Different types of Consensus Mechanisms - Steemit Crypto Academy Season 5 - Homework Post for Task 6
What is the difference between PoW & PoS? Advantages & Disadvantages? Which one is better in scaling Capacity? Examples?
In block chain-based technologies, effective interconnection between the nodes and links in the chain that verify and transfer the information received is required, ensuring that the data handled is not tampered with in any way throughout the process, and that it maintains synchrony with the general ledger, which certifies and grants final security to the operations.
In terms of crypto, prisoners might be a decentralised system in which miners use their computers to solve any mathematical riddles with the primary goal of being used. It simply means that whoever is successful in inspiring the correct answer receives a cryptocurrency incentive.
In its most basic form, PoW involves a worker solving a challenge and proving his job to opposing mining competitors. They confirm whether or not the response is correct by working together. If this is the case, the employee who provided the primary correct answer gets rewarded when she is given a new task, and the competition begins all over again.
Many of the cryptocurrencies that have been deposited have been liquidated. If you don't have time to operate your laptop every hour of the day, or if you don't have the required stake to connect to the network, you can lend your coins to other computers to earn a portion of their share in Proof of Stake.
difference between PoW & PoS
POW
With the emergence of Bitcoin (BTC) in 2008, PROOF OF WORK became the first consensus algorithm. The miners, who compete with each other, are in charge of confirming the blocks produced by the network. They are dedicated to solving complex mathematical operations to confirm the blocks and thus achieve a reward, since the first to confirm a block receives a reward. This procedure is also followed when new cryptocurrencies are added to the network.
Convicts might be a decentralised system in which mining uses their technology to solve any logical puzzles with the primary purpose of using it. Simply said, whomever is successful in motivating the correct response will win a cryptocurrency reward.
In its most basic form, PoW entails a worker completing a challenge and demonstrating his abilities to opposing miners. They collaborate to confirm whether or not the response is correct.
POS
Proof-of-stake keeps a cryptocurrency (locked) on the ledger for the amount of time it takes to apply a cryptocurrency to a group's technique, rather than requiring a lot of processing power and resources for an activity approach.
Each time, the activity will be different. You can create a group action mechanism and a block if the minimum number of coins to be staked is the extra cryptocurrency at risk.
A proof-of-stake method's dynamic feature is intended to make it somewhat safe; in other words, if a laptop tries to circumvent the rules of many blockchains, its stakes will be lost.
A number of the cryptocurrencies that had been deposited have been revoked. You can lend your coins to other machines to earn a piece of their Proof of Stake share if you don't have time to operate your laptop every hour of the day, or if you don't have the needed stake to access the system.
Advantages & Disadvantages of pow
Advantages of pow
• As previously said, POW is decentralised and employs a lot of computer power; therefore, its security is better, and no single person can take control of the network without 51 percent of the mining machine power.
• The network will be independent of third-party intervention due to the decentralisation feature. As a result, the background of the transactions is transparent.
• Mathematical techniques are being developed to ensure the mobility of data prepared by block chain nodes, allowing validated blocks to profit from assets.
• It is necessary to have the hard ware required for crypto currency mining in order to be paid and granted access to produce a new block with the crypto money established.
disadvantages of pow
• Miners with more capital and investment time are rewarded in the PoW algorithm, implying that mining power will be consolidated in the long run.
• Power consumption is a significant disadvantage in proof of work, as they require increasing amounts of power to win the competition and receive a payment. This enormous power usage for solving calculations is unusable in other industries, disciplines, or fields.
• Finding a hash number is difficult and expensive, therefore the PoW process needs a miner to encode the block data and discover the solution with a lot of computational power.
• Its costs are quite high, and transaction processing is delayed. Mining also necessitates the use of expensive equipment.
Advantages & Disadvantages of pos
Advantages of pos
• Because it is more energy-efficient than Proof-of-Work, it does not require the use of expensive computers or a considerable amount of electricity (PoW).
• It takes less computing power and allows more people to participate in the consensus process.
• It is not need to expand computational resources because it is energy efficient.
• Because it is more energy-efficient than Proof-of-Work, it does not require the use of expensive computers or a considerable amount of electricity (PoW).
Disadvantages of pos
• Understanding a blockchain and owning cryptocurrencies has technical and technological challenges that can deter users from using the network.
• Its validator selection is more difficult, and it should be safeguarded against delays and attacks.
• Small holders and beginners would not be able to swiftly raise their assets because incentives are directly proportional to the amount of assets owned and the time spent in the process.
• Those with a significant number of cryptocurrencies will have the most successful validations, resulting in hoarding in the hands of those with more wealth and resources, as well as centralization, which entails storing the units of value in the hands of a few holders.
Which one is better in scaling Capacity? Examples?
The capacity test is better for scaling the capacity because it allows for more blocks to be validated than bitcoin, which is validated every 10 minutes by miners who consume a lot of energy and then convert it into heat that is released and heats the environment. The PoS test, on the other hand, creates as transactions are faster, more blocks are created in a short time, and thus the proof of participation currently leads the ways to scales the capacity of the eco-system.
Taking this into account, the PoS consensus provides an improvement in transaction processing times, because PoWs require a long calculation time (to analyse and recreate an interlaced cryptographic reading chain), whereas PoS processes (which only need to confirm the currency's validity ready for node validation), which allow traffic and block verification without major analytical compilation efforts, without delaying operations.
example :-
• Bitcoin: As the first to use technologies based on "Hash Cash," it was able to establish a foundation of trust in its cryptographic sustainability, as well as a security base in its resources, resulting in the creation of new BTC stocks. Each transaction takes 10 minutes to complete with full confirmation.
• tron: In the Tron ecosystem delegates are also known Super Representatives (SRs). Voting is done by staking tron coins which can be up to 5 SRs per election. Every 24 hours, elections are held and only the top 27 SR candidate can validate transactions. Super representatives should have at least 64 cores of CPU, 64G of RAM, 50M of bandwidth and 20T of disk space.
• Cardano (ADA) is an open source decentralised blockchain that provides its users complete control and contributes to the creation of a transparent and fair society. It has a transaction processing rate of up to 257 transactions per second.
• Ripple (XRP) is a decentralised open source blockchain that is less expensive, faster, and scalable. Its primary purpose is to facilitate payment. XRP has a transaction rate of 1500 transactions per second.
• Celo: This is a blockchain that uses phone numbers as public keys to enhance the adoption of cryptocurrencies on mobile devices. It can process up to 1000 transactions per second and has a 5 second ledger closing time.