When a network cannot keep a fixed list of consensus participants, proof of stake (PoS) dynamically selects participants according to how much digital currency they hold or have at stake. The assumption is that larger stakes make attacks less attractive. section 12.1.3
PoS fits into the consensus-participant problem like this:
- Proof of authority chooses consensus participants in advance. section 12.1.3
- Proof of stake chooses participants dynamically by currency holdings or stake. section 12.1.3
- Proof of work lets participants compete computationally, as in Bitcoin. section 12.1.3
Choosing participants
A cryptocurrency can use PoS to elect consensus participants based on the amount of digital currency they hold, rather than requiring a preapproved participant list. section 12.1.3
Figure 12.1 A centralized network can be seen as a single point of failure, whereas a distributed and decentralized network are resilient to a number of servers shutting down or acting maliciously. A permissioned network has a known and fixed set of main actors, while in a permissionless network, anyone can participate.
Use the network diagram to compare permissioned networks, which have known participants, with permissionless networks, where anyone can participate. section 12.1.3
