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modern world is constantly changing
THE regarding what’s happening, how it’s
happening, and its effect on us. Money is no exception. In
recent years we’ve seen a massive uptick in the popularity
of cryptocurrencies. These currencies operate on a
different type of monetary system than the one we’re used
CRYPTOCURRENCY: to.

They are powered by blockchain technology.
Proof of Blockchain is a big data ledger that many people
worldwide can access at anytime. Cryptocurrencies
have certain properties that allow them to operate on
Importance the blockchain, such as their limited number of coins
or tokens. These cryptographic tokens are held in
virtual wallets, which use specific keys to access and
send cryptocurrency. Here we will discuss the proof of
importance in cryptocurrency and how it works.

What is Proof of Importance

Proof of importance is a cryptographic algorithm
for blockchain-based networks that measure
value, determines which nodes contribute the most
computation time and power to which network, and
which nodes are rewarded with tokens or payments. NEM
created the PoI algorithm. It runs based on the activity of
a node’s blockchain account/wallet. If a user contributes
a high amount of action to the network, his importance
score will increase, and vice versa.

How does Proof of Importance Work

Proof of importance is based on the blockchain’s
value. This is an essential variable for measuring network
health. Proof of Importance is that the more valuable
one’s blockchain data is, the higher the likelihood of a
node being selected as a leader in block verification. By
selecting leaders based on the value of their blockchain
data, the network can deter Sybil attacks using the
highest quality node in the network. This is because
nodes with a higher value will work harder to maintain
their importance score, increasing their likelihood of
being a reliable leader for block transactions.

Why is Proof of Importance Necessary
Many people and companies in the blockchain space
use Proof of Work as their algorithm. Miners are given
token rewards for providing computational power to the
network. In theory, this sounds like a fair way to distribute
tokens and reward people for their contributions to the
network. The problem is that this can only work well if
there are a relatively large number of miners working to

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