Restricting access to update the blockchain can help to generate consensus more efficiently, since the cost of perpetuating disagreements is higher for validators with higher stakes. 

Restricting access to update the blockchain

Establishing a low or even a zero block reward reduces the potential gain from propagating disagreement. However, not updating the blockchain is still costly, since the ledger must grow for the coin to be exchanged, upon which usage its value depends.

Sufficiently low block rewards

Stakeholders have two incentives: initial coin holdings and block rewards. When block rewards are smaller, then initial coin holdings become the dominant incentive, and thus a modest block reward schedule encourages generating consensus.


Sufficiently modest block reward schedule

- Restricting access to update the blockchain
- Sufficiently low block rewards
- Sufficiently modest block reward schedule

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This consensus mechanism depends on selecting validators by their proportion of holdings. Cardano is an example of a blockchain that uses Proof of Stake.

Proof of Stake Protocol

Saleh, Fahad. (2021). Blockchain Without Waste: Proof-of-Stake. Wake Forest University. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3183935


Blockchain Without Waste: Proof-of-Stake

- Nothing-at-Stake problem
- Validator fraud
- Wealth concentration
- Double spending
- Staking pools

Concerns regarding Proof-of-Stake

Conditions for generating consensus with Proof-of-Stake

- Ability to generate consensus with low block rewards
- Scalability without incurring greater computational costs

Advantages of Proof-of-Stake

- Follow-the-Satoshi (FTS) algorithm
- Digital Signature Scheme (DSS)

Implementations of Proof-of-Stake

- Peercoin blockchain
- Nxt blockchain
- Decentralized applications (dApps)
- Algorand


Proof-of-Stake in practice

The Follow-the-Satoshi algorithm divides time into periods called time slots. Only one block can be added to any blockchain branch in any given slot.

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