Green Netbox — how Proof-of-Stake makes crypto a lot more Eco-friendly
Netbox.Global is a blockchain-powered platform that provides a lot of online tools, from the Netbox.Browser to the Netbox.Chain and Coin, the Netbox.Store alongside others.
The Netbox Coin (NBX) is a proof-of-stake cryptocurrency coin native to the Netbox blockchain network platform.
The transactions take place from one peer to another without any involvement by a third party which makes it a decentralized asset. Today we will be taking a look at how green and eco-friendly Netbox is, due to the fact that it implements proof-of-stake.
A Brief History of Consensus Mechanisms
When we look at the history of cryptocurrencies, the one that truly paved the way for all others was Bitcoin, and when it was being built by Satoshi Nakamoto, the developer or developers had to find a way for the transactions to get verified without relying on a third, centralized party such as a bank.
Proof-of-Work (PoW) was the consensus mechanism we saw originally in Bitcoin, where we can see a system that requires members of the network to use computing powers with the intention of solving cryptographic puzzles in order to prevent anyone from compromising the system.
Cryptography uses mathematical equations that are difficult to the point where only some of the most powerful computers out there can actually solve them, and not one of them is ever the same which means that when you get to a point in time when the equation is solved, the network knows that it is authentic.
It was one of the most widely-used consensus systems out there in a lot of cryptocurrencies when it came to validating their transactions and mining new tokens.
In fact, due to Proof-of-Work (PoW), Bitcoin and other cryptocurrency transactions can be processed peer-to-peer securely without needing a third party, however, this came at a cost. It required a lot of energy, which only increased as more and more miners entered the network.
However, it was very limited, because it required a significant amount of electricity, and was very limited when it came to the number of transactions that it could process at the same time.
This was, not very green or eco-friendly to say the least, and was commented on by a lot of influential people due to the damage it was doing to our planet.
You have hundreds of thousands of nodes that run a lot of power-intensive hardware, trying to solve cryptographic puzzles and confirm transactions while minting new cryptocurrencies, and that is causing a lot of harm.
Even companies such as Tesla stopped accepting Bitcoin at one point due to the fact that it was an energy hog, according to Tesla Chief Executive Elon Musk, who cited excessive energy consumption in the mining process.
Proof-of-Stake (PoS) is an alternative to this, and it was first introduced in a paper by Sunny King and Scott Nadal in 2012 with the intention of solving the high energy consumption caused by Proof-of-Work (PoW).
Proof-of-Stake (PoS) allows stackers to mint or validate block transactions based on the number of coins they hold. It gives minting power based on the percentage of coins that are held by a staker and is less risky in terms of the potential when it comes for miners to attack the network as it is structured in a way through which the attack would be less advantageous.
The first blockchain to take advantage of Proof-of-Stake (PoS) and actually implement it was Peercoin. Today, Ethereum, the world’s second-largest cryptocurrency is moving to Proof-of-Stake (PoS) where the team is working hard to complete the transition as soon as possible.
Netbox.Chain & Netbox.Coin
However, while all of that is happening, Netbox already uses Proof-of-Stake (PoS). Netbox is a project that started in 2012, with the Netbox coin getting launched in 2019 with the main objective of disrupting the centralized browsing platforms.
In fact, the Netbox coin was created to become the native coin of the Netbox browser and make it a decentralized browsing platform.
It is a distributed transportation ledger with transactions written in sequential order into data structures called blocks, where every block points to the previous ones and as such makes it a possibility to know the state of the network at any point in time throughout its history. Each block is added to the blockchain and is then verified through Proof-of-Stake (PoS) where each user can put out a certain amount of NBX tokens and participate within the validation process of the blocks. They receive a reward for doing so.
Alongside the Proof-of-Stake (PoS) consensus mechanism, there are a few more things that you need to understand about Netbox to see the big picture. The amount of information that can be recorded In one block can reach 2 MB, which is the amount of memory in which information about 13,000 transactions can be stored. When you take into account the fact that the blocks are generated every minute, you can see that the maximum transaction rate in the network is 220 TPS. Furthermore, the transaction fees depend on the volume, as the more data you send to the Netbox.Chain, the higher fee you will have to pay.
There are two types of nodes that power all of this.
- The Masternodes — the ones that require a separate dedicated server with a fixed IP address and ensure that their network is online.
- The Ordinary Nodes — any Netbox.Browser running on the user’s PC.
Why Proof-of-Stake (PoS)
The thing about Proof-of-Stake (PoS) that makes it appealing and the main reason why it was chosen for the Netbox network is due to the fact that it is eco-friendly and green.
Furthermore, it takes a different approach to security through ensuring trust using the native cryptocurrency coin.
To participate in the blockchain verification process in Proof-of-Stake (PoS), users create a node.
That node can be run by one person or by a pool of people working together.
The node is then required to prove it is trustworthy, and it does so by locking away a number of cryptocurrency coins, the same type which is generated by the blockchain which they are verifying. So, for Netbox, it would be the NBX coin.
This is very similar to putting a deposit in escrow, and this is called staking.
Furthermore, for each and every block of transactions that needs to be verified, one node is selected by an algorithm that takes a lot of factors into consideration to reward those with more coins staked and prevent one node from getting a lot of control over the entirety of the process.
This node is responsible for the process of checking and publishing the block to the chain.
All of the other nodes then get some time to ensure that everything is indeed the way it is supposed to be, and if there is a mistake found, the node that published the block is punished by having some or all of their staked token destroyed, and this is why they are incentivized not to make mistakes. If everything ends up going smoothly, the node is rewarded with more coins, and this serves the role of a security mechanism for the blockchain alongside being an incentive for participation.
In other words, in this case, the nodes would not need to buy a lot of hardware and burn a lot of electricity. Instead, they would take an asset that they have, lock it, and confirm the blocks that way.
Given the fact that Proof-of-Stake (PoS) does not require any extra energy in order to prove the trustworthiness of the nodes, it is a lot more energy-efficient and eco-friendly. It is a greener solution, especially when compared to Proof-of-Work (PoW), and unlike it, where specialized computing equipment is required, the Proof-of-Stake (PoS) protocol can be run off any mobile device or laptop, where the nodes are virtual locations, not physical.
The result of this? Participation within this minting process has a much lower barrier of entry and as such, a lot more people can participate in it. Given the fact that one of the main principles and points of the appeal behind cryptocurrencies is their decentralization, having a lot more people participate in the process of securing the blockchain is efficient.
Looking at it from a statistical standpoint, Proof-of-Stake (PoS) is 99.95% lower in terms of energy consumption when compared to Proof-of-Work (PoW), and this is one of the main reasons why a lot of cryptocurrencies are starting to use it, or switch from Proof-of-Work (PoW) to Proof-of-Stake (PoS).
Netbox uses a green consensus mechanism due to the fact that users do not require any expensive hardware to run it, the investment does not depreciate with time, it is a lot more energy-efficient and environmentally friendly, and the more you hold onto the NBX coins, the more you will gain, which makes it a lot more appealing than any other average business investment.
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