Many inexperienced friends who are not familiar with blockchain tend to equate blockchain with Bitcoin, thinking that they are essentially the same. Such views are obviously biased. The role and significance of blockchain is more like the Internet, a general term, while Bitcoin is the most successful and important app among them.
But one thing we cannot deny: Bitcoin is where blockchain started. And Bitcoin’s consensus mechanism, Proof of Work (POW), also created a new model, with countless POW tokens as benchmarks, achieving computing power and value in the encrypted world. So today, let’s talk about POW tokens.
What is the value and core advantages of POW consensus mechanism?
POW consensus mechanism, also known as Proof of Work, was established by Satoshi Nakamoto along with Bitcoin. Its main purpose is to solve the consensus problem and ensure the validity and reliability of data. POW requires the node host to solve a complex mathematical calculation and publish the record on the network as evidence. If the solution successfully meets all expectations regarding the solution, the node can receive token rewards and be recognized by the network. It is worth mentioning that POW requires attackers to first split the computing power of the network, as solving mathematical calculations requires a lot of time and computing power, and the network’s computing power increases with the use of the system, making such attacks extremely difficult. It is precisely because of this that the POW model can effectively prevent organized malicious attacks.
For distributed ledgers, POW provides validity guarantees for data and achieves decentralization, making it possible to achieve security in large-scale networks. Typically, blocks in the network are verified based on mathematical calculations, which makes the original data more secure because the data can only be recognized when the calculations meet specific requirements.
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The disadvantages are also evident! What challenges does POW tokens currently face?
High security, high data guarantee, and decentralization… these are the advantages of POW that cannot be ignored. However, in order to achieve these core advantages, the POW consensus mechanism also comes with corresponding costs.
Firstly, POW consumes a huge amount of energy. As mentioned earlier, POW requires host nodes to solve complex mathematical calculations. These difficult algorithms require a large amount of computing power to support them, otherwise the proof of work cannot be completed. This inevitably leads to massive energy consumption. How much impact does this high energy consumption have on the environment? Is it sustainable? These are the questions we need to consider in the future.
Secondly, the POW mechanism has extremely high hardware requirements. To mine a POW token, specialized hardware equipment is required, which has a high entry barrier. This high barrier is not very friendly to ordinary investors and general users.
It is also worth mentioning that although POW intends to build a high-end situation of “whoever has the power proves it,” there is a hidden danger behind it: once an entity controls more than 51% of the computing power, it may launch an attack on the network, which is a great potential risk.
Pay attention! What are the shining POW projects in the current market?
POW is becoming mainstream, and POW tokens in the market are emerging like mushrooms after rain. Next, let’s take stock of the highly anticipated POW projects in the market this year.
KasLianGuai is a POW public chain built on the GHOSTDAG protocol. Compared with Bitcoin, KasLianGuai has an obvious feature, which is to change the structure mode of the blockchain. Bitcoin adopts a single chain structure, while GHOSTDAG adopts a Directed Acyclic Graph (DAG) structure: one block can point to multiple blocks.
KasLianGuai’s KAS coin was launched in November 2021, with a total supply of 28.7 billion and a circulation of 19.8 billion, accounting for 69% of the circulation. The market value has reached 750 million US dollars, and the Fully Diluted Value (FDV) has reached 1.08 billion US dollars. Since its launch, the price of KAS has risen hundreds of times. This achievement is inseparable from the powerful development team and solid foundation of KasLianGuai itself. Currently, KAS has a high market value (750 million US dollars) and ranks around 60 globally.
However, investors also need to pay attention that although the future of KAS is good, there is a large potential selling pressure. Early miners hold a large number of low-priced chips, and new chips are produced every day. If these chips are sold, it will have a huge impact on the price.
DNX coin is a virtual currency created by DNX Capital. It has built a decentralized financial ecosystem. The goal of DNX coin is to create a powerful management smart contract and a decentralized financial service platform.
The technical features of DNX coin include smart contracts, on-chain governance, and anonymous transactions. Among them, smart contracts are the core of DNX coin, providing developers with a fast and efficient way to build blockchain-based applications. In addition, DNX coin provides a decentralized financial platform that provides users with financial services such as reinsurance, microinsurance, and P2P loans.
DNX coin has recently performed well and has become a hot newcomer, especially because it has the advantage of “resisting ASIC mining” that other currencies do not have. However, we still want to remind everyone that DNX’s future business scope will involve microinsurance, P2P, and other aspects, which may have some suspicion of “gray economy”. Before investing, everyone should investigate, research, and calculate more.
What will be the future development of POW?
Since the appearance of Bitcoin, POW has entered everyone’s field of vision and has been around for 14 years.
Because it has been in the industry for too long, it has become the air and water in the industry, and it is a presence that everyone is familiar with. Perhaps because the starting point of POW is too high, the subsequent performance rarely impresses people, giving a feeling of “peak when debuted”.
However, there has always been a consensus in the industry regarding POW, which is “bear market looks at POW”. This means that in bear market conditions, when various problems arise in the industry and various methods fail, POW will once again enter the mainstream view and become the focus of attention.
After all, in a downturn, the main funds will withdraw from projects that rely solely on narrative-driven narratives (to put it simply, those projects that are famous only for telling a good story without solid technical support), and the remaining funds will become more pragmatic and gather around projects with objective value evaluation criteria, which are also related to POW.