The cryptocurrencies use the blockchain to record information about their transactions. The key to the operation of the blockchain is that the network must collectively agree on the information to be registered, that is, instead of having an authority to maintain and validate each data sent, such as a bank per example, this validation process is done by all in a decentralized way.
To understand a little better how these validation processes occur within the blockchain, we have to mention the 3 main types that exist: PoW (Proof of Work), PoS (Proof of Stake) and LPoS (Leased Proof or Proof of Leased Participation).
PoW is the system used by Bitcoin. In it, the miners – who are the ones who put their computing resources to validate the transactions in the network – are led to solve the mathematical algorithms. The greater the computational power, the greater the chance of a determined miner to solve the algorithm, adding the transaction to the next block of the network and receiving a small reward for the work test performed, which in Bitcoin’s case are fractions of the coin. As it is a process that involves the use of computers with graphic cards and that in theory, should be in operation 24 hours per day, seven days per week, the cost with electrical energy is considered quite high in this type of mining.
Already in PoS, used by Decred currency for example, users are mining nodes, but unlike PoW, you do not need a latest generation computer. The blocks are validated among miners who have more coins in their wallets. As a rule, the more coins a network participant has in his or her wallet, the greater its “mining power” in this system.
And finally we arrived at the LPoS system, which is used by the Lunes Cryptocurrency. In it, users lend their cryptocurrencies to some “node” for them to do the mining, this process is called leasing. All the nodes – who are that make the transaction of validation- in the network participate in a draw to validate the information that has emerged. The more cryptocurrencies this node has, the greater the possibility of it being chosen for the validation of the information and receive part of the rate involved in the process.
The nodes distribute their benefits among their leasers – who are the ones who lent their coins – at certain times, according to each node. The interesting thing about this model is that the coins do not leave the user who has lent them and the user still increases the amount of coins on his possession due to the reward he receives for participating in the leasing.
The main benefits of the LPoS system are:
Ecological and do not need latest generation computers and not much electricity;
Even if you have few Cryptocurrencies, you will receive the proportional rewards for participating in the leasing;
Anyone who has the habit of the holding, can keep leasing and increase their balance even with the currencies stopped and can cancel when they wish.
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