Goodbye Mining! Why I Dumped my Rigs for CloakCoin’s Anonymous Staking

What’s up everyone! So, as promised this week we are diving in and taking a much closer at cloakcoin So were going to be looking at the proof of stake network style, and were also going to be digging into the anonymity side of things with the enigma routing protocols

But first were going to just jump in and real quick im going to show you guys just how snappy a cloakcoin transaction is Alright, so I just wanted to show you guys how quick a cloakcoin transaction is on this proof of stake network So I’m just going to take my mobile address, copy it over here, and were just going to do a test run with 100 cloak real quick So were going to click send here, and it’s going to ask me for confirmation, need to put in my password real quick If I haven’t mentioned this before, security is important, have a strong password

So we’re going to go, click send… And there we are, so we’ve got our transaction right there, it’s on the explorer; under sixty seconds Really quick guys Alright so as you can see, the transaction speed is like off the wall fast I know personally I’ve waited for sometimes, with low transaction fees, like six plus hours for a bitcoin transaction to actually go through So obviously there’s some serious advantages there

But what I really want to talk about is proof of stake and how that network works I’m not going to get into like, the nitty gritty of proof of stake, we’re actually going to come and hit that at another time But I’m going to talk about kind of why its a necessary development in the crypto space and what kind of makes it differ from these proof of work projects And really to kind of understand this, the first thing we have to do is take a look at how proof of work transactions are really processed So the big takeaway for this talk, is when you’re doing proof of work mining, basically these transactions are being processed by people “miners” that are just doing cryptographic number crunching essentially

And usually proof of work miners work in pools because the difficulty goes up and up and up And for a single miner to solve a block is nearly impossible these days So they pool together and they basically chase blocks Now this really has kind of a, its a bit of a double edged sword It does bring people from the tech side to a project because mining does incentivize people to come and process the transactions as it does pay out

But the other side of this is its more susceptible to things like Bitmain, which as we’ve seen with the production of these ASICs it really is kind of separating further and further from the decentralized goal of cryptocurrencies because really, your dealing with a third party thats processing these transactions And nobody within the network has any incentive to do that work But proof of stake, it’s all on the network, and that’s the beautiful thing about it Basically with proof of stake, the people that hold the coins, can go and make choice to “stake their coins” And instead of going out to a third party miner where it’s going to be processed and then written to the blockchain, it basically says that if you are part of the network and you have these coins up and out there, that you can be chosen from the entire network pool

Randomly And basically you can sign those transactions So any of the “mining” that’s done to write transactions to the blockchain on a proof of stake network is entirely in house So it really incentivizes the people that are holding the coins to participate in the network Because all of those fees that would normally go to miners are just distributed evenly to the people that stake

So it’s really a much more decentralized network and its a very important thing going forward in the crypto space Because at this point, you know the total proof of work mining power consumption, was 013% of the entire global power usage

That might not sound like much, but for a new emerging technology to be using more than a tenth of a percent of the global electricity is just crazy You know, were going to have to address this eventually, and I think the people that are looking at proof of stake, they are already set up and ready for that future proofing Alright, so CLOAK itself actually offers I believe right now they’re actually migrating to a five percent annual staking reward Now it was six percent but they’ve actually been a completely self funded project from day one And they’re currently setting up a development fund which will be using one percent and actually going towards development

I look at that and personally I say fine because they’ve been doing everything out of pocket It is what it is, you gotta do what you gotta do But I’m gonna kinda dive in here we’re gonna take a look at some of these minting transactions so you can see that, you know the payments are coming through, its very simple I just simply, go over, I unlock my wallet Put in my password

Little bit long of a password And, that’s really all it takes to start minting Once you do that you are staking your coins and you can start earning rewards It really is a super super simple process and you know, where mining, its power hungry You know it reduces decentralization

I think this is a really killer aspect of the cloakcoin project Alright, so we touched on the proof of stake side of things But obviously the other big draw to CLOAK coinis the anonymity factor Now, those of you that have been following the channel since its inception know that I started out, actually, as a mining guy And as I got more into cryptocurrencies I’ve moved towards the staking coins

But you know one of the first coins that I mined was actually ZCash And they introduced zk-snarks And that was really kind of my first taste of a privacy coin as well Now, CLOAK coin is kind of where I’ve migrated to for privacy There’s, Monero as well which uses I believe, they’re using ring ct

And you know there’s many different types of anonymity protocols out there, but what’s so cool about what CLOAK does is , they’ve really kind of fused a couple together So you know, just like any of the traditional privacy coins, they do use broken cloaking addresses So the address and the payment is actually split multiple ways And it’s harder to track this way But they utilize what they call the enigma protocol which is very similar to the TOR networks onion routing

But instead of actually being on the TOR network like I believe Verge, is actually linked in if I’m not mistaken Or no, excuse me, sorry We’re talking about Deeponions there that’s connected directly in But anyways, so it’s very similar to the onion routing on the tor network but its done intranetwork on the Cloakcoin proof of stake network Now basically the way that this works and helps improve anonymity is…

If you think of almost a chain of people If the transaction is going out to personfrom person a to person b

Basically it will be split in a long chain going across And person one in that chain will get a little section of it, it won’t get the full transaction and then that will go off to the second person with a different amount And basically the key to the onion routing is that every person in this routing chain basically just sees the person before them and the person after them So there’s no single person that ever sees an entire section of that transaction So you get all these little itemized bits and pieces

So looking at it on the blockchain explorer, if you’re trying to track this, it’s pretty much impossible You know, they just finished a Cognosec security audit And they actually were found to have the best privacy protocols out there on the market right now And it really really is interesting to see it working in action because the other beautiful thing about this being paired with their proof of stake network, is the transactions are seriously just as fast Alright so I hope you guys enjoyed getting a little more insight into how the cloakcoin ecosystem works

You know, give us your thoughts What do you think of the proof of work vs proof of stake battle? Do you think it’s good to keep the miners in the network or do you think that eventually proof of stake will take over? You know were interested, let us know down in the comments below And if you have any questions about the proof of stake network or the enigma protocol and how it works drop us a line We’ll be glad to get back to you Anyways, if you liked this video give us a like and a follow, we’ll see you next time!

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