TOA is a POW/POS Hybrid Algorithm
A cryptocurrency ( TOA) has its own blockchain to store all the transactions that occurred.
The different methods of algorithm are called POW and POS.
These algorithms are used to achieve consensus on which block will be added to the next blockchain.
A simple definition of PoW -(Proof of Work) and PoS (Proof of Stake)
- PoW – requires proof that work of some kind occurred. In the case of Bitcoin, miners are required to do this work before any of their blocks is accepted by others.
– Proof of Stake (PoS)- requires users that have a high stake at the currency (i.e. hold a lot of coins) to determine the next block. This has a high risk of some party achieving monopoly of the currency but there are several methods to prevent that (by allocating random stakeholders to agree on a new block, and others).
TOA as a coin is a hybrid of POW and POS.
POW was used to mine the genesis block. Then to make sure that the blockchain works properly, we let POW to work for the first 1000 blocks.
Though POW is good, it allows miners to get free coins by just using their laptops or computers.
However, those coins kept in installed mobile wallets are not getting rewarded for keeping their coins.
So POS needs to be implemented, as the only way for you to get free coins is through actually owning coins. The number of free coins you get is based on the number of coins you store in your Desktop wallet (Windows, MAC or Linux) based on its staking rate which for TOA is at 2%.
So even though we’re POW/POS, the POW phase is already over so the only way to mine it is through staking of POS.
Some coins have gone through this phase as well. Etherium ( ETH ) is on its way to having POS in their system coming from POW as its origins.
How about some of the coins? What algorithm do they use?
Bitcoin, Litecoin and many others uses the PoW method.
NXT, BitShares and others uses the PoS method.
Ethereum uses PoW but is scheduled to change to PoS.
Peercoin uses a combination of PoW and PoS.
TOA IS A POW/POS HYBRID.
Additionally, some POW altcoins are shifting to POS due to several advantages of POS. TOA even at its infancy stage is now able to utilize the POS advantage.
ON VOLUME REDUCTION
- We do have 8.8 Billion total coins but only half of it can be used because we’re using the other half to secure the network.
2) Some coins especially those in POW suffered the 51% attack before.
In POW, the power is in the hands of the miners – because they’re the ones who confirm transactions while at the same time get free coins.
They can then sell these to the exchanges. 51% attack is a term commonly used when 51% of the total miners decide to edit the blockchain and force the remaining 49% to adopt to their blockchain. Their edited blockchain becomes validated because they are the majority coin holders. This means they can change their assets, balances and many more – then the remaining minority miners simply accept whatever they do.
Such is a possibility in both POW or POS systems. But with POS, you’re promoting a regular user to be a miner via staking – so if you want to have a 51% control of staking to be able to edit the blockchain, you either need to buy the 51% volume of the coin or simply wait for the time where 51% of the staking power is owned by you. (or by a certain group of people with large volume of coins).
51% of the staking power is more likely to happen than owning 51% of the total volume – primarily because not all wallets stake the same. The different wallets ( mobile, online , exchange wallets and other modes of wallets) stake differently.
For example, the total volume of the coin is 1,000,000 and the coins in non-staking wallets are 400,000. That leaves the total staking power to be at 600,000 which means 50% staking power is only 300,000. So if they were able to gather rich users and totaled themselves to own 300,001 coins that would give them majority power already.
With this, they can edit the blockchain to their desire then force the remaining minority of stakers to accept their version.
This is also more possible because not all desktop wallets by regular consumers are always on – meaning it creates less staking power , by the example above, not all remaining 600,000 coins are staking, some of those wallets could be off and non-staking – giving the chance of 51% attack greater. Though this is uncommon and not very easy, it has already happened to some coins.
So what we did was to keep the 51% of the coins to a couple of wallets that the public can monitor via the blockexplorer.
This 51% volume is in always-on systems to make sure that some 3rd party users won’t be able to conduct a plan to edit the blockchain to their advantage. So even if we have 8.8B coins, the only usable coin amounts to only 4.4B.
images sourced from googleimages.