Core Technologies

Proof of Stake

In the traditional "Proof of Work" model used by the majority of cryptocurrencies, network security is ensured by participants performing "work". They use their resources (calculation/processing time) to reconcile transactions with double costs and in order to impose extraordinary costs on those who attempt to collapse transactions. For this work, participants are awarded with PZM, and their frequency and amount vary depending on the working parameters of the cryptocurrency. This process is known as mining. The frequency of block generation, which determines each available reward for mining cryptocurrencies, as a rule, should remain constant.

As a result, the labor intensity of the work required to obtain rewards should increase as the network becomes more efficient. As the Proof of Work network develops, the individual user has less incentive to support the network, since their potential reward is distributed among more colleagues. In search of profitability miners continue to invest resources in the form of specialized, patented equipment that requires significant investment and high current energy costs. Over time, the network becomes more centralized as smaller partners (those who can do less work) drop out or pool their resources into pools. The Creator of bitcoin Satoshi Nakamoto, intended bitcoin network to be completely decentralized. But no one could predict that the incentives provided by Proof of Work systems would lead to the centralization of the mining process. This leads to potential vulnerabilities.

GHash. The bitcoin IO pool has reached 51% of bitcoin mining power in the past, and the top five bitcoin mining pools make up 70% of the hashing power of the network. The concept of decentralization is at risk of total loss. In the Proof of Stake model used by Prizm, network security is regulated by partners who have a stake in the network.

The incentives provided by this algorithm are not conducive to centralization as Proof of Work algorithms,and data show that the Prizm network remains highly decentralized since its inception: a large (and growing) number of unique accounts contributing blocks to the network, and five top accounts generate 35% of the total number of blocks.

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