PoW Vs PoS

PoW vs PoS
What Is PoW?
PoW stands for Proof of Work. In the Blockchain network, the original consensus algorithm that
is used is PoW.
PoW is widely used in the Blockchain world for mining new tokens and validating transactions.
Proof of Work made it possible to process Peer-Peer transactions of Bitcoin and other
cryptocurrencies securely without the interruption of any trusted third party.
The mechanism of Proof of Work works in a way that confirms transactions and produces new
blocks to the chain to make the transactions fast and secure. The miners in PoW compete against
each other to complete transactions and earn rewards in the form of cryptocurrency.
It is a system that is designed to prevent double-spends on transactions. Most of the major

cryptocurrencies use this mechanism as it is a secure cryptocurrency ledger. It was launched
back in 2008 along with the Bitcoin emergence. PoW working consists of miners and the
electricity they expend to make the calculations that verify BTC transactions.
Best PoW Coins
● Bitcoin
● Ethereum
● Bitcoin Cash
● Monero
● Zcash
● Litecoin
● Ethereum Classic
What Is PoS?
PoS stands for Proof of Stake. It was created as an alternative to PoW and mainly designed to
overcome the shortcomings of PoW like lack of speed, poor scalability, inefficient energy
consumption, and a high barrier to entry.
In PoS, a miner is able to mine and a validator is able to validate block transactions depending on
the amount of coins a miner holds.
Peercoin in 2012 used the first-ever PoS protocol for its transaction. Other cryptocurrencies have
followed the algorithm as well after seeing its potential benefits. Recently, the Ethereum
Foundation has also announced a plan to switch Ethereum from PoW to PoS within 2021.
PoS is a blockchain algorithm whose mechanism works in such a way that activates validators
upon receipt of enough stake. Let’s explain it with an example, like Ethereum, the users will
need to stake 32 ETH to become a validator, however, the limit may vary depending upon the
values of the cryptocurrencies. The validators in PoS are chosen at random to create blocks and
they are also responsible for supervising and confirming the blocks they didn’t create. To
encourage good validator behavior, a user's stake is also used as a key. Users can lose a portion
of their stake for the currencies for example if they go offline or fail to validate.
Best PoS Coins
● Neo
● Tezos
● Dash
● QTUM
● CUTcoin
● Cosmos
● PIVX
● Lisk
PoW Vs PoS, What’s The Difference?
Today, there are hundreds of consensus algorithms, but the most highly-anticipated ones are
Proof of Stake (PoS) and Proof of Work (PoW). PoW is quite an older algorithm than PoS and
has been a primary way for transactions of many popular cryptocurrencies. On the other hand,
PoS was launched in 2011 and it has yet to see adoption in any of the big blockchains or
cryptocurrencies.
Just as mentioned above, we have seen miners in Proof of Work but in Proof of Stake, miners are
replaced with validators. There is almost no mining in Proof of Stake and also there’s no
competition to guess hashes and solve different puzzles. Instead of mining, users in PoS are
randomly chosen. In case, if they’re chosen, they have to propose or forge forward a block
through which the transaction can take place. If they build up a valid block then after the
successful transaction through their block they will receive a reward as a part of the transaction
fee.
The selection of users is random and users can be selected on many factors. To get eligible in the
selection, a user needs to lock up a stake. The lock-up stake is a predefined amount of the
blockchain’s native currency.
You must’ve heard that Proof of Stake (PoS) does have some benefits over Proof of Work
(PoW). One of the most notable benefits is carbon footprint. Since there’s no need for high-
powered mining farms in PoS because it only includes validators, the electricity consumption is
reduced. It is just a fraction of that consumed in Proof of Work.
The main difference between the two is the miner and validator. However, PoS is considered as a
much-secured algorithm as mining is the only consensus algorithm that is used by most of the
world while on the other hand, PoS needs to be properly tested in many situations.
Benefits Of PoS Over PoW
As we know, PoS does have some benefits even though it is not yet accepted as much as PoW.
As it is a later version and the second most used algorithm so it comes with several
improvements to the Proof of Work algorithm. Some of them are,
● Better energy efficiency as there’s no mining required to do transactions

● Reduced hardware requirements, no mining needed so you don't need elite hardware to
stand a chance of creating new blocks
● Proof of Stake is responsible for leading to more nodes in the network and stronger
support for shard chains, which is a key upgrade for scaling Ethereum.
There’s also a drawback of Proof of Stake which is that it is still in its infancy and developing
phase, and less battle-tested till now as compared to Proof of Work. That is why PoW is still a
preferred approach for transactions of various cryptocurrencies.
Many More Technologies To Come
As blockchain technology is changing day by day, we see the variation in how different
blockchain networks function. The most used processes for every public blockchain network
today are Proof of Work (PoW) or Proof of Stake (PoS) to provide consensus. Moreover, private
or ‘permissioned’ blockchains and Distributed Ledger Technologies (DLTs) can also be used in
different ways to get desired speed, security, and scalability according to the needs.

PoW Vs PoS

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PoW vs PoS

It is a system that is designed to prevent double-spends on transactions. Most of the major

Best PoW Coins

Best PoS Coins

PoW Vs PoS, What’s The Difference?

Benefits Of PoS Over PoW

● Better energy efficiency as there’s no mining required to do transactions

Many More Technologies To Come

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