Industry heavyweights have joined forces to promote the awareness of proof-of-stake consensus protocols under an umbrella organization the ‘Proof of Stake Alliance.’
Proof-of-stake (PoS) is a consensus protocol deployed in a cryptocurrency network to achieve decentralized consensus. Unlike the energy-heavy proof-of-work (PoW) consensus mechanism, which uses computing power to secure the network, proof-of-stake secures the network through its users, who ‘stake’ their tokens to validate transactions.
The primary aim of the Proof of Stake Alliance (POSA) is to educate lawmakers, regulators and other stakeholders about the benefits of proof-of-stake, and to represent PoS interests in Congress.
“POSA’s initial objective is to bring legal and regulatory clarity to the nascent proof-of-stake industry. We believe that is among the most critical and high impact initiatives that our members can collaborate on, which will positively impact the health and success of the staking industry,” the organization states on its website.
Proof-of-stake is considered a more environmentally-friendly consensus mechanism with lower barriers to entry (as no specialized mining hardware is required). Proponents of PoS say that it has the potential to be more decentralized than PoW networks as miner centralization is not an issue.
The first cryptocurrency to deploy a proof-of-stake protocol was Peercoin in 2013. Since then, the number of blockchains that use PoS or a PoS-based consensus mechanism has ballooned to over 400. Most notably, leading blockchain networks EOS, Tron, Cardano, and Tezos use a PoS-based protocol to achieve consensus.
Ethereum is scheduled to move from proof-of-work to proof-of-stake in early 2020.
The inaugural members of the PoS Alliance include TQtezos, Interchain Foundation (Cosmos), Polychain Labs, Harmony, Enigma, Kava, Battlestar Capital, EON Staking, Blockfolio, Lukka, Cole-Frieman & Mallon LLP, and Multiplied.
Kava Labs stated in a tweet: “As part of our commitment to improving the ecosystem, we are proud to announce the Proof of Stake Alliance and its inaugural members,” while Interchain Foundation tweeted: “With so much at stake, it’s important to work closely with regulators on the future of our decentralized financial systems. We’re excited to be supporting the Proof of Stake Alliance.”
As part of our commitment to improving the ecosystem, we are proud to announce the Proof of Stake Alliance and its inaugural members.@alliance_pos@TQTezos@interchain_io@polychainlabs@harmonyprotocol@EnigmaMPC@Battlestarcap@eon_staking@blockfolio@LukkaTech
— Kava Labs (@kava_labs) August 5, 2019
In light of US lawmakers’ growing interest in figuring out how to best regulate cryptographic assets and decentralized networks to ensure consumer protection while still remaining open to innovation, the PoS Alliance was formed just at the right time.
The crypto asset industry needs to proactively engage with financial regulators and lawmakers to educate them on how blockchain networks work and how they can benefit both the economy and society as a whole. That is exactly what the PoS Alliance aims to achieve.