- What is the difference between PoW & PoS? Advantages & Disadvantages? Which one is better in scaling Capacity? Examples?
In this section, i will first of all explain what POS and POW means in my own understanding before listing the differences.
PROOF OF WORK
Bitcoin has this model called Proof of work. Proof of work is a meritocratic lottery, so basically, you have a miner and a miner is sitting there all day long and its computing magic numbers looking for a certain number like a ticket to win. every second its been able to compute a set of potential ticket to win and eventually a miner get lucky anr one of those turns out to be a winning set and then this gives the miner the right to advance bitcoin. This happens every 10 minutes and the difficulty increases over time as more people participate. As difficulty goes up, proof of work gets more centralized.
Proof of work in short form is known as POW. In proof of work method, this is where verification, recording of data l, forming new blocks are carried out. Furthermore, proof of work is an algorithm or method that makes use of significant amount of effort to deter or remove fake uses of computing power launched on the bitcoin network in 2009.
Proof of work was designed to solve the problem of double-spending, which if unchecked could be a major issue for crypto projects. Proof of work is a vehicle really by which somebody can effectively prove to you that they have engaged in a significant amount of computational effort. Proof of work protocol often amount to puzzles and these puzzles can, on the one hand, be challenging to solve and by that, they requires some serious computational effort. This effort can be easily verified and it can be verified in far less time than it took to conduct the effort in the first place.
PROOF OF STAKE
Proof of stake in short form is known as POS. Proof or work and proof of stake are attempting to achieve the same thing. Proof of stake is used in mining crypto coins or validates block transaction. According to the number of coins held, the more coins owned by miner the more power they hold to mine. Proof of stake is just a consesus tool used by blockchain netoworks for arriving and distributing consensus. Users on the network stake already helped cryptocurrency to grow and become validators on the network. Validators are the ones that orders transactions and create new blocks. Altcoins uses the PoS concept. The proof of stake activates mining power to a number of coins held by a miner.
Though using the explanation above, we can highlight the differences between them.
| POW | POS |
|---|---|
| Proof of work requires nodes in the network to perform a complex mathematical puzzle also called mining as a way of verifying the legitimacy of transactions on the network, this mathematical puzzle has a key feature asymmetry, the work must be hard for the miner to solve but easy for the network to check. All the network miners compete to be the first to find a solution through brute force that requires a huge number of attempts as a reward for verifying these transactions and they are paid cryptocurrency from the network, once verified, the transactions are placed on the block and appeared to the public blockchain. The difficulty of this puzzle increases proportionally to the amount of computing power in thr network, i.e working on the puzzles that is to say, the more miners they are, the more difficult the network makes it to verify transactions and earn the reward. The competitive nature of the difficulty increase incentivizes miners to optimize their ability to solve the puzzle and thus optimize their ability to verify transactions. This makes maintaining the intergrity of the network a competitive system with rewards fot those that do it well. In order to take over the network, one would have to control 51% of the computing power of the network given how large major blockchains are, that will br difficult though not impossible. | in proof of stake system, there is no puzzle to complete and so no rewards for doing so, instead, the miners take a feat from every transaction. This also means that because nobody is competing to solve every block. There's no massive energy requirement. The penalty for trying to harm thr network, is the possibility of loosing the money you've staked, which could easily be upwards of $10,000. In order to take over proof of stake network, one would need to own 51% of the supply of the cryptocurrency on that chain. This would be a prohibitively expensive undertaking for any major network and its less likely to happen than controlling 51% of the computing power, something that can already be achieved by mining. |
| Proof of work miners need a lot of energy to solve their puzzles. Verifying one bitcoin transaction with proof of work requires the same amount of electricity as 1.57 American hosuehold use in a day. | proof of stake lifts the massive energy requirement for the network in favor of monetary penalty for bad actors. Developers worrried about this energy problem, wants to switch to the proof of stake method or system for a greener and cheaper form of consensus. |
- Proof of stake is an eco-friendly of crypto mining
- It removes the node for high powered computational hardware to build a consensus algorithm.
- It is very easy for an average investor to participate and thus is a more decentralized mechanism.
- It allows punishment for the bad actor and distincentives them by reducing their stake in the blockchain network.
- The incentive and punishment system are clearly define in POS
- Proof of stake does not need heavy investment.
- Proof of stake method may start favoring wealthy users sometimes.
- Adding punishment and rewards means adding new variables in the algorithm and extra testing.
- A security weakness may arise if algorithms are not written correctly.
- It is relatively unproven as compared to Proof of work, and not many popular crypto network use it.
- With the expansion in the network, security tends to become risker with increase pressure.
In proof of work, we also have advantages in it , which i will list below.
- The good thing about proof of work is that, the more the rate of cryptocurrency increases, thats the more miners are increasing on the network, and also, when miner are adding in number, it will make the network be safe and on the other hand givr it more energy.
- when the power is being used, it will be hard for the bad guy to fool the blockchain.
- In proof of work, in order to verofy transaction, you dont need a negotiator.
One of the disadvantage of proof of work is that, it uses high energy to operate.
It consume a lot of electricity in order to maintain thr system.
Proof of work is very slow comparing to Proof of stake and also at same time consume or requires high enery to operate.
Comparing to this two method in which one that has a better scaling capacity, as i have mentioned or stated above, i will say that proof of stake has more scaling capacity more than proof of stake. Why? In proof of stake, transactions are more faster and it can carry out or executes as many as possible transactions within a second, to show how fast it is. Miners are also moving from POW to POS.
Below are coins that are using the proof of stake system.
| COINS | SITE |
|---|---|
| ARK | LINK |
| ICON [ICX] | LINK |
| COSMOS [ATOM] | LINK |
| KYBER [KNC] | LINK |
| ZILLIQA [ZIL] | LINK |
CONCLUSION
I really appreciate for a nice and well detailed lecture, i really learnt a lot