I recently created a video about staking:
If I am correct, the way you delegate HIVE Power is very similar to staking. If I am wrong, please correct me, as I am very new to the hive blockchain. There doesn't seem to be much information out there and I am in the process of creating a few videos for Hive, specifically:
These are questions I had when I started discovering it, and I hope answering them in a similar video format will help others. (Were there, or are there, any questions you have regarding the LeoFinance social media network - leave a comment below!)
Anyways, back to our main topic. Ethereum is supposedly moving it's consensus model from Proof-of-Work, like Bitcoin, to Proof-of-Stake. Why?
Well, there are very beneficial outcomes in terms of the environment - we use (and waste) much less electricity doing so.
Imagine a bunch of runners running a race. Whoever gets to the finish line first wins the race, and wins the mega reward. All the other racers ran, but they get no reward... so they wasted their efforts. This is essentially proof-of-work - there is only one winner even if 500,000 people attempt to win.
With proof-of-stake, however, we only pick 1 runner. That way we don't have 499,999 runners wasting their energy running a race they won't win. Proof of stake is measurably more efficient in terms of electricity, but it comes with some drawbacks as well.
For example, to become a "runner", you must stake your coins. This means you must lock them up and can't send them anywhere. Why?
You stake your coins so that you have an incentive to not create fraudulent transactions. If we do, other people can check our work and prove we were wrong, and those coins we locked up will be taken away from us.
This is a rough explanation of proof-of-stake, but I was able to use this example to explain it to my mother, who is not technically inclined - and that is my main target audience.
