Blockchain Validators and Proof-of-Stake Benefits

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Questions and Answers

What type of consensus algorithm is Ethereum moving to?

  • Proof-of-Stake (correct)
  • Delegated Proof-of-Stake
  • Proof-of-Work
  • Proof-of-Authority

What is the mainnet consensus protocol that Ethereum has been using?

  • Proof-of-Stake
  • Proof-of-Authority
  • Delegated Proof-of-Stake
  • Proof-of-Work (correct)

What must users stake to become a validator in Ethereum's proof-of-stake system?

  • 1 BTC
  • 64 ETH
  • 32 ETH (correct)
  • 16 ETH

What disadvantage is associated with Proof-of-Stake systems according to the text?

<p>Wealth concentration (A)</p> Signup and view all the answers

How are validators selected in Ethereum's proof-of-stake system?

<p>Randomly (higher probability with more stake) (B)</p> Signup and view all the answers

What is the main benefit of using a proof-of-stake consensus algorithm in blockchain technology?

<p>Reduced centralization risks (A)</p> Signup and view all the answers

How can someone become a validator in a blockchain that uses proof-of-stake?

<p>By sending a special transaction that locks up their coins (D)</p> Signup and view all the answers

What is one significant advantage of proof-of-stake over proof-of-work in terms of securing a blockchain?

<p>Reduced electricity consumption (D)</p> Signup and view all the answers

How does proof-of-stake aim to discourage 51% attacks compared to proof-of-work?

<p>By making 51% attacks economically expensive through penalties (D)</p> Signup and view all the answers

In terms of returns, how does proof-of-stake handle different amounts of staked coins?

<p>$10 million of coins offers 10 times higher returns than $1 million of coins (C)</p> Signup and view all the answers

What is the vision of Ethereum?

<p>To create a decentralized world computer for running smart contracts (B)</p> Signup and view all the answers

How does Ethereum differ from Bitcoin in terms of functionality?

<p>Ethereum does distributed data storage and computations, unlike Bitcoin (B)</p> Signup and view all the answers

What can the Ethereum client software do on your computer?

<p>Create new transactions, explore Ethereum's blockchain, run smart contracts, and mine for new blocks (B)</p> Signup and view all the answers

Which aspect is NOT a benefit of Ethereum?

<p>Centralized Data Storage (A)</p> Signup and view all the answers

What does Ethereum aim to create through its blockchain framework?

<p>A decentralized world computer for executing smart contracts (D)</p> Signup and view all the answers

What is Ethereum primarily known for?

<p>Running smart contracts exactly as programmed (C)</p> Signup and view all the answers

Which component of Ethereum acts as the execution runtime for the network?

<p>Ethereum Virtual Machine (EVM) (D)</p> Signup and view all the answers

In Ethereum, what is Ether used for?

<p>Executing smart contracts (C)</p> Signup and view all the answers

What does Proof of Work refer to in the context of Ethereum?

<p>A consensus algorithm used by Ethereum (D)</p> Signup and view all the answers

Who are the primary users of ethers in the Ethereum ecosystem?

<p>Developers who create smart contracts (C)</p> Signup and view all the answers

What is the consensus algorithm that Ethereum is moving towards?

<p>Proof-of-Stake</p> Signup and view all the answers

How much ETH does a user need to stake in order to become a validator in Ethereum's Proof-of-Stake system?

<p>32 ETH</p> Signup and view all the answers

What disadvantage is associated with Proof-of-Stake systems according to the text?

<p>Wealth concentration</p> Signup and view all the answers

What is the main advantage of using a proof-of-stake consensus algorithm in blockchain technology?

<p>Reduced centralization risks and ability to use economic penalties to deter attacks.</p> Signup and view all the answers

What phenomenon may result from rewards tied to stake in a Proof-of-Stake system?

<p>Rich get richer</p> Signup and view all the answers

How does proof-of-stake differ from proof-of-work in terms of energy consumption?

<p>Proof-of-stake does not require large quantities of electricity to secure the blockchain.</p> Signup and view all the answers

What is the primary underlying mechanism that takes users who deposit enough stake as validators in Ethereum's Proof-of-Stake system?

<p>Proof-of-Stake</p> Signup and view all the answers

What is the potential impact on coin issuance in a proof-of-stake system?

<p>It may be possible to have negative net issuance over time.</p> Signup and view all the answers

What is a major difference between Ethereum's current Mainnet and the Beacon Chain?

<p>Mainnet uses Proof-of-Work, Beacon Chain uses Proof-of-Stake</p> Signup and view all the answers

How does proof-of-stake handle different amounts of staked coins in terms of returns?

<p>$10 million of coins will yield exactly 10 times higher returns than $1 million of coins.</p> Signup and view all the answers

What risk does proof-of-stake aim to discourage with economic penalties?

<p>51% attacks are made vastly more expensive to carry out.</p> Signup and view all the answers

How does proof-of-stake combat economies of scale compared to proof-of-work?

<p>Reduced centralization risks as economies of scale have less impact.</p> Signup and view all the answers

What is the primary purpose of Ethereum?

<p>To run smart contracts that execute exactly as programmed without any downtime, censorship, fraud, or third-party interference.</p> Signup and view all the answers

What key feature distinguishes Ethereum from traditional systems in terms of executing contracts?

<p>The ability to run smart contracts without the possibility of downtime, censorship, fraud, or third-party interference.</p> Signup and view all the answers

What is the Ethereum Virtual Machine (EVM) primarily responsible for?

<p>Providing an environment to execute code written in smart contracts.</p> Signup and view all the answers

In the context of Ethereum, what is Proof of Stake (PoS) used for?

<p>To enforce negotiation between two parties exchanging smart contracts.</p> Signup and view all the answers

What is the key benefit of using a Proof of Stake consensus algorithm in blockchain technology?

<p>To discourage 51% attacks compared to Proof of Work.</p> Signup and view all the answers

What type of consensus algorithm is Ethereum transitioning towards?

<p>Proof of Stake.</p> Signup and view all the answers

What is the main difference between Ethereum and Bitcoin in terms of block time?

<p>Ethereum's block time is shorter.</p> Signup and view all the answers

What is the Proof-of-Work mining challenge called in Ethereum?

<p>Ethash.</p> Signup and view all the answers

What is Ethereum's plan regarding the consensus protocol to move away from electricity-expensive mining?

<p>Move to a more energy-efficient Proof-of-Stake protocol.</p> Signup and view all the answers

What is the native cryptocurrency of Ethereum?

<p>ETH.</p> Signup and view all the answers

What is the timeframe for block creation in Ethereum compared to Bitcoin?

<p>Around 12-14 seconds in Ethereum, much shorter than Bitcoin's ~10 minutes.</p> Signup and view all the answers

What type of consensus algorithm is Ethereum planning to transition to for more energy efficiency?

<p>Proof-of-Stake.</p> Signup and view all the answers

Describe the vision of Ethereum.

<p>To create an unstoppable, censorship-resistant, self-sustaining, decentralized world computer that can run smart contracts.</p> Signup and view all the answers

What does Ethereum aim to achieve with its blockchain framework?

<p>Ethereum aims to enable faster results and settlements, facilitate global and remote participation, and ensure the integrity of recorded votes through immutable records.</p> Signup and view all the answers

How does Ethereum differ from Bitcoin in terms of functionality?

<p>While Bitcoin focuses on distributed data storage, Ethereum goes beyond that by also enabling distributed data storage plus computations.</p> Signup and view all the answers

What is the primary benefit of using a proof-of-stake consensus algorithm in blockchain technology?

<p>One significant advantage is the energy efficiency compared to proof-of-work algorithms.</p> Signup and view all the answers

How can someone become a validator in a blockchain that uses proof-of-stake?

<p>Users can become validators by staking their own coins as collateral in the network.</p> Signup and view all the answers

What must users stake to become a validator in Ethereum's proof-of-stake system?

<p>Users must stake Ether, the cryptocurrency native to the Ethereum network.</p> Signup and view all the answers

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