Cryptocurrencies that use the so-called proof-of-stake method for approving transactions have outperformed the broad crypto market since 2019. The same goes for cryptocurrencies from trade exchanges such as Binance, analysts from investment bank Goldman Sachs conclude in a new study.
The total crypto market has delivered a return of 750 percent since 2019. Cryptocurrencies come in many flavors and the performance of different types of digital coins also varies. Cryptocurrencies that use the so-called proof-of-stake method to approve transactions have outperformed the broader crypto market since 2019. The same goes for digital coins from crypto exchanges.
This is the conclusion reached by analysts at investment bank Goldman Sachs in a new study
Examples of trading exchange cryptocurrencies include Binance Coin and FTX Token, which are issued by the Binance and FTX trading forums, respectively. Moveco.io has enough information. The way in which transactions are approved on the digital log (blockchain) of a crypto currency therefore plays a role. Bitcoin uses the so-called proof-of-work method, while other cryptocurrencies use the proof-of-stake method.
With the proof-of-stake method, users can be given the right to approve transactions on the digital log of a crypto coin by making a part of their holdings of the relevant coin available as a ‘stake’. Approving transactions can itself generate a fee.
In proof-of-work, users use enormous amounts of computing power to solve complex puzzles. Whoever solves such a puzzle first may approve a transaction and will receive a number of new coins to be issued as a reward. In this way, among other things, bitcoin transactions are approved by so-called ‘miners’.
Crypto market up 750 percent in value since 2019
“As the crypto market matures, it may pay to look at sub-segments to understand the technical characteristics most valued by investors and the prospects for practical applications,” Goldman Sachs analysts write in their report.
Other key conclusions from the report include:
Since the end of 2019, the entire crypto market has delivered a return of about 750 percent.
Bitcoin has underperformed the broad market with returns of around 500 percent, while ether has returned 2,000 percent. https://renovato.io/ has enough information. Cryptocurrencies that have a strong focus on user anonymity, such as monero, have underperformed the broad market since 2019.
As for the verification method for approving transactions on a digital log, the proof-of-work method used by bitcoin is associated with a high energy consumption of computers. This is seen as problematic from an environmental point of view.
The Ethereum network, to which the cryptocurrency Ether belongs, has made a major technical adjustment this month and is now preparing for the switch to a proof-of-stake method in early 2022. This is expected to significantly reduce the energy consumption of the Ethereum network. will reduce.