Anyone who has paid even remote attention to the cryptocurrency market knows that it has evolved significantly. Cryptocurrencies have grown from being just some assets that no one hardly knew anything about to being the vanguard of the new age.
In a world where technology has pervaded everywhere, it’s not difficult to see the changes. Artificial intelligence is revolutionizing every aspect of work and human living, while the Internet of Things (IoT) is also changing the way we live. However, when it comes to payment and financial services, nothing stands even close to the type of influence that cryptocurrencies have had.
Bitcoin and its mining problem
As expected, the most popular cryptocurrency is Bitcoin. Apart from enjoying the incumbent power that comes with being the first, Bitcoin has grown to become a highly valuable asset for anyone who holds it. The asset fills several uses, including but not limited to payment, asset transfer, and even investments.
Currently, Bitcoin’s popularity is through the roof. Every developed economy most likely has a thriving Bitcoin community- with the sole exception of a few that have chosen not to accept it. However, the fact that Bitcoin is so popular doesn’t mean that it doesn’t also come with some problems of its own.
As things stand, the most significant or Bitcoin’s issues is its mining module- Proof of Work (PoW). When it was first introduced, PoW mining seemed like the perfect system. Given that it provided Bitcoin, many just went with the flow and continued to make use of it. However, things soon changed and the problems of this mining algorithm was eventually unearthed.
In a distributed PoW algorithm, miners will need to work with a lot of electricity. Research has shown that validating a single Bitcoin transaction will need the same amount of electricity to power almost 2 American households in a single day. This energy is paid for in actual money- a factor that has played a significant role in causing a downward pressure on Bitcoin’s value.
Proof of Stake isn’t perfect as well
So, developers began to worry that this problem will eventually cause Bitcoin to be less profitable to mine. There’s also the fact that the PoW mining algorithm for Bitcoin could led to some damaging effects for the environment- especially in places where mining farms are located and based. Rewards for PoW were also found to be non-proportional. In some cases, a miner could end up not owning any of the Bitcoin he or she mines.
For a cheaper and more eco-friendly distribution of access and coins, there needs to be a way to make things better.
So, in came Proof of Stake (PoS). In this mining format, the consensus mechanism is made virtual. The overall process might remain the same at the PoW module, but the method of getting to the overall objective is much different here.
In PoW, miners are made to solve difficult puzzles with their mining rigs. In PoS, however, we have validators instead of miners. These validators are in charge of locking up some of their currency as a means of maintaining some stake in the ecosystem. Then, they bet on the blocks that they believe will be added to the chain next. When the block that they bet on it added, they get rewards in proportion to the amount of their stake.
Bitcoin Ultimatum: Disrupting the crypto space with the LPoS and PoA algorithms
Then, there’s Leased Proof of Stake (LPoS)- a new algorithm that is bringing even more of a twist to the mining space. LPoS combines Proof of Stake (PoS) and Proof of Service (PoSe). Here, anyone is able to earn a cryptocurrency by leasing their coins to a supernode- as opposed to having to worry about purchasing masternodes or being a core member of a mining community. The coins leased are frozen up until a specific point, and when they’re released, the owner could get between 8% and 12%- depending on the leasing period.
The beauty of LPoS is the fact that you can quit leasing whenever you want. All you need to consider is choosing the right node operator.
LPoS is currently seen as the next big thing in mining, and it forms the basis of existence for Bitcoin Ultimatum (BTCU)- a new fork of the original Bitcoin blockchain that is set to change how cryptocurrencies are seen.
Bitcoin Ultimatum was created by the Prof-it Blockchain development team, with the support of the leading cryptocurrency exchange Coinsbit, which was co-founded by Nikolai Udianskyi. The asset combines Leased Proof of Work with Proof of Authority, with each handling the mining and transaction validation processes respectively. Upon the launch of the fork, an airdrop will be conducted to Bitcoin network users, so they can find the BTCU network. All you need to do is enter your BTCU wallet address, and you can join in.
The BTCU blockchain will use just 20 validators. This way, it prevents an increasing level of centralization that has also been a problem for PoW blockchains. 10 validators will be chosen by the development team, while the other 10 will be chosen by members of the community on the Proof of Authority basis.
The BTCU developers also understand the fact that a lot of people who step into the cryptocurrency space do so to enjoy greater degrees of anonymity with their transactions. To ensure privacy and security, the BTCU blockchain will utilize smart contracts which will ensure that users don’t need to employ intermediaries to protect themselves. In addition, the development team is working on launching a multi-currency crypto wallet that will provide users with the ability to send BTCU and other Bitcoin-like digital assets through their phone numbers.