Crypto Academy Season 3 Beginners' course - Homework Post for Task 4: consensus mechanism for professor [@sapwood]

Wow, really a nice and interesting tasks. This tasks will really help me learn more about the Proof of Work(POW) and Proof of stake (POS), their differences, advantages, disadvantages and scalability.

Question 1

What is the difference between PoW & PoS? Advantages & Disadvantages? Which one is better in scaling Capacity? Examples

Answer


Source

Differences between POW and POS

S/N	POW	POS
1	Large amount of energy is being put in.	less energy is being put in here.
2	Miners do market their coins to be able to foot in the bills of the large energy required.	validators don't need to plan of any bill has less energy is being required.
3	Low level of security.	high level of security.
4	With the security level(low), it can easily be attacked by hackers.	Due to high level of security it can not be easily attached by hackers.
5	Rewards are always given to the first miner that find solution to the cryptographic puzzle of a particular block.	validators are rewarded with the network fee.
6	We make use of Miners.	we make use of validators.
7	Here nothing like miners with large percentage of coin having large percentage of mining power.	Here validators with large coin percentage have large mining power.
8	it creation is alway link to Satoshi Nakamoto.	it creation is always link to Sunny King and Scott Nadal.
9	large amount of mathematical problems.	mathematical problems here are less.
10	Scaling capacity poor.	good scaling capacity.

Advantages of proof of work(POW)

Source

Advantages of POW

• 1t has a high level of security and by things it means that it Cannot be easily hacked, it thereby create trust to the individuals that there are in Safe hands and that their funds are safe.

• It is very easy for an individual to join
  In that there do not need enough requirements like KYC verification, all you need is to be ready to work and understand how the system is.

• It runs оn a decentralized system.
  This means there is no third party that is involved here you are the controller of your account and to you do not seek any permission before performing transaction but rather perform if place. you сan perform your own transaction and in your comfort zone

• Miner are being rewarded
  The first miner that is able to solve the cryptographic puzzle will be rewarded for the hard work done in finding solution to the puzzle

Disadvantages of POW

• The reward is only given to any of the miner that is the first to solve the cryptographic puzzle

• it has alot of mathematical problems

• it requires alot of power consumption

• cost to maintain power consumption is high

• it also bring about waste of time

Advantages of proof of stake(POS)

Source

• compensation is given to validators should incase the software get attacked
• No large amount of energy is required
• cost spent here is less because of the less amount of energy required
• less mathematical problems
• No time wastage

Disadvantages of POS

• Low security level. with the low level of as the will not be comfortable security individuals. afraid of loosing their funds to hackers or Scammers

• Easily attack
  Pos can be easily attack because the Security level is low meaning that hacker can easily hijacked if and go away with individual funds.

• Not easy for an individual to participates in that there is limitations as per the number of individual that should be involved

Which one is better in scaling Capacity?

Proof of stake has a better scaling capacity than the proof of work because it doesn't waste time when running a huge number of transactions and makes it easier for miners because it can be done once unlike the POW and also know it was created to solved problems POW was not able to solve, were the proof of work needs several computers involving in hashing functions to keep hashing until the outcome arrives at a point were there is minimum number of zeros. This is what makes the proof the work a little bit tedious.

Examples

For POW

• Bitcoin
• Titcoin
• Dogecoin

For POS

• Nxt coin
• Polkadot

For POW and POS

• Peercoin

Conclusion

I am really grateful for this lecture. I have been able to know more about the differences between POW and POS with their advantage and disadvantages. I also know why POS has a better scaling capacity than POW because it is time effective.

I want to thank prof @sapwood for this wonderful lecture