The underlying consensus protocol of a cryptocurrency determines how securely and quickly validators can reach a consensus on the next block. Bitcoin was designed to be the first and most powerful peer-to-peer electronic cash system that operates on a Proof of Work consensus protocol.
While the Proof of Work consensus algorithm is one of the safest mechanisms, it is a computation-intensive process. Due to the massive surge in incoming traffic for Bitcoin transactions, this algorithm has become inefficient in several ways. Bitcoin Latinum, a hard fork of Bitcoin, aims to resolve these inefficiencies by using an advanced version of the Proof of Stake consensus algorithm.
The Inefficiencies of Proof of Work algorithm.
The Proof of Work algorithm, due to a slow transaction per second speed, is facing network congestion and delays. Network congestion further results in several problems such as:
High Transaction Fees: Due to the small block size that cannot contain the large demand, Bitcoin has a high transaction fee.
Increased Energy Consumption: Proof of Work requires more energy because of its computation-intensive processes.
Slow Transaction Speed: As there is always a backlog of pending transactions before new ones are completed.
Exposed to 51% Attack: If a group of miners gain control over the majority of hash rate, they can manipulate the market, making Bitcoin exposed to 51% attack.
To solve these problems, the Proof Of Stake mechanism came into use, requiring a person to hold coins before they can mine or validate block transactions. It means, the more coins a person holds, the more mining power they will have, giving them better profits.
Bitcoin Latinum's Proof of Stake mechanism
Bitcoin Latinum is a Bitcoin hard fork developed from the ideology of Satoshi Nakamoto, the founder of Bitcoin. Instead of the Proof of Work algorithm, Bitcoin Latinum uses an advanced version of the Proof of Stake consensus protocol to resolve all the inefficiencies of Bitcoin.
While Bitcoin Latinum uses the same source code, protocol and algorithm as Bitcoin, it has an open architecture with the ability to handle large transaction volumes.
Bitcoin Latinum's Proof of Stake algorithm can perform a large number of transactions per second compared to Bitcoin. Also, as it is not a computation-intensive program, it consumes much less electricity than Bitcoin and has lower transaction fees.
Proof Of Stake uses validator nodes for the mining process. To become a validator node, the users must own an LTNM token, which is incidentally the only requirement. The greater the number of tokens, the greater will be the stake of the user.
The Proof Of Stake mechanism claims to be 99% more efficient in cutting down electricity use as it does not require specialized mining hardware. It can be done on a computer cutting down the power cost to only powering the computer.
Also, the Proof of Stake mechanism is a beginner-friendly algorithm as the mining process only requires the user to stake their Latinum in a shared pool where the pool owner decides all the variables.
Bitcoin Latinum has designed its algorithm by learning from other blockchain technologies and offers unparalleled services. For more information about Bitcoin Latinum's Proof of Stake algorithm, visit https://bitcoinlatinum.com/.