Continuation on Differences between Proof of Work (PoW) and Proof of Stake (PoS).
Differences between PoW and PoS
Although consensus mechanisms are key ingredients in determining the efficiency of certain blockchain operations, there are some differences between the two consensus mechanisms we have been expounding on in this article.
Blockchain engineers must employ one of these technologies to facilitate the effective running of blockchain applications and infrastructures. Proof of Work and Proof of Stake is available for open use depending on criteria based upon their application’s utility, such as motivation, scalability, inventive policies, etc.
Here are some key differences between proof of stake and proof of work.
Model of Verification
The first disparity between these two consensus models is the verification mechanism. Just as the term “Proof of Stake” sounds, it implies that validators have to stake their coins to enable them to successfully participate in the verification process.
Mining, on the other hand, consumes high computational power, which isn’t environmentally sustainable. That is how Proof of Work operates. Validators participate in the block verification process by solving multiplex mathematical problems.
Reward Systems
If you’re a user of a system that is built on the PoW infrastructure, you must remit a transaction fee to the miners to permit the verification of your transactions. Interestingly, miners also get other incentives, such as the remittance of new native tokens of virgin projects.
However, validators in the PoS system enjoy only network or transaction fees. They rarely get rewarded with tokens. Here, users pay these little tokens to the validators to validate their blocks.
Security and Vulnerabilities.
How secure are these consensus frameworks? In PoW, a user or miner who accesses more than 50% of the hash mining rate of a blockchain can manipulate the system how he wishes. PoW is susceptible to 51% of attacks.
Furthermore, when a malicious user can successfully exploit the mining capabilities of a blockchain, he can disrupt the flow of transactions by messing up the chronological order of blocks and delaying the confirmation of requests as well.
In Proof of Stake, the vulnerability is obvious as the staking process is the only factor that allows for the functionality of the consensus mechanism. Thus, zero staking of coins in a network equals zero transaction validations, which ultimately leads to the collapse of the system.
Computational Requirements
As stated earlier, PoW requires a lot of computational power to function properly. Amongst other issues with this, its effect on the wellness of the environment is devastating.
In addition, the consensus mechanism requires high computing capacity to solve mathematical problems, which, of course, is extremely costly. Do you know how much supercomputers cost? Maybe you should ask around.
Meanwhile, in PoS, because users have to stake their coins, there’s no exquisite demand for high computational power. Rather, users who stake more of their coins have a better opportunity to become eligible. It’s quite environmentally sustainable, right?
Extensibility
In other words, how scalable are these two mechanisms? The PoW is not perceived to be extensible because the system paces down when there are several users on the network.
Heard of sharding? It’s a technique that is potentially considered to optimize PoW. Sharding works by dividing a block into segments to allow other miners to validate the same block. Interestingly, this system allows for less time and energy consumption.
PoW vs PoS which is better?
PoS is simply scalable in comparison to PoW. Regardless of how many users are on a network using PoS, users stake their funds to be chosen by the algorithm to become validators.
The cheat code is this, ‘stake more funds to have a better chance of being chosen to validate a block.’
Here’s the crux of the problem, a user who is stupendously in a high concentration of funds, may dominate other users who don’t have surplus funds to inject into the PoS system, so that they can be validators.
Likewise, PoW can’t properly function without extensive energy consumption which of course, isn’t environmentally friendly.
Will these difficulties in operation affect the rate of global cryptocurrency adoption? Kindly engage in the comment section.
Conclusion
Having carefully discussed the disparities between the 2 different consensus mechanisms, we can say while Proof of Work provides a higher security level for the safety of transactions, its cost-ineffectiveness poses a foremost problem that distinguishes it from Proof of Stake which is less- energy consuming and has cheaper fees for transactions.
In conclusion, we can see that PoW is a more complex approach to solving math problems on the blockchain system, whereas PoS tries to solve this complexity while arriving at the same answers in blockchain technology. In other words, PoW and PoS are similar but take a different approach.
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