Why PoS built on top of PoW is superior




Building a second layer blockchain on top of a proof of work (PoW) blockchain, such as Bitcoin, and using a proof of stake (PoS) consensus mechanism can provide several benefits over traditional PoS or standalone PoW blockchains: ‍

  1. One benefit is increased security through finality. PoW provides finality by ensuring that once a block is mined and added to the blockchain, it cannot be reversed or altered. This adds an extra layer of security to the network, as it makes it more difficult for a malicious actor to manipulate the blockchain.
  2. Another benefit is the randomized validator provided by PoW. In standard PoS models, a verifiable randomized function (VRF) is used to randomly select the validator for the next block. However, in this setup, PoW randomizes the validator, eliminating the need for an additional VRF (that could be manipulated).
  3. A third benefit is a reduction in centralization trends. PoS can be more susceptible to centralization than PoW as it is easier for a small group of wealthy individuals to acquire a continuous larger portion of the stake and control the network. However, by building on top of a PoW blockchain, the PoS network can avoid this centralization trend as the PoW aspect ensures that value leaks in the real world by the energy used in the mining process. ‍ Additionally, using a PoS consensus mechanism on top of a PoW blockchain allows for greater scalability for the PoW chain. PoS can achieve higher throughputs and transactions per second. This can make the network more efficient and reduce transaction fees for users.

Finally, building a second layer blockchain on top of a PoW blockchain allows for greater interoperability between different blockchains. The PoW blockchain can act as a bridge between the PoS blockchain and other blockchains, allowing for easy transfer of assets and information between networks.

In conclusion, using a PoS consensus mechanism on top of a PoW blockchain provides increased security, reduces centralization trends, increases scalability, and increases interoperability. These benefits make it a superior approach to traditional PoS or standalone PoW blockchains.