Crypto Academy Season 4 Beginners' course - Task 6: Different types of Consensus Mechanisms By @hajiataiba

INTRODUCTION
Hello steemians, I am very happy to write my homework post for this week and also using this opportunity to say a very big thank you to prof @sapwood for this wonderful lecture this week.

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

First of all, before I started to elaborate on the different between PoW & PoS, I will like to explain or talk about them small before I go to their difference.

PROOF OF WORK(PoW)

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poW in full means ( Proof of Work) and this is a consensus algorithm where by blockchain network uses in confirming transactions and also create new blocks in blockchain.
Moreover, PoW is not a new thing, is been in the system or existence for long. In 2009, **Satoshi Nakatomo was the person who adopt the idea before the introduction of the first Bitcoin. And since as at that time, People are still using the idea of PoW.
It kept long in the system and became the most used consensus algorithm in the crypto world.
Also, PoW is a Decentralized mechanism which is simply means that, it need a lot of concentration for a user to use it and solve a problem.

Minors in PoW algorithm simply means that, a group of people who is to compute with each other in a network transaction using a produce called Mining.
And when this happens, a miner is awarded when he or she is able to create a successfully valid block.
Bitcoin is the most popular PoW application.
In the process of producing PoW, there are several trials and a lot of errors before one can be able to successfully valid block.
The principal behind the use of PoW, is of mathematical puzzle which is used to solve an easy work.

Some example of Cryptocurrencies are; Litecoin, Bitcoin, Bitcoin Cash.
This is the reason behind it taking some couple of minute before it’s transaction can be successfully.
It takes like 10-15 minutes for a Bitcoin transaction to be successfully done.
And it happened that why because, when a transaction is initiated, it has to goes through a lot of verification before it can be confirmed. And thorough these processes, miners are ask to be solving cryptography puzzles just to check whether or not the transaction is valid or not.

PROOF OF STAKE(PoS)

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PoS in full means ( PROOF OF STAKE) and this is not like PoW. This is in a sense that, it does not have validators, and also, it does not have miners. This is also a consensus mechanism which is used my blockchain network. PoS is also an acronym which allows or make users to have a successfully valid Cryptocurrency transaction staked.
Moreover, PoS uses a centralised basis which makes it Audible to attack.
Proof of stake can also be of help to stakeholders, by attracting them to invest and earn more.
The first cryptocurrency to used PoS was lunch in the year 2012 and the name of that cryptocurrency was Peercoin.
Below are some coins that changing from PoW to PoS but they are not officially announced it yet.
Dash, Etherum etc.

DIFFERENCE BETWEEN PROOF OF WORK AND PROOF OF STAKE

Proof of work (PoW)	proof of stake (PoS)
PoW do not allowed miners to mine or validate block transaction.	PoS allowed miners to mine or validate block transaction.
More energy is used in PoW when a miner wants to sell his or her coin	Less energy is used in PoS when a miner wants to sell his or her coin
In PoW, miners does not get the power in regards to the percentage of coin owned by them.	PoS gives miners the power in regards to the percentage of coin owned by them.
There is high risks involved in PoW	there is less risks in PoS
PoW runs on a Decentralized system	PoS runs on a centralised system

Advantages & Disadvantages?

Advantages of PoW

• it is very difficult to for hackers to proof of Work(PoW) hack it because it runs on a Decentralized system.

• PoW also award its miners after he or she make a successful validation.

• Proof of Work ( PoW) also makes blockchain network highly secured and very costly to attack by miners.

• Consensus is done so fast

• PoW makes blockchain network highly secured and also very nice to attack by miners.

Disadvantages of PoW

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• The time that is needed in the transaction process to be successfully done is very slow.
• POW needs a lot of energy and high-class machines.
• It also west a lot of money in getting the machines and also maintaining them.
• Proof of Work consumed high energy in a sense that, it needs a lot money and manpower.
• The Proof of Work results are draw out from the dependence on mining activities. even as I’m talking now, produced digital currencies continue to take part in the crypto market.

Advantages of PoS

• Due to its decentralized in nature, miners are chosen randomly.
• PoS do not need high energy because it does not use high utility hardware
• Transactions is very fast when it comes to PoS
• Also, PoS do not need any high machines to run or operate on.
• It also requires less time and attention

Disadvantages of PoS

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• there is High risk of hackers to hack the system
• There is favouritism in the system in a sense that, people with higher stakes get a favoured and it is difficult for people who has low stakes.
• It is not possible to be selling and staking coin at the same time
• Liquidity in PoS is limited.
• PoS is centralized Which makes it less secure.

Which one is better in scaling Capacity?

Scaling is simply means; the factor which is given to a consensus mechanism to help it increase the number of transactions it can verified per minute.
With the above mention points of PoW and PoS, I can say that, PoS is better in scaling capacity.
I’m saying this because, per by my research, PoS is very fast when it comes to transactions then PoW and PoS is also flexible.
Also, PoS uses less electricity consumption, it will be more accessible and even more open to easy adoption. Moreover, features can be added to the technologies behind a token running or operating on a Proof of stake mechanism as the developers need not worry about power consumption.
In conclusion, PoS is better in scaling capacity.

Below are some examples of cryptocurrencies that’s uses PoS ;

• Etherum

• BNB

Now I will like to about Ethereum;

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When we look at crypto world, Ethereum is one of the most popular cryptos that uses proof of stake.
As I’m even takin now, a new version of Ethereum 2.0 has been lunched.

Now I will also like to talk about BNB;

BNB

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This is another coin that uses proof of stake consensus mechanism. Look at BNB, there are a lot of ways one can follow to stake BNB with her help of proof of stake.

CONCLUSION

Proof of stake and proof of work are both great mechanisms in the crypto world. They improve the security and scalability of blockchains and aid in the making of transactions. They also make sure that the various verification of transactions or blocks are been done.

I will like to use this opportunity to thank the professor @sapwood for his wonderful lecture this week. I really learned a lot from his lesson and I hope my homework task will be reviewed thank you!!!!