. Proof-of-stake changes the way blocks are verified using the machines of coin owners. The owners offer their coins as collateral for the chance to validate blocks. Coin owners with staked coins become “validators.” “
“PoS blockchains often allow for more scalability due to their energy efficiency.”
Essentially proof of stake is the way to go in Web3 because not only is it energy efficient which is a must if we’re talking about technologies for the future, but it also allows a much lower barrier of entry for people to become validators instead of the costly equipment needed to run miners. Here it’s all about the community, and we can see that when we start talking about decentralization and how in the case of Proof of stake the community of any given blockchain is the ones to decide which validators will have the power, instead of the validators themselves deciding through the purchase of bigger and better mining farms.
Why do we want decentralization?
When we are talking about centralized decision-making, we are talking about a system run by only a handful of people. Think of things like the entertainment industry, the banks, or the government. In the case of centralized systems, the rich and powerful are the ones to make all the decisions, looking at Roe V Wade and the atrocious laws passed under the veil of democracy. Yet when we talk about decentralized systems we think more of art collectives, cooperatives and hippie communes. The idea of decentralized systems has long been the goal for many societies, however, it has not been till the development of blockchain technologies and DAO’s that we can actually see a good use for it other than the pipe dreams of communism. In blockchain technology, we can actually act upon decentralization by giving the voting and decision-making power of these systems to several individuals none of which hold more power than the other, and thus ensuring a voting process that is fair throughout the whole of production. The decentralization of management of and access to resources gives way to fairer results on issues that impact the community as a whole.
Delegating and Validation Protocols and how they work
Decentralization allows for a trustless environment in which no one has to know each other in order to trust the system, and yet because everyone has the same power to vote things can be handled in a just and fair way.
Sadly however because staking and validation rely heavily on the rewards validators will receive. Big validators can promise higher rewards than small validators thus making investors flock to them like bees to honey. It is important however to understand that by delegating all of your tokens to only big validators you are actually hurting the system that you are being a part of. That is why it is so important to have a mix of small and big validators in your portfolio in order to ensure that decentralization is maintained and that all validators are able to maintain their nodes operationally. The process of delegating your tokens to a validator is called DPoS (Delegated Proof of Stake)
This excerpt from CryptoAdventure.com explains it best.
“The DPoS consensus algorithm system depends mainly on voting and election while maintaining decentralization and eliminating security issues.
In this system, stakeholders (active users) need to vote for witnesses and delegates. Voting involves placing tokens on a candidate’s name as a stakeholder’s representation in the process. Stakeholders with more tokens have a higher voting strength and influence on the network. A stakeholder can place only one vote per witness, but they can vote for the number of witnesses they wish to. It is important to note that 50% of active users agree that the number of elected witnesses achieves substantial decentralization. Eventually, the witness with the most votes wins the election.”
By definition, in a proof of stake system. The one with the most tokens wins, so it is our responsibility to not only prevent such power to land in the hands of wrongdoers but to assure that everyone has a fair chance to have their vote matter, and the only way to do this is to as stakeholders diversify our portfolio amongst as many validators as we possibly can. If all of us in the eco-system are able to do this we can ensure that the small guy also has a chance to stay afloat and improve the community in a purposeful manner.
For this reason, I have compiled a list of 50 elected small validators that can use your tokens today in order to continue providing the services they are providing as well as to continue securing the decentralization of the Harmony One blockchain.
List of Harmony One Elected Small Validators to stake with:
- Tec Viva
- Boss Baby ONE
- Hound Validator
- GameFri Crossing
- TheManumix Node
- Harmony Universe
- OneVerse Validator
- Panda Validator
- Crypto One Cafe
- Farmony One
- The Stable Europe Validator
- Unifi Protocol Dao
- Harmony Decentralization Pool
- FishFigh.one/Trustless Team
- Token Nuggets
- Harmonious Dude
- The Defira Fam Validator
- ONECelestial Validator
If you are interested in becoming a validator yourself check out the information provided on this link.
Hey, great read! I particularly enjoyed your in-depth discussion of ‘Proof of Stake’, since it was something I hadn’t really thought of before. Being a fellow blogger myself, I also really appreciate how organized and well-formatted everything was – it definitely made the content much more digestible overall. Keep up the awesome work!
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