Hello everyone,
I trust you are all doing well today..
I'm glad we are.
Here is my Homework-task 6 post for professor @sapwood
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(1) What is the difference between PoW & PoS? Advantages & Disadvantages? Which one is better in scaling Capacity? Examples?
OR
(2) What is the difference between PoS & DPoS? Advantages & Disadvantages? Name a few Blockchain projects which use the DPoS consensus mechanism and indicate the scaling capacity?
OR
(3) Name a few Blockchain projects which use dBFT in combination with other consensus mechanisms? Indicate the scaling capacity? Explain dBFT along with the pros and cons?
I will be answering number 1 question
source
Before delving into the crux of highlighten the differences between the PoW and PoS,it is only imperative of me to first establish what these two aforesaid things means to a considerable extent.
I believe doing this will increase our chances of understanding the differences better and make our walk towards exploring the differences a child's play.
PoW
PoW otherwise known as proof-of-work is a consensus algorithm in the blockchain network. It is used in the process of verification and validation of transaction, recording of data and Information on the public ledger and also in creation of new blocks in addition to the blocks on the chain.
PoW consensus mechanism requires miners to solve complex mathematical and cryptographic puzzle to validate transaction and create new block,this inturn results to miners having to compete with each other to create a valid block to earn reward.This procedure is known as MINING in PoW.
The probability of miners being able to create valid block and earn reward is relatively low, because for a miner to be able to be the first to solve the cryptographic puzzle and validate the next block,speed and great hardware specs is a major factor which most times is a major challenge faced by miners.
While
PoS
PoS which is an acronym of proof-of-stake is also a consensus mechanism used in blockchain technology. This consensus algorithm work by the selection of block creator or validators using the quantity of stake they have in their possession as yardstick during selection process. This implies that the more stake in one's possession would determine the more wider the chance, privilege and opportunity a participant has to become a validator.
It is a consensus mechanism that banks on the concept of "using what you have to gain what you want",the more coin you stake is the more influence and mining power you possession on the blockchain during mining operation.
PoS was initially created as an alternative to the PoW which happens to be the original consensus algorithm on the blockchain technology.
Having understood what this two things means,I suppose now it is safe to delve into explaining the differences between the two consensus algorithm without any fear of creating confusion.
For better illustration,I will be making use of my little table to elucidate my point.
DIFFERENCES
| PoW | PoS |
|---|---|
| •mining operation is base and determined by speed and hardware specs (computer)of the miner when solving cryptographic puzzle to validate new block | mining operation is determined and based on how much stake or percentage of stake coin held by miners. |
| •The first miner to successfully validate a block by solving the mathematical puzzle gets the block reward | network fee is received as reward by miners instead of block rewards like the PoW. |
| •main Investment on the PoW is buying of hardware specs,so as to increase speed and chances of solving the puzzle before others | main investment on the PoS is staking of coin to increase mining power and influence and for building reputation on the blockchain. |
| •Costly and energy consuming | less energy consuming and not costly to operate. |
| •POW is slow in operation | it is faster in operation compared to PoW. |
ADVANTAGE OF PoW
•It is more efficient and secure
•It is use in validation of transaction without the need for intervention of middlemen or intermidiary.
•It makes use of strong mechanism to sabotage abuse and misuse in the blockchain.
•It operation depends on computation capabilities which inturn scare away "bad actors" from tampering with it, because the cost of tampering with it is more than the benefits they stand to gain.
DISADVANTAGE OF PoW
•it requires solving of cryptographic puzzle for mining operation in validating next block,this is most time tasking and arduous.
•it is slow and energy consuming and also costly in operation.
•A miner must have a powerful and well equipped computer with advance software in order to strive on the PoW consensus algorithm.
•Due to the cost of maintenance of the computer system use in mining operation and high consumption of electricity,the PoW blockchain has scalability limitations, which results into the slow down of the speed during transaction.
ADVANTAGE OF PoS
•PoS consumes less energy and low expansion of electricity to do work.
•It is more scalable
•It create room for free entry to anyone, since the investment there in is not expensive and cheaper to operate unlike the PoW that requires well equipped computer and consumes lot of energy.
•Transaction is cheaper and faster on the PoS because the PoS possess speed when transaction is being carried out.
•It will increase the request for cryptocurrency in the blockchain since PoS involves the staking of coin to gain more reward.
•It will as well ensure the stability of cryptocurrency price, because everyone would prefer to stake their coin as a means of investment.
DISADVANTAGE OF PoS
•Staked coin can't be sold until it is unstake and that is after the specified staking period.
•Mining abilities and power depends on the percentage of stake coin held by miners,this happens to be a disadvantage to smaller investors with little stake coin.
•The security efficacy is still not very much guarantee yet, since PoS is still new.
•PoS involves staking of coin,this inturn results into an unfavourable condition for investors,because you can not sell and stake your reward at the same time,it only offers the opportunity to do one,either stake or sell!
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Scalability is the limitation of blockchain to process several transaction or the ability to support imminent increase in load of transaction.
Having established what scalability means,it is easier to fathom which of the two consensus mechanism we've be talking about possess this attribute.
From a factual standpoint,the proof of stake {PoS} is more scalable when compared with the proof of work {PoW}base on the fact that it consumes less energy and it is faster in operation.
Speed and energy consumption has been one of the major challenges faced by the PoW but proof of stake (PoS) has proven it efficiency in this area and have bridge the gap,this inturn has aid the processing of thousands of transaction operations in seconds.
• ETHEREURM{ETH 2.0}
•TEZO
•NEO
•ETHEREUM{ETH 2.0}
ETH 2.0 is moving from proof of work (PoW) to proof of stake (PoS)consensus mechanism,which provides and allow faster transaction at lower rate and which consumes less energy. Ethereum network is the most used and demanded blockchain network network today with over 2800 DApp built on it,this inturn has created a kind of jam and scaling needs to be carried out,that is the more reason ethereum is switching from the proof of work (PoW) to the proof of stack consensus algorithm.
•TEZO{XTZ}
Tezo which local token is (XTZ) happens to be a multi purpose blockchain with in-chain governance that uses proof of stake algorithm for it operation. Fascinating thing is that,TEZO{XTZ}is the first proof of stack cryptocurrency that supports all major exchange for staking.
•NEO
The proof of stake (PS) and the proof of work(PoW) are both unique consensus mechanism,they both can be used in performing transaction operation..
Although,they they are good but we can't erase the fact that they tend to have negative effects during operation atimes..
Mining in the PoS is base on the quantity of stake coin held by a miner while in the PoW,it depends on the speed and computation capabilities of the miner to solve puzzle and earn reward.
I have come to fully understand everything about this topic,thanks to professor @sapwood for this wonderful and eye opening lesson.
special regards: professor @sapwood, @dilchamo
assignment by @dibie.
Thanks for reading through 🤗