1 Wallet = 1 Node: The Unbreakable Bond

Imagine your wallet as your trusty sidekick, and your node as its VIP access pass. Here's the deal: 1 node = 1 wallet. Simple, effective, and just the way we like it. To keep things breezy, create a shiny new wallet exclusively for your node. Give it a name that's snazzy and memorable. Now, resist the urge to plaster this wallet all over the internet like a virtual bumper sticker. Don't use it anywhere else, don't connect it to sketchy sites, and shush, don't spill its name. This wallet is your token maestro, and we're all about keeping its secrets safe. You know, just like guarding the recipe to grandma's secret sauce.

Let's dive into wallet management – safeguarding your tokens is an art. Picture this: you're about to stake, and your wallet's in the spotlight. But not any wallet – it's fresh, untainted by sites, apps, and digital chaos. It's the VIP of wallets, with its own secret seed phrase.

Why this fuss? If it's hacked, only that node's hit, not your crypto kingdom. But we can't babysit – wallet security's your gig. Leaky phrases, malware, tricky sites – villains, beware!

Meet your wallet's golden key: the mnemonic phrase. Birth accounts with one phrase, and they huddle up. Lose it, they vanish. Now, picture an account with a separate mnemonic phrase – the rock in your crypto garden.

DIY time: Offline Seed Phrase Wizardry. Magic? No, just genius. Address for each mnemonic phrase, VIP style.

Keep phrases safe – pen, paper, USB drive. Your tokens need armor, the mnemonic phrase will perfectly do.

Nodigy Account: Fort Knox Edition

So, you've got your node's wallet on lockdown. Now, let's talk about Nodigy accounts. We're all tempted to use our everyday email, the one that's seen more "unsubscribe" clicks than a cat meme newsletter. But hold on – a Nodigy account deserves a VIP email, too. Create an exclusive address for all things Nodigy, sprinkle it with digital fairy dust (read: security measures), and activate anti-spam shields for good measure, use anti-phishing code for all emails from Nodigy. And guess what? The party doesn't stop there – two-factor authentication is your golden ticket, TBD very soon. It's like having a personal bouncer for your account, and, they're not letting any uninvited trolls through that velvet rope.

More Measures to Come

We're not done yet, pals! Let's put on our thinking caps and cook up even more ingenious ways to level up your Nodigy experience. Picture this: a dashboard where all your wallets gather for a wallet family reunion. That's right, we're talking multiple wallets under one roof. And guess what? We're all about constant improvement, so expect new wallet additions to drop. This is exactly what is needed to implement the “1 wallet=1 node ” system, and we strive to make connecting various wallets as simple and comfortable as possible. Plus, we're unleashing customizable notifications – because staying in the loop never looked so good.

Securing Servers, One Digital Fortress at a Time

Breathe easy, because your server's safety is our North Star. We've got all our skills on duty, ensuring your Nodigy experience is perfectly convenient. But no one should underestimate wallet and account security! We're like the master locksmiths, providing the tools; you're the keeper of the keys. It's a trustless partnership where you don’t even need to rely on anyone and, thus, can’t be let down.

So, there you have it, Nodigy adventurers! Your journey is about to get more exciting, more secure, and yes, even more delightful. Remember, it's not just about what we do on our end – it's about how you rock those security moves. Keep node-hopping, keep exploring, and keep your blockchain dreams wild! Your Nodigy voyage awaits – secure, snazzy, and oh-so-spectacular.

Understanding Personal Validation Nodes

So, what are personal validation nodes anyway? Think of them as the Atlases holding the blockchain world on their shoulders. These nodes let individuals validate transactions and be a part of the network consensus. In simple terms, they give you the power to shout, "Hey, that transaction is legit!" or "Nuh-uh, that's a shady move!" It's like being a referee. Personal validation nodes also swoop in to save the day by beefing up security and giving the finger to centralized entities. No more relying on those shady exchanges or middlemen. With personal validation nodes, you become the master of your own crypto destiny. 

So, what's in it for you, besides feeling like a badass? Well, first off, your assets are safer than ever. By participating in transaction validation, you're making it harder for hackers to pull off their evil deeds. Plus, personal validation nodes help spread the workload, so there are no single points of failure.

Asset Security and Protection against Hackers

Centralized exchanges? Vulnerable AF. Personal validation nodes? Not so much. Hackers will have a tougher time cracking the network when you and your fellow validators are on the case. It's like putting a virtual "Do Not Disturb" sign on your assets. What is even more important—cracking up a personal node is just as difficult and time-consuming as it could be for the liquidity pool, for example, while the profit is significantly less. The hacker who’s able to break through the shields of your network is clearly smart enough to understand that the game isn’t worth the candle for him. So, sayonara!

Mitigating Inflation Risks

Inflation can be a real buzzkill for your digital assets. But fear not, my crypto amigos! Personal validation nodes are here to save the day. By actively participating in consensus and preventing unauthorized changes, these nodes keep your assets safe from the clutches of inflation. The rewards you keep getting for the contribution to the network availability serve as additional anti-inflation protection.

Technical Implementation and Considerations

Setting up your personal validation node might sound intimidating, but don't fret! Nodigy got your back here. Jump in our ecosystem which is make it possible for any person to run the node seamlessly and without any effort or skills required. Being trustless and non-custodial, Nodigy has no access to the funds staked in the nodes we are maintaining.

Ladies and gents, personal validation nodes are your ticket to becoming a crypto superhero. With their help, you can protect your assets from hackers, dodge the nasty effects of inflation, and be an active participant in the blockchain revolution. So, strap on your virtual cape, grab your validation tools, and let's kick some crypto butt together!

What the Heck is Trustless Anyway?

So, you're probably wondering, "What in the crypto cosmos does 'trustless' even mean?" Well, my friends, in the decentralized blockchain universe, trustless refers to a nifty quality where you don't have to rely on trust in a third party. It's like having a network full of independent thinkers who can agree on a single truth without holding hands and singing Kumbaya. No need to know or trust each other because, hey, who needs trust when you have math and cryptography, right?

Trust Distribution: Like a Block Party with Thousands of Guests

Now, let's talk about trust distribution at these blockchain block parties. Picture this: you're throwing the hottest party in town, and instead of a few close friends, you invite tens, or even thousands, of participants. How does trust get divvied up among these rowdy partygoers? It all comes down to the consensus algorithm, the secret sauce of trust distribution.

Proof-of-Work vs. Proof-of-Stake: The Great Trust Bake-Off

Enter the epic showdown between Proof-of-Work (PoW) and Proof-of-Stake (PoS). Think of it as a culinary competition where trust is the main ingredient. In the PoW kitchen, miners don their aprons and whip up delicious blocks by solving complex puzzles. 

Meanwhile, in the PoS kitchen, validators show off their culinary skills by locking up their assets and proving they're not just here to mooch off the system. It's like saying, "Hey, I've got skin in the game, so trust me to keep things running smoothly." Validators are chosen randomly from a pool, but the more assets they have at stake, the higher their chances of being the kitchen's top chef. And if anyone tries to sabotage the process, their assets get slashed like a knife through butter, leaving them with a bitter taste in their mouths.

Trust in the Wild: A Zoo of Cryptocurrencies

Now that we've covered the basics, let's take a walk on the wild side and explore how trust manifests in some popular cryptocurrencies. First up, we have Bitcoin, the OG of the crypto world. Miners around the globe work tirelessly to keep the Bitcoin party going, ensuring that no one entity gains control over the majority of mining power. Then we have Ethereum, the cool kid on the block who recently switched from PoW to PoS. Ethereum's stakers deposit their ETH to keep the party rolling while earning some nice returns. 

But wait, there's more! We have Tether/USDT, the famous stablecoin with a bit of a trust rollercoaster ride. While it runs on various chains, it's not truly trustless because, well, let's just say they have the power to block anyone from busting a move with their coins.

And how can we forget USDC, the stablecoin born out of a partnership between Coinbase and Circle? It's audited and transparent, but hey, they still have the authority to block addresses if they want to.

Building Trustlessness Brick by Brick

Now that we've explored these trustless currencies, let's break down the three key components that make blockchains trustless, brick by brick.

Imagine public-key cryptography as the secret handshake among crypto enthusiasts. It plays a vital role in ensuring the authenticity and security of transactions. Here's how it works: each participant in the blockchain has a public key, visible to everyone, and a private key, known only to the owner. When sending a transaction, the sender uses their private key to generate a digital signature, a unique stamp of authenticity. The recipient can then verify the transaction's legitimacy by checking the digital signature against the public key. It's like having an exclusive handshake that confirms you're dealing with the right person. 

However, here's a word of caution: guard those private keys like your party bus keys! If you misplace or lose them, accessing your funds becomes impossible. So, remember to store them securely, just like you would keep those precious party essentials safe.

Next, we've got machine consensus and crypto-economic protocols. It's like a wild blend of math, economics, and game theory that incentivizes participants to play nice and reach a consensus.

Last but not least, we have social consensus and governance. Because, let's face it, even in the world of blockchain, humans still call the shots. It's like having democracy, where everyone can propose changes and updates. And if the majority agrees, well, it's time to break out the confetti and celebrate the blockchain evolution!

And there you have it, my trustless thrill-seekers! We've journeyed through the wild world of trustlessness in crypto, discovering that trust takes a backseat while innovation and technology take the wheel. So, while we were building Nodigy—an automatic validation node deployment wizard—we kept in mind that we cannot ask someone to trust us blindly with their funds staked in the node running on our service. That seemed to be a good idea to simply remove the “trust” component from the whole equation to solve it. Now you don’t need to exactly trust us—except for being trustless, Nodigy also is non-custodial. Truth is, we just wanna know nothing about your funds at all. All we are interested in are monthly fees for node maintenance. And if you’ll decide to give it a try, feel free to reach out via our website or Twitter!

Poly Network: Where Crossing Bridges Can Lead to a Splash

Poly Network, the cross-chain bridge, found itself in hot water on July 1, 2023. In an exploit that left them feeling a little "ETHsy," they lost a whopping 5,196.95 ETH, which is equivalent to a jaw-dropping 10,201,612 USD. Ouch! Talk about a costly detour. The attacker had a field day, generating signatures and draining assets across Ethereum, Binance Smart Chain, Avalanche, and Metis. Seems like someone was building their own crypto treasure chest!

BiSwap: When Validation Takes a Vacation

In the realm of the Binance Smart Chain, BiSwap became the stage for a blunder on June 30, 2023. It turns out their system had a case of "parameteritis," failing to verify token validity and pair parameters. It's like forgetting to check the menu before ordering! With some crafty token forgery, the attacker manipulated the migration function, leaving users' assets burning in the flames of their own mistake. Lesson learned: Always double-check those parameters, folks!

Here's some advice from Nodigy: stay vigilant and keep your funds in your own control as much as possible. After all, no one can care about your assets better than you. And hey, if you're feeling adventurous and want more control, maybe it's time to become a validator and run a node for your favorite Web3 project. 

That's it for this edition of our Crypto Chronicles. Stay tuned for more epic blunders, daring hacks, and the occasional facepalm moments in the ever-evolving crypto world. Until then, happy hodling, and may your crypto journey be filled with laughter and Lambos!

First, we have the infamous Michael Ackerman from Ohio, who thought he could pull off a genius fraudulent digital asset trading scheme. Turns out, his plans didn't quite work out as expected. On June 28, 2023, the universe served him a slice of justice, and he was ordered to cough up a whopping $54 million! Can you imagine the look on his face when he realized his days of trickery were over? Karma, baby!

Ackerman managed to deceive over 150 people and organizations into depositing a staggering $33 million. And here's the real kicker—only $10 million of that amount was actually used for trading. The rest? Well, let's just say he decided it was time for a personal shopping spree. Who needs integrity when you can have designer clothes, right?

The Themis Protocol flash loan exploit is next on our list of unfortunate events. Picture this: June 27, 2023, a sunny day in the crypto world. Little did Themis Protocol know, a sneaky attacker was lurking in the shadows, ready to pounce. With a malicious contract and a keen eye for opportunity, they managed to snag an extraordinary $367,748 USD from various assets. Talk about a high-stakes heist!

These cunning thieves exploited multiple pools within the Themis Protocol, including tArbWETH, tArbUSDC, tArbARB, tArbWBTC, tArbDAI, and tArbUSDT. It's like they had a VIP pass to the virtual casino of chaos. They swiftly converted the stolen assets into ETH, USDT, and USDC, leaving everyone else scratching their heads in disbelief. Hats off to their audacity, but seriously, who raised these people?

Last but not least, let's talk about Shido Global. This Cosmos-based blockchain experienced an unfortunate turn of events on June 23, 2023. A configuration error in the lock and claim mechanism, combined with some pesky price discrepancies in PancakeSwap, created the perfect storm for exploitation. Boom! Shido Global was hit hard with a thunderous $367,748 USD loss across multiple assets. Ouch!

Now, don't despair, my friends. We're here to offer a glimmer of hope amidst this madness. Have you considered getting a personal node? It might just be the silver lining you've been looking for. At Nodigy, we offer non-custodial services, meaning we have zero access to your hard-earned funds stored in those nodes. It’s good to be trustless when trust is a losing game.

So, there you have it, folks! Another day on the rollercoaster ride of crypto. Stay vigilant, stay smart, and keep those funds locked up tight. Until next time, stay fresh and hack-free, fam!

Let's kick things off with a friendly reminder: "No one could care about your assets better than you." So, let's dive into some recent crypto calamities, shall we?

Pawnfi: Where The Dreams Were Pwned

On June 17, 2023, Pawnfi contracts, including the infamous ApeStaking, got a taste of the exploitation dance floor. The attackers sure knew how to move, causing a loss of 633,441 USD worth of 366.77 ETH. But hey, they couldn't resist the temptation to show off their 'ETH-tric' moves. They swirled away with 100 ETH through TornadoCash, leaving the remaining 266.77 ETH to another EOA address that's holding the stolen funds. Time to update those dance moves, Pawnfi!

The Midas Capital: Gold or Fool's Gold?

Picture this: The Midas Capital, a borrowing and lending platform on the Binance Smart Chain, fell prey to a logic flaw in one of its contracts. Oops! The attackers saw this opportunity and decided to strike, draining over 600,000 USD worth of various tokens, including stablecoins and BNB. Looks like the Midas touch went from gold to a fool's gold rush. Keep those contracts verified, folks!

Ara Blocks: When NFTs Become 'Nefarious Funds Taken'

Our NFT adventure takes us to Ara Blocks, a promising project on the Binance Smart Chain. But alas, they faced the wrath of a flash loan attack. The attacker thought they could pull off the ultimate art heist and successfully exploited the project, causing a loss of 124,915 USD. The stolen funds decided to join another EOA address, partying together like there's no tomorrow. It seems even NFTs can't escape the clutches of mischievous minds.

Baby Doge Coin: From Cute Memes to Not-So-Cute Schemes

Who can resist a meme token? Apparently, not the attackers. Baby Doge Coin encountered a flash loan attack on June 21, 2023, leaving them feeling less like a cute pup and more like a chew toy. The attacker managed to score a hefty loan of 18.5 million USDT and 11.9 million BUSD from UNI V2. They must have thought they hit the jackpot, but let's be honest, the real jackpot was their audacity. Looks like Baby Doge Coin took an unexpected walk on the wild side.

Well, that wraps up our crypto chronicles for today. Remember, in this crazy world of cryptocurrencies, laughter might just be the best encryption. Stay safe, keep those wallets secure, and let's hope the next adventure in the crypto realm brings us more giggles than glitches! And don’t forget: a personal node is a way less attractive target for hackers, so consider getting yourself one. Reach the Nodigy at info@nodigy.com or via Twitter’s DM!

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Impermanent Loss: More Like Impermanent Gains

Liquidity pools sound like a dream come true, right? Pooling your funds, trading like a pro, and earning juicy returns. But hold your horses, my friend. When those token values start playing a yo-yo game, you could end up losing more than you bargained for. It's like chasing a mirage in the desert—sometimes, it's just a cruel illusion.

No Sheriff in Town

Regulation? What's That? In the wild west of DeFi, there ain't no sheriff in town. These liquidity pools operate outside the rules and regulations that keep traditional finance in check. It's both exhilarating and risky. With no regulatory oversight, you're like a cowboy riding solo, hoping you don't stumble into a trap set by some sneaky bandit. Yeehaw!

Scams and Rug Pulls: Hide Your Wallets!

Here's a little warning for you: scams and rug pulls are as common as tumbleweeds in the DeFi space. You might stumble upon a pool promising to turn your pocket change into a fortune overnight. But beware, my friends, not all that glitters is gold. These swindlers will lure you in, take your money, and disappear into the digital abyss. Poof! Just like that.

Smart Contracts: A Hacker's Playground

Picture this: a brilliant hacker spots a tiny glitch in a smart contract, and boom! They crack the code, making off with a fortune. It's like finding a hidden treasure map in a dusty old book. Smart contracts may be innovative, but they're not bulletproof. Even the tiniest flaw can be a hacker's ticket to a digital heist. Talk about turning pennies into millions.

Centralization: All Eggs in One Basket

Crypto liquidity pools often put a lot of power in the hands of a single entity. One small oopsie, and… here we go again, just take a look back at the previous paragraph. Think of it: we're talking about millions, possibly billions, of funds in one place. It's like having the most exclusive party in town, but if the bouncer falls asleep, the gatecrashers run off with the loot.

Bits of Statistics

In recent times, the realm of cryptocurrencies has witnessed unfortunate incidents that have left investors reeling from substantial losses. Let's take a closer look at a few noteworthy events:

1. Atlantis Loans: On June 10, 2023, Atlantis Loans, a prominent DeFi lending protocol running on the BNB chain, was the target of a devastating governance attack. As a result, the attacker gained control over approximately $1,161,848 worth of funds, leaving participants stunned. The rest of the stolen funds remain trapped in the attacker's initial address, adding to the woes of affected investors.

2. Tornado Cash Governance: The date 20.05.2023 marks a troubling event as Tornado Cash Governance fell prey to a malicious proposal, allowing the attacker to seize control. The total amount stolen reached a staggering 1,049,513 $USD, with the possibility of even more losses due to locked $TORN tokens in subsequent proposals initiated by the attacker. This breach of governance served as a stark reminder of the importance of robust security measures in the crypto realm.

3. Deus Finance Exploit: On 05.05.2023, Deus Finance experienced a harrowing exploit triggered by a logic flaw in the $DEI token contract. Exploiting this vulnerability, the attacker drained pools on both the Arbitrum and Binance Smart Chain (BSC), resulting in a substantial loss amounting to 6,227,977 $USD. This incident highlighted the need for meticulous code auditing and thorough testing to detect and rectify such flaws.

4. Level Finance Vulnerability: On 01.05.2023, Level Finance faced the unfortunate consequence of an exploit, causing a loss of 214,000 $LVL tokens, which equated to an approximate value of 2,780,320 $USD. This breach left participants disheartened as their tokens vanished into thin air, underscoring the necessity for robust security measures in DeFi platforms.

5. Jimbos Protocol Exploit: On 28.05.2023, the crypto community suffered yet another setback as an exploit wreaked havoc on the Jimbosprotocol. In the aftermath of this exploit, more than $7.4 million was brazenly stolen, leaving participants reeling from the unfortunate turn of events. The exploit served as a stark reminder of the vulnerabilities that persist within the crypto ecosystem.

It’s just a couple of months! What would you expect in a long-term plan? Hackers are plaguing DeFi really hard, and no one can take care of your funds except for… spoiler alert—you!

Security Is Sexy: Mitigating the Risks

Crypto funds are the lifeblood of your financial endeavors, and safeguarding them is paramount. While liquidity pools have their place in the DeFi landscape, personal validation nodes within trusted Web 3 projects provide an intriguing alternative. Through increased control, trust in reputable projects, self-verification, ecosystem strengthening, and the gift of peace of mind, personal validation nodes offer a compelling path to fortify your crypto investments. So, embrace this new frontier, my friends, and embark on a journey where your funds find solace in the realm of personal validation nodes within trusted Web 3 projects. 

More recently, such a path was only available to people with a good level of technical skills and enough time to keep the node working. Our project aims to change this — and our automatic node deployment service is almost ready. Very soon, anyone will be able to install a node with its help and store their funds in complete safety. 

Don’t fret to reach Nodigy, if you are interested in your own node or, maybe, a partnership. No message will remain unanswered!

Control and Security: Taking the Reins

Picture this: You, the master of your own destiny, holding the keys to your crypto kingdom. With personal validation nodes, you regain control over your assets, unlike those poor souls who entrust their hard-earned coins to liquidity pools. No need to fret about vulnerabilities or exploits—your assets are safely tucked away under your watchful eye. It's like having a fortress for your funds, complete with laser-shark protection. Okay, maybe not the sharks, but you get the idea.

Impermanent Loss: A Distant Memory

Ah, impermanent loss, the nemesis of liquidity pool enthusiasts. But fear not, brave investor! By keeping your assets in personal validation nodes, you can bid adieu to this villainous foe. No more waking up to find your hard-earned tokens transformed into phantom losses. With personal validation nodes, your assets stand tall and separate from the whims of market volatility. Impermanent loss? More like impermanent memory!

Inflation and Monetary Policy: Staking Your Claim

Have you ever felt the creeping anxiety of inflation or the unpredictable nature of monetary policies? Well, personal validation nodes might just be your ticket to serenity. In the world of Proof-of-Stake blockchains, you can stake your assets and contribute to network security, all while earning rewards. It's like having your cake and eating it too—earning additional tokens while shielding yourself from the woes of inflation. Who said that the financial strategy couldn't be delicious?

Governance and Voting Rights: Unleash Your Inner Boss

Step into the shoes of a crypto kingpin, my friend! Personal validation nodes offer the thrilling possibility of governance and voting rights. You become a decision-maker, a voice in the blockchain's choir. Fancy a protocol upgrade? Want to tweak some parameters? With personal validation nodes, you have a front-row seat to the show. It's like having a backstage pass to the blockchain concert—rocking the stage and calling the shots.

To Wrap Things Up

In this wild world of decentralized finance, personal validation nodes emerge as a shining knights, brandishing the sword of control, security, impermanent loss protection, and even governance. They provide a safer alternative to liquidity pools, where brave investors roam free from the clutches of market volatility and exploitative vulnerabilities. So, my adventurous reader, ponder the possibilities, weigh the risks, and decide if personal validation nodes are the quest you've been waiting to embark upon. Remember, in the realm of crypto, fortune favors the bold!

The Scalability Champion with Atomic Composability

Shardeum stands tall as an EVM-based Layer 1 blockchain that employs dynamic state sharding to achieve linear scalability. What does that mean? It means that with each validator added to the network, Shardeum can increase its transaction per second (TPS) capacity, ensuring low fees remain forever. This scaling mechanism allows Shardeum to achieve the highest throughput capacity among EVM-based Layer 1 solutions without compromising on decentralization. Developers rejoice as they can deploy and interact with Solidity or Vyper contracts without worrying about sharding complexities. Contracts are automatically deployed to unique shards while maintaining atomic composability across all shards. It its scalability and ease of use rolled into one!

Sharding: Unlocking the Power of Parallel Processing

To understand Shardeum better, let's talk about sharding. Sharding is a network architecture that breaks a blockchain network into smaller, manageable pieces called "shards." Each shard independently processes a portion of the network's transactions, enabling parallel processing and significantly boosting the network's overall performance. With sharding, Shardeum overcomes the performance challenges that unsharded networks face as they gain popularity. It's like having multiple hands to tackle transactions, ensuring a smooth and efficient blockchain experience.

The Ideal Issuance Model: Balancing Profitability and Efficiency

The issuance model of Shardeum is carefully designed to navigate the unpredictable nature of market conditions and price movements. Through economic analysis and logical reasoning, the model aims to respond efficiently to bull or bear price actions on SHM tokens while adapting to rapid changes in network demand. Balancing security and efficiency is vital to keeping the network profitable enough to encourage node operators and prevent exploitation. But let's not forget the most exciting aspect: Shardeum's commitment to keeping transaction fees low forever. It's like having a VIP discount at a high-end restaurant—low fees that never expire!

Profitability for Validators: More Validators, More Throughput

Validators play a vital role in Shardeum's blockchain design. As the number of validators increases, so does the network's throughput, measured in transactions per second (TPS). This means that Shardeum periodically increases the number of validators to accommodate high throughput requirements. To incentivize validators, Shardeum awards them 51% of the tokens, acknowledging their crucial contribution to the network's success. It's a win-win situation—more validators mean higher network capacity and more rewards for those shaping the blockchain landscape.

Supported Wallets: Securely Managing Your SHM Tokens

To ensure a seamless user experience, Shardeum supports various wallets that offer secure and user-friendly ways to manage SHM tokens. From the popular MetaMask, trusted by millions, to the non-custodial OKX Wallet, allowing you to trade NFTs and earn yield across multiple chains, there's a wallet to suit every preference. BitKeep offers a multi-chain wallet with enhanced security features, while Frontier provides a comprehensive wallet browser extension for Crypto, DeFi, and NFT enthusiasts. And let's not forget the Brave Wallet, built directly into the browser for easy asset management and cross-chain transactions.

Managing your SHM tokens has never been more convenient with these trusted wallets.

Time for the Next Step

With 1.5 million transactions and 45k smart contracts deployed on Shardeum's prototype network, Liberty, it's time for the project to take its next momentous leap. Shardeum Sphinx is the final testnet before the highly anticipated mainnet launch. As Shardeum evolves and refines its groundbreaking technology, Sphinx simulates the mainnet environment, putting the network through its paces to ensure production readiness and secure application testing.

Now is the perfect time to join the Shardeum community and become an integral part of this decentralized revolution. As the mainnet launch approaches, Shardeum invites enthusiasts and visionaries to run their own validator nodes, contributing to the network's resilience and decentralization. By participating in the ecosystem, you become a driving force behind the future of blockchain technology.

Aptos Bridge: Crossing with Confidence

When it comes to bridges, you might imagine picturesque arches over flowing rivers. But in the crypto universe, bridges connect different networks, and Aptos Bridge is a sensation to emerge from Layer Zero. Launched alongside the Aptos mainnet, this bridge dares you to venture across the blockchain divide. With a word of caution about risks and commissions, Aptos Bridge offers a gateway to explore new networks while potentially unlocking rewards that might just be a gift from Aptos himself. Talk about a bridge with personality!

Angle Protocol: Weaving an Omnichain Tale

Integrating Layer Zero into the fabric of the crypto space, Angle Protocol introduces agEUR, an omnichain stablecoin. Picture this: liquidity pools from Ethereum, Polygon, Optimism, and Arbitrum join forces, seamlessly merging into one powerful entity. Angle Protocol’s creation is akin to a symphony of interconnected blockchains, harmonizing in perfect unison. Now that’s what we call a stablecoin worth singing about!

Reunit Wallet: Omni-Chaining the Way We Transact

Imagine a wallet that effortlessly unites multiple blockchains, allowing you to transfer tokens across networks in a single click. Well, the folks at Reunit Wallet have made that dream a reality on Layer Zero. With this revolutionary omni-chain wallet, users gain increased purchasing power and access to applications previously exclusive to other blockchains. Meanwhile, dApps benefit from greater volume, liquidity, and transactions, attracting users from all corners of the crypto universe. As an added bonus, Reunit offers a dApp store within the wallet itself, creating a user experience that’s as seamless as a finely tailored suit.

Stargate: Bridging the Gap, Breaking the Trilemma

Enter Stargate, the bridge that boldly conquers the bridging trilemma. While other bridges struggle with trade-offs, Stargate swoops in to save the day, offering a trifecta of core bridge features. Guaranteed finality ensures your transactions arrive safely at the destination chain while swapping native assets eliminates the need for cumbersome additional swaps. Moreover, the unified liquidity pool welcomes users and applications with open arms, fostering deeper liquidity and trust in the bridge’s reliability. Stargate truly opens up a gateway to seamless cross-chain transactions, leaving trilemmas shaking in their digital boots.

Rage Trade: Perps, Liquidity, and Vaults

In the realm of crypto, a touch of rage might not be such a bad thing. Rage Trade builds the most liquid, composable, and exclusively omnichain ETH perp. With 5x leverage and the enchanting power of UNI v3, Rage Trade is no ordinary force to reckon with. Picture recycled liquidity, yield-generating 80–20 Vaults, and a whirlwind of excitement as you navigate the crypto market. Get ready for a wild ride with Rage Trade — where the only thing raging more than the market is your enthusiasm!

Mugen Finance: Yielding Multichain Profits

If you’re looking for financial wizardry, it’s time to see Mugen Finance. Built on Layer Zero and currently operating on the Arbitrum network, Mugen Finance offers a collection of financial instruments that can generate revenue from various networks and protocols. It’s like having a magic wand that connects multiple decentralized apps (DApps) and the messaging protocol of Layer Zero, all while allowing you to earn yield simply by holding Mugen. With its innovative strategies and diverse yield sources, Mugen Finance is conjuring up a whole new level of excitement in the yield management industry.

The Whole Picture

Layer Zero is more than just a cure to the pains of the crypto industry; it’s a playground of innovation. From Aptos Bridge’s rewards and personality to Angle Protocol’s omnichain symphony, the projects built on Layer Zero are redefining what’s possible in the crypto realm. Reunit Wallet’s omni-chain capabilities and integrated dApp store offer users a truly seamless experience, while Stargate tackles the bridging trilemma with ease. And let’s not forget about the excitement and thrill brought by Rage Trade’s perps and liquidity, or the enchanting yield generation of Mugen Finance. The projects built on Layer Zero are not just pushing boundaries; they’re painting the crypto landscape with vibrant colors.

A Few Basics

It's a slick new way to handle smart contracts without all the headaches. Instead of trying to tackle all three parts of the scalability trilemma (speed, security, and decentralization) at once, devs can create specialized Layer 1 blockchains for each one. Then, Layer 0 swoops in and connects them all, like a boss. It allows cross-chain interoperability with layer 1 networks like Cosmos and Bitcoin. The protocol can even deploy relay networks across several nodes, like BTC and ETH, without causing any issues.

The best part? It's so seamless that users don't even know they're jumping between different blockchains. It's like some blockchain wizardry or something. So, yeah, Layer 0 is pretty lit. Without it, the whole thing would crumble, and we wouldn't be able to back up all the transaction data for the layer 1 chains. But don't worry, layer 0 has got our backs when it comes to scalability and interoperability.

And check this out — there are some pretty cool crypto networks on layer 0, like LayerZero (really unexpected naming, right?), Cosmos, and Polkadot. With layer 0 networks, software developers can create their own layer 1 chains that are connected to the mainchain, but they all operate independently.

SDKs, or software development toolkits, make it possible to connect everything seamlessly. And, bonus, layer 0 also helps with scalability by enabling digital currency wrapping, individual reward set-up, and data validation.

How Is The Magic Done?

So, you're curious about how Layer 0 works? Let us break it down for you in plain English (no computer science degree required). Think of it like the sturdy frame of a house. It's what keeps everything standing and functioning properly.

One of the cool things about Layer 0 is that it uses state channels to validate data. This means that it's not just relying on one person or entity to do the job. Instead, it's a team effort, which makes it more secure and reliable.

And let's not forget about the native tokens. They are like the currency of the Layer 0 world. They incentivize users to participate in the ecosystem and help keep things running smoothly. It's like getting paid to play. Who wouldn't want that?

But, here's the catch. If you want to get in on the action and use the Layer 0 protocol to build your own business, you gotta stake or buy those tokens. It's like buying a ticket to the party. Once you're in, the possibilities are endless. You can create your own custom tokens, set up reward structures, validate data, and more. It's like having your own little digital empire.

So there you have it, folks. Layer 0 in a nutshell. It's the foundation of the blockchain, it's powered by state channels, and it's fueled by native tokens. Now, go forth and conquer the blockchain world!

What To Expect From Layer 0?

Let's talk about the future, shall we? Smart contracts are alright, but they just can't keep up with the demands of the blockchain world. That's where Layer 0 protocols come in, swooping in like a superhero to save the day!

Some seriously cool layer 0 platforms, like Polkadot, and Cosmos, are already hosting a ton of decentralized applications and layer 1 protocols. And that's just the beginning! With layer 0 technology, we can finally achieve infinite scalability and put an end to network congestion once and for all.

Who’s In The Game For Now?

Here are some Layer 0 protocols that are like superheroes with different powers and designs, all aiming to achieve their unique objectives. Here are some examples:

• Cosmos — this protocol is like a boss in building an interconnected network of thousands of blockchains. It uses the Tendermint consensus mechanism to handle high transaction volumes and Byzantine fault tolerant (BFT) algorithms to secure the network against attacks.

• LayerZero — Swiss Army knife for blockchains. It’s an interoperability protocol that allows for seamless communications between different chains. This means you can create some awesome cross-chain apps without having to jump through hoops. It’s also super simple to use, thanks to its low-level communication magic.

• Venom — this blockchain takes a multi-layer approach to tackle scalability with masterchain, workchains, and shardchains. It can process 100,000 to 1 million transactions per second (tps) with dynamic sharding and uses a hybrid consensus mechanism with the PoS algorithm and BFT to speed up transaction validation.

• Polkadot — this protocol is like a dot in a sea of sharding, distributing transactions among several parallel chains to facilitate higher transaction throughput and reduce network congestion. It uses bridges and cross-chain messaging to promote interoperability and employs a hybrid consensus mechanism with Blind Assignment for Blockchain Extension (BABE) and GHOST-based Recursive Ancestor Deriving Prefix Agreement (GRANDPA) to increase network security.

These layer 0 protocols are pushing the limits of what blockchain can do, and it's exciting to see what they'll come up with next! And if you want to join this Avengers team of blockchains, one of the nicest ways is to become a validator and contribute to one of them with your processing powers. The good news is that you don’t need to have a computer science degree for that — Nodigy is here to simplify things for all who are eager to meet the future of decentralization as soon as possible. Don’t forget to follow us here on Medium and let’s discuss on Twitter what we can do. You might also want to visit our website to discover some shining possibilities.

The Timing Couldn't Be Better

As of 2023, the number of daily users for decentralized applications has surpassed...some number that's probably really impressive, with several billion dollars in volume. This increased adoption of cryptocurrencies has familiarized people with wallets and the mechanics of transacting on-chain, paving the way for even more exciting developments in the world of blockchain.

The perfect example could be Algorand, the blockchain platform that's fast, secure, and seen as an institutional favorite among banks and insurance companies. Algorand has seen a surge in development and adoption, with record numbers of new users flocking to the platform. But with great power comes great responsibility, and the blockchain space has seen its fair share of hacks and manipulation. That's where Goracle comes in — providing a high-quality oracle solution to grow the blockchain further and keep things safe and secure.

But enough about the technical stuff. Let's talk about Goracle's vision. Their mission is to advance the state-of-the-art in Oracle and blockchain reliability, safety, and performance by providing a flexible and modular Oracle architecture. Basically, they want to make it easy for developers to build awesome dApps that actually work. And they're doing it with the help of highly skilled computer scientists, cryptographers, mathematicians, statisticians, data scientists, and more. It's like they're building the Justice League of blockchain — if Batman and Superman were replaced by a bunch of computer nerds.

Prioritizing Security

And let's not forget about security. With so much at stake in the blockchain world, security is a top priority for Goracle. They're working with 2-3 audit firms to review their code and performing millions of simulations to model the trajectory of the token. It's like they're running a massive, blockchain-based science experiment. I just hope they don't accidentally create a sentient AI that takes over the world. That would be...less than ideal.

Decentralization As It Supposed To Be

But back to the serious stuff. Goracle is focused on true decentralization and ensuring that anyone who wants to participate can do so. It's like a big, decentralized party to which everyone's invited. And instead of a bouncer at the door, there's just...math? Honestly, I'm not sure how the permission system works, but the Goracle team believes that decentralizing as much as possible will lead to better outcomes for everyone. It's like the blockchain equivalent of a hippie commune but with less patchouli and more code.

So, Why Do We Believe in Goracle?

Goracle is the oracle solution to end all oracle solutions. It's fast, secure, and focused on making blockchain accessible and useful for everyone. And with a team of experts backing it up, it's sure to be a game-changer in the world of dApps. So what are you waiting for? Hop on the Goracle train before it's too late. Who knows — you might just end up changing the world. Or at least making a few bucks. Either way, it's a win-win. And if you want to contribute to such a promising project by being a validator, feel free to reach the Nodigy for your own node. Let’s meet on Twitter or the website!

Who Are We Dealing With KYVE is a PoS Layer 1 blockchain built with the Cosmos SDK that offers fast and easy tooling for data-related purposes. The protocol layer of KYVE enables the actual use case of KYVE’s data lake, which includes data pools, funding, staking, and delegation. The protocol layer has its own nodes that collect data from a source, bundle it, upload it to any decentralized storage solution, and then validate it, keeping track of which data is indeed valid for its users to tap into.

KYVE’s trustless data is accessible to all for free, and there are two ways to access it:

• Using KYVE’s Data Pipeline, it is possible to import KYVE’s data into a preferred data backend with ease, without needing to write any code. This option can be customized according to one’s needs, and the data can be transformed into the required format;

• If you code your solution, you can use KYVE’s REST-API.

Storing data on KYVE is an entirely customizable experience, enabling users to create a data pool, and determine what data needs to be stored and validated, as well as where to gather it and then where to store it. KYVE is storage agnostic, enabling users to store data through KYVE onto Arweave or code in their storage solution.

KYVE has its native coin, $KYVE, which has multiple uses.

• On the chain level, it is used for staking and delegating;

• On the protocol level, it is used for funding, staking, and delegating;

• On the governance level, it is used for submitting and voting on proposals, allowing stakeholders to have a say in the evolution and growth of KYVE.

KYVE aims to validate and store data streams on decentralized storage providers, eliminating the need for trust in the process. The platform accomplishes this through its Proof of Stake blockchain and network of storage pools built on top of it. Data is collected by uploaders from various sources, stored on decentralized providers, and submitted to storage pools for validation by validators, who are participants in the network. Once validated, the data can be accessed by data consumers to build decentralized applications without having to trust KYVE or any intermediaries.

KYVE is structured into two layers: the chain layer and the protocol layer. The chain layer is a sovereign Proof of Stake blockchain that uses the Tendermint consensus engine and is built with Cosmos. Its main function is to establish consensus and ensure the security of the protocol layer. The protocol layer houses all the unique features of KYVE and enables the validation of data.

There are two types of nodes in KYVE: chain nodes and protocol nodes. Chain nodes refer to validators who are responsible for committing new blocks in the blockchain. These validators participate in the consensus protocol by broadcasting votes that contain cryptographic signatures signed by each validator’s private key. Protocol nodes always run on a specific storage pool and are responsible for collecting data, bundling and uploading it, and validating it.

KYVE has established partnerships with various blockchain networks, including Polkadot & Kusama, Near, Solana, Mina, Moonbeam, Avalanche, Stacks, Cosmos, Evmos, Injective, Celo, Aurora, Zilliqa, Axelar, Sei Network, and Archway.

The Nodigy project team is proud to contribute to such an innovative solution. To witness the future blossoming in technologies is definitely worth every effort we put into them. And if you want to know even more about us and the projects we endorse, let’s keep in touch on Twitter and our website!

Bitcoin has the highest market value, and Ethereum follows as the second most valuable crypto.

However, apart from the attention paid to their weight, not so much attention is paid to the history of these cryptos. We hope this article will reveal a bit of their story.

Let’s get into it.

Bitcoin: A Short History of the First Cryptocurrency

In October 2008, the name Satoshi Nakamoto appeared on a white paper proposing the Bitcoin cryptocurrency. It wasn’t until January 2009 that Nakamoto mined the first block of the chain, effectively creating the first cryptocurrency called Bitcoin.

Bitcoin was created as a replacement for regular currencies, also called fiat. It offered decentralized solutions, peer-to-peer transactions, security, and anonymity for users. You also didn’t have to pay high transaction fees as is the case with fiat currency.

The first commercial transaction occurred in 2010 when Jeremy Sturdivant sold two Papa John’s pizzas to Laszlo Hanyecz for 10,000 Bitcoins. What a haul that could have been if either of them had kept the bitcoins.

Bitcoin remains the most valuable crypto despite its volatility. BTC currently has a market cap of about $380 billion and trades at around $19,700. This is despite the huge 57% regression the crypto experienced.

To date, Satoshi Nakamoto’s identity remains a mystery. But the pseudonym is largely assumed to belong to an individual or group of persons.

A Brief History of Ethereum

Vitalik Buterin, a programmer who previously had a great interest in Bitcoin, conceived the idea of Ethereum in 2013. He published an introductory paper to create a programmable platform from which anyone can deploy permanent and decentralized applications (dApps).

The concept was created by improving on the idea of blockchain and Bitcoin, which he claimed was too functionally limited.

In January of 2014, Ether (ETH) was announced at the North American Bitcoin Conference in Miami and put on sale for the first time in the same year. However, it wasn’t until 2015 that the blockchain was launched into the public market.

Since its launch in 2015, Ethereum has continued to evolve as a concept to make it more scalable and environmentally sound.

ETH currently has a market capitalization of about $170 billion and is trading at around $1,400.

Wrapping it All Up

Bitcoin and Ethereum remain the industry’s largest cryptocurrencies. Over the years, both networks have made increasing improvements, and the number of investors has now grown to a teeming population.

It may be difficult to predict the future of these coins, especially with the current plunge in the market. However, if there’s any future for crypto (which we believe there is), Bitcoin and Ethereum look like they’ll be part of it.

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History of Web3: Web1, Web2, and the need for Web3

The names Web1 and Web2 are simply used to imply different phases in the history of the world wide Web.

Web1

Web1 refers to a time from 1991 to 2004, the era of read-only pages completely different from what we have today. The static pages meant there was no user interactivity, and therefore, users were mostly consumers of online content. There were only very few producers because that required a lot of technical knowledge and financial capacity.

Web2 is the time we’re in now. Since 2004, more functionality has been integrated into Web Pages enabling users to read and write. This is what gave rise to the many content creators on the Web as we have it today, through the power of social media, blogs, and other platforms.

Web2

Web2 spelled a lot of growth for the human race but even more so for those platforms controlling online content. While these platforms make it easier for consumers to become creators, this is also at the expense of data privacy and security. These top tech platforms would record user data to position themselves for increased revenue, feed users more of what they want, and watch your business soar. Some even sell data to other agencies. This explains the core of the problem with Web2 and the need for a decentralized and user-centric solution.

Web3

Web3 is born not only to integrate all of Web1 and Web2 but to offer a solution to their inherent problems. It is a concept founded on creating a decentralized, user-centric Web founded on blockchain technologies.

However, for its history, the idea of Web3 was first mentioned in 2001 in an article titled “The Semantic Web”. And this idea was chaired by Tim Berners-Lee and a few more scholars whose thoughts formed some part of Web3.

However, it wasn’t until 2014 that Ethereum’s co-founder, Gavin Wood, coined the name. He proposed a decentralized online ecosystem based on blockchain technology to provide enhanced data privacy, user anonymity, and data ownership.

Today, the Web3 concept has been transformed from Berners-Lee’s idea in 2001 and has morphed into much more.

Possible Limitations of Web 3

Many have and continue to hail the concept of Web3 as a much-needed solution that would liberate users from the grip of central authorities. However, certain criticisms or possible limitations have been pointed out.

Let’s first point out clearly that Web3 is a concept for the future. It’s still in the works as today’s technology isn’t yet enough to realize it.

Furthermore, one of the loudest critics of Web3 is Jack Dorsey, Twitter’s former owner, who postures that Web3 isn’t as completely decentralized as it’s made to seem. Being a token-based economy, wealthy individuals or corporations could buy decision-making ability in their favor by purchasing as many governance tokens as they can afford. This may also imply that Web3 may not be affordable for all.

Finally, because the platform would be integrating many technologies, this may make it more difficult to use for beginners and restrict usage to specialized gadgets.

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If you’re reading this and wondering what Web 3 is and why it’s causing a lot of stir, you’re not alone. A lot of people have been trying to understand the concept, its features, and how that may affect everything. That’s what this article seeks to show.

So, What is Web3?

Web 3 is a set of emerging technologies for building distributed and decentralized applications. Established on blockchain technologies, Web 3 offers promises of introducing the third generation of the Internet — hence the reason for its naming.

The name Web 3 was coined by Gavin Wood, the co-founder of Ethereum as a follow-up to the Web 1 and Web 2 phases of the internet.

Web 1 refers to the era of static pages when online content was only created by top corporations. It is followed closely by the current Web 2 phase which introduced the digital world to the content economy but with the continued involvement of online power brokers such as Google and Facebook, etc. More on Web 1 and 2 comes in a later article.

Web 3, still very much a concept being worked on, introduces a new user-owned and user-controlled economy backed by blockchain technology. This means users worldwide track and compile data blocks for the internet to remain up. Instead of centralized Web servers, a network of peer-to-peer nodes worldwide will be responsible for making decisions and rules guiding the internet.

What Will Web3 Bring to the Table?

The Web 3 technology brings a lot of benefits to the table which would offer an upgrade on the current state of the internet. They are:

Decentralized Autonomous Organizations

DAOs refer to a system in which token holders are responsible for running the structure. Web 3 introduces tokenized organizations and completely revolutionizes the current idea of organizational hierarchies. Within DAOs, there’s no central authority but power is shared across all token holders who manage and make collective decisions. This will give rise to community-driven organizations and introduce more attractive incentives to every member.

Native Built-In Payments

Web 3 is bringing change to payments too.

Using crypto currencies and blockchain technology, Web 3 introduces a native built-in payment that is frictionless, and devoid of high-processing-fee-demanding “middlemen”.

Current payment providers have generated a lot of income through their complex payment systems which demand that users pay a lot to experience interoperability.

But with the integration of crypto currencies by Web 3, international and local payments can be easy and secure. Users won’t need to continue to go through the rigors of the current traditional payment system.

Many payment providers around the world are already testing the feasibility of Web 3 payments and its adoption across more providers is expected to increase as the launch nears.

Security

Blockchain tech makes it difficult to meddle with information because such has to be verified by several present nodes. As a result, this lessens the risk of attacks and makes Web 3 a very secure space.

‍No single point of failure

In Web 3’s decentralized system, data isn’t stored on central servers but in peers on a peer-to-peer network. The technology is such that if one of these peers goes down, the rest have all the necessary information to keep everything running as normal. This will drastically improve system downtimes.

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Cryptocurrencies are well-known alternatives to traditional currency, and Bitcoin and Ethereum are two of the most popular cryptocurrencies.

Although both are often mentioned in the same breath, they’re birthed from the same distributed ledger tech named blockchain. Yet, Bitcoin and Ethereum are not as similar as many people think.

So, what’s the difference between these cryptos, and how can you as an investor (or potential one) take advantage of either or both?

We will seek to explore and answer these questions in this article briefly.

What is Bitcoin and How Does it Work?

Bitcoin, the largest cryptocurrency, was invented in 2009 by Satoshi Nakamoto. It was created as an alternative with no centralized authority, such as a central bank or other third parties, to regulate transactions. Rather, using blockchain technology, Bitcoin created a secure environment where every transaction exists on a public ledger that’s difficult to manipulate.

Most validators (holders) on the Bitcoin blockchain must verify any transaction for the block to be added to the chain. Bitcoin uses a unique algorithm to encrypt the blockchain data, and validators must decrypt these to verify transactions. Because of these verification codes’ complex and random nature, it’s harder for anyone to manipulate or defraud within a transaction.

Bitcoin started with a next-to-nothing value but has dramatically risen over the years. Today, Bitcoin is commonly referred to as digital gold due to its high value compared with other cryptos.

Yes, Bitcoin is as volatile as other cryptocurrencies, but it remains the most valuable crypto in the market today. The Bitcoin network is powered by its own token, Bitcoin, commonly referred to as BTC.

What is Ethereum and How Does it Work?

Next to Bitcoin, Ethereum is the second largest cryptocurrency. It was launched in 2015 with a completely different focus from Bitcoin, to do much more than handle financial transactions.

Ethereum has its own programming language called Solidity. The language is used to create and deploy programs that can host decentralized apps (dApps). These programs are commonly referred to as smart contracts.

This shows that Ethereum was designed to improve Bitcoin, taking blockchain technology much further. According to Mauricio Di Bartolomeo, Ethereum’s drive is to be the world’s cloud computer. No truer words describe what this cryptocurrency offers!

The Ethereum network has its native cryptocurrency, which is known as Ether (ETH).

Bitcoin or Ethereum, Which One is Better?

There are similar risks involved when investing in either Bitcoin or Ethereum. Therefore the answer to the better choice between both cryptos may depend on what you’re looking for.

Bitcoin would be an excellent option as a peer-to-peer (P2P) transaction system, while Ethereum would be more valuable if you’re looking for a network where you can code and deploy smart contracts hosting dApps.

However, experts generally advise that keeping a broad portfolio, investing in both, may be a better approach. Just remember, investing in crypto should be a carefully calculated risk taken.

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This is altogether different from Proof of Work’s (PoW) which was the first sensation down history lane. Here’s the case for staking and why Proof of Stake was introduced.

The Case for Staking

Proof of Work, as its name implies, required that miners solve a complex mathematical equation to add new blocks and earn rewards. This, however, needed high computational power and consumed a lot of needless energy.

Enter Proof of Stake (PoS)

Proof of Stake (PoS) was first introduced formally as a solution to Proof of Work’s (PoW) high energy consumption problem. This was presented in an August 2012 paper by Sunny King and Scott Nadal who proposed an alternative mechanism referred to as “staking”. According to them, the choice of nodes would depend on the number of tokens any participant has. This implies that stakers (now referred to as validators) could stake more tokens to add blocks to the chain and reap the reward.

This staking approach forms the basis of the PoS consensus mechanism and was first implemented in a peer-to-peer cryptocurrency known as Peercoin.

Today, PoS offers other variations, one of which is the Delegated Proof of Stake (DPoS) from which the word delegation comes.

The Case for Delegating: Delegated Proof of Stake (DPoS)

After the introduction of PoS in 2012, it became evident that other consensus mechanisms could exist. Especially since PoS, despite its apparent benefits over PoW, wasn’t without its flaws. Most notably is the fact that wealthy stakers had an advantage since rewards were handed out based on how much is staked.

Nevertheless, this was addressed by Daniel Larimer in July 2014 when he implemented an improvement on PoS through the Delegated Proof of Stake (DPoS) consensus mechanism.

DPoS is a mechanism that allows participants to delegate the role of validation to another node. It has a similar approach to PoS but here, only chosen delegates participate in staking. The remaining participants can join indirectly by contributing to the staking pool of their preferred delegates which offers several advantages over the PoS approach.

Participants don’t have to assume any responsibility they would normally have resumed if they were the validators themselves. This means that if any participant doesn’t have the time or resources to stake, they can simply delegate the responsibilities to another.

The delegation approach also addresses and reduces the advantage problem for wealthy participants that is apparent under PoS. Anyone, no matter the value being held, can stake their tokens indirectly. Then, the block rewards are shared according to each user’s stake.

Laimer, former Chief Technology Officer of EOS, first implemented DPoS on BitShares in 2015. Since then, other blockchains such as EOS and Lisk use it.

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However, to properly understand these two concepts, it’s important to understand the Proof of Stake (PoS) mechanism better.

The Proof of Stake mechanism is a consensus mechanism algorithm that requires the participation node (miner) to stake tokens for continued participation in the network. It then rewards miners with mining power depending on the total stake amount. PoS is a low-energy approach and remains one of the most widely recognized alternatives to Proof of Work (PoW) today.

In a lot of PoS networks, two methods of staking tokens are recognized. These include staking and delegating.

Let’s consider both mechanisms in light of blockchain technology.

How Does Staking Work?

Staking is an investment approach within a blockchain network which was first formally introduced by Sunny King and Scott Nadal.

To better understand it, you can think of staking as buying stock and earning dividends on it. A particular value of the native network’s token is “staked”, the node becomes active as a validator who can work and earn block rewards.

With this investment approach, validators (also called stakers) are forced to comfort themselves and be honest because they tend to lose money for any malicious behavior. Within some PoS protocols, they suffer slashing- a mechanism in which the validator loses rewards for any misbehavior.

This reward and discipline approach for a PoS network helps to maintain security and retain decentralized control of the network.

Running as a validator is typically more rewarding, but it can be quite demanding because it requires greater personal commitment.

However, you don’t have to stake a validation node yourself if you can’t commit the effort. Validators can also pool value together to increase chances of winning, while also lowering the bar for anyone to participate in the pool. This engenders a fairer system where anyone can join the poo and earn rewards.

This is referred to as delegation.

How Does Delegation Work?

Delegation is widely-embraced within PoS protocols.

Delegation is a situation whereby anyone holding tokens earns block rewards by staking through an existing validation node. This means the holding participant (delegator) “delegates” their token to a staking partner (validator) who eventually earns a certain percentage of their block rewards.

How does this work?

Within the Proof of Stake consensus mechanism, more tokens increase the chances of a node being chosen to earn block rewards in a blockchain network. Therefore, as a user, you can delegate your holdings to boost the chances of another with reduced stakes to earn rewards.

This approach implies that the success of the validator here determines whether or not you earn rewards.

Even after delegation, you will retain ownership of the delegated tokens. However, these tokens will be inaccessible and locked up while they’re staked.

Conclusion

Staking and delegation are integral to the stability of the Proof of Stake consensus mechanism. You can stake and earn as a node validator or consider delegating to another. All in all, these mechanisms contribute to the general health of the blockchain network.

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However, little is known of its history and this article will provide a bit of historical insight.

The History of Blockchain’s Consensus Mechanism

The consensus mechanism was developed to solve the problem of ‘double spending’ common with decentralized systems, preventing fraud and ensuring trustless transactions.

Over the years, different kinds of consensus mechanism algorithms have emerged, with each working based on other principles. Thanks to Bitcoin and Ethereum, Proof of Work and Proof of Stake (PoS) remain the most common consensus mechanisms.

However, the consensus mechanism’s roots are buried deeper than these

Hashcash

In 1997, Adam Back, a prominent British cryptographer proposed the earliest version of the PoW consensus mechanism, Hashcash.

Hashcash is a cryptographic hash-based proof-of-work algorithm that requires much work to compute. Its concept was to limit spam on emails and Internet forums. In 2002, Adam Back described this concept more formally in his paper “Hashcash — A Denial of Service Counter-Measure”.

In this paper, every user must compute a complex equation before sending an email or making forum posts. Back’s logic was that spending more time computing an equation would reduce the number of times a slammer would have, thereby reducing the number of messages.

This is what formed the core (albeit with a more sophisticated implementation) that Satoshi Nakamoto used for Bitcoin’s Proof of Work.

Proof of Work (PoW)

Bitcoin launched in 2009, with Satoshi Nakamoto combining the Hashcash concept with blockchain technology to give better trustworthiness.

He was the first to apply the consensus mechanism concept to the digital currency context, making Bitcoin the first Proof-of-Work digital currency.

Miners have to solve a complex mathematical equation that requires high computational power. Whoever solves the problem can create the next block and receive the reward. This equation is difficult to compute but can be verified easily.

The first miner to solve the problem gets to create the next block and receives a reward for creating that block. Despite scalability concerns, PoW is regarded as the most secure and reliable of all consensus mechanisms.

Today, Bitcoin isn’t the only cryptocurrency using the PoW consensus mechanism. Ethereum, Dogecoin and others use it too.

Proof of Stake: The Next Steps after Proof of Work

The PoS consensus mechanism was proposed as an alternative to PoW in 2011. It runs differently from Proof of Work, even though both aim to achieve consensus. PoS was introduced to resolve the commonly-known problems of the Proof of Work.

The PoS consensus mechanism works by buying a stake in the network by depositing tokens. The node with the most coins in the blockchain network is perceived to be interested in maintaining the network and keeping its coin prices high.

Compared to Proof of Work, Proof of Stake is considered more environmentally friendly because it doesn’t depend on high physical resources and infrastructure. Today, PoS together with PoW are the most prevalent consensus mechanisms in blockchain technology.

Finally, Proof of Stake has several variations such as Delegated Proof of Stake (DPoS), Leased Proof of Stake (LPoS), Pure Proof of Stake (PPoS) etc.

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