Ouroboros Proof Of Stake Algorithm Explained
The Ouroboros Proof of Stake algorithm is arguably one of the crucial parts of the protocol. This unique protocol has changed the way nodes achieve network consensus.
Ouroboros itself has some historical importance as it was the first ever protocol to be used on a Proof of Stake algorithm that was both efficient and secured.
Proof of Stake algorithms are rapidly becoming more and more popular than its predecessor, Proof of Work.
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What is Proof of Stake?
Proof of Stake is a new methodology to approach block creation. Proof of Work algorithms traditionally used a lot of electricity so a miner could crack certain complex algorithms for transaction confirmation.
However, a Proof of Stake differs in that it helps a node for creating a new block which is based on the nodes current amount of coins in their possession.
Once a node demonstrates a positive stake, they are assumed as stakeholders. Additionally, once a node has created a new block successfully, then that node is referred to as a slot leader.
What is a Slot Leader?
A slot leader is vital for creating new blocks on the blockchain as well as running the entire protocol.
Slot leaders enjoy many responsibilities which include viewing transactions verified by other nodes, assign every block with secret keys, generate a block with a batch of transactions, and make it available on the network.
A slot leader is comparable to a bitcoin miner, however, you need to be elected to become one.
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Difference Between Epochs and Slots
The Ouroboros protocol is different from others in its time measurement. The protocol separates the physical time into epochs, and then subdivides those into slots.
A slot refers to a short period like 20 seconds, and has a single slot leader whos responsible for the specific slot. In turn, every slot leader is allowed to generate just a single block amid their assigned slots.
How Does A Slot Leader Elected?
Slot leaders are selected from a group of stakeholders on the network. However, not all of them are considered eligible for electoral participation.
Only the stakeholders with the most at stake are allowed to take participation and are referred to as the electors.
During every epoch, an election is held to make sure that the slot leaders are responsible for the next epoch.
Theoretically speaking, any stakeholder can be elected to be a slot leader. However, the more stake a stakeholder has, the better their chances are of getting elected.
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