There are some benefits of proof-of-stake.
- Less energy and monetary cost: for Bitcoin mining, miners need to spend around $50,000 per hour for electricity which means $1.2 million per day or $36 million per month. With proof-of-stake, you can cut all these costs out.
- No need for special equipment: since you cut out all mining costs, there is no need for better equipment or ASICs (application-specific integrated circuit).
- Stop 51% attacks: a 51% attack happens when a group of miners control over 50% of a blockchain’s hashing power, and use this power to mess with the blockchain. Proof-of-stake contributes 51% instead of this hypothetical group of miners, protecting the blockchain.
- Avoid bad validators: every validator who has their own funds locked up in the blockchain would make sure that they are not adding any wrong blocks to the chain because that would mean their entire stake invested would be taken away from them.
- Faster validation: all new blocks created by a validator will be validated faster.
- Scalability: splitting the entire Ethereum network into multiple portions called ‘shards’. Each shard would contain its own independent state, meaning a unique set of account balances and smart contracts.
Even if the rules of proof-of-stake seem simplistic to implement, what differentiates Casper from the rest is that it incentivizes the honest miners and punishes the dishonest ones. If you have your stake on a malicious block, then your stake will be gone forever. It will punish anyone who doesn’t play by the rules.
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