Forging
Forging in cryptocurrency refers to the process of creating new blocks and validating transactions in proof-of-stake (PoS) and delegated proof-of-stake (DPoS) blockchains. It is an alternative to mining, which is used in proof-of-work (PoW) systems. Instead of solving complex mathematical problems, forgers are selected based on the amount of cryptocurrency they hold and stake in the network.
Forging is crucial for maintaining blockchain security, processing transactions, and distributing newly minted coins. In many PoS-based systems, forgers are rewarded with transaction fees and, in some cases, newly minted tokens. The selection process for forgers is typically randomized but weighted based on staking amounts, ensuring decentralization and network stability.
Key Features of Forging:
- Energy Efficient: Unlike mining, forging does not require high computational power, making it more eco-friendly.
- Stake-Based Selection: Validators (forgers) are chosen based on the amount of cryptocurrency they stake in the network.
- Rewards System: Forgers earn rewards in transaction fees and sometimes new tokens for securing the blockchain.
- Used in PoS and DPoS Networks: Examples include Ethereum 2.0, Cardano (ADA), and Lisk (LSK).
Forging plays a significant role in the evolution of blockchain consensus mechanisms, offering a scalable and sustainable alternative to traditional mining.