Similarly to PoW, Proof of Stake (PoS) distributes new coins proportionally to the amount of security provided to the network. For example, a decentralized finance project called Uniswap managed to distributetheir initial supply of tokens to the users of their platform using this method. Another way to reduce the use of multiple identities is to do the distribution suddenly. This would create centralization into the system which public blockchains usually try to minimize. This would then require a trusted third party to validate the identities of everyone. One way to prevent this would be to require proof of identity from everyone. The problem is that someone could create multiple identities to gain an unfair advantage. One way would be to give an even amount of coins to everyone. Would some other method of coin distribution be better? Nowadays companies have created Ethash specialized ASIC machines but consumer graphic cards are still competitive in Ethereum mining.
This made it easier for anyone to take part in the security of Ethereum with widely-available consumer hardware. Ethereum uses its own Ethash algorithm that is designed to be solved with graphic cards. This is because the specialized hardware called ASICs, that are used for Bitcoin mining, are created to only solve the SHA256 hash algorithm. So if an attacker would like to change a past transaction they would have to mine every block again that comes after the change they made.Įven though Bitcoin miners have more computing power compared to Ethereum miners they can not attack Ethereum blockchain even if they wanted to. This makes it so that if any information is changed in the past blocks, every block after that gets invalidated as they no longer have the required amount of zeros at the beginning of the hash. Hashes work so that the result changes completely even if just a single bit is changed in the information that is being hashed. The security comes from the inclusion of the previous block’s hash in every block.
It takes a huge amount of computation to come up with the answer but once solved others can verify the answer easily. Currently, Bitcoin miners require 19 zeros at the beginning of the hash for the answer to be valid. The method for miners is the same but the difficulty is much higher. You can verify that my solution is correct by typing it in (without quotes and capital letters included) and checking that the hash below really starts with a 0. Then increase the number at the end until the hash below starts with a 0.įor example, my name’s first solution is “Heikki Hiltunen25”.(This number is called a “nonce” in cryptography and should be a random number) Type in your name (or anything else) and a number at the end.