Before talking about the proof of work and proof of stake we will talk about consensus algorithm. Consensus algorithm is a strategy that group of computer used to agree between each other that what is true.This algorithm is used in blockchain and in computer to obtain a important agreement on single data.

There are three types of consensus mechanism here we will discuss about POW and POS

Source

What is POW

When the Bitcoin was invented as the first cryptocurrency a system was developed to ensure the validity of transaction and to be verified without the need of third party. This was achieved by a system known as proof of work. When the transaction came for verification there is a need to be some mathematical puzzle to be solved as a result transaction is verified and it is recorded. Proof of work is very secure algorithm. It is used by the Bitcoin and it is impossible to hack by hackers. There is also a large number of miners who are working at the same time so there is also a huge competition among themselves to get the reward.
Mining new coins required a lot of computing power because of proof of work algoritium.This idea was presented in 1993 for the first time to combat spam email, and called as proof of work in 1997 but this technique was used highly in 2009 when Bitcoin was invented by Satoshi Nakamoto. He told that this mechanism can be used to attain a consensus between many nodes on a network. Satoshi also used this to secure Bitcoin blockchain. However proof of work algorithm work by having all nodes solving cryptographic puzzle and find its solution to get the reward.so this situation leads to build up more and more mining form by people.
According to digieconomic Bitcoin mining alone used 54 TW/h of electricity which will fulfill the need of almost 5 million house and even power of entire small country.Proof of work give more reward with better use of equipment.
To increase chance even further miner have come together that is called mining pools. They combined their hashing power and distribute the reward evenly among everyone in the pool

Advantages of POW

• In proof of work minors are rewarded with coins for solving mathematical problems.
• It is very secure system that is impossible to hack by hackers which prevents the fraud and also built the trust.
• Without any exchange registration user can get the token.
• It's worked on decentralisation system and used by many miners there is no need of third party here.
• There is a record of every transaction so minor cannot lie in this case.

Disadvantages of POW

• POW use huge amount of electricity, It consumed about 54 TMW/h only for Bitcoin mining.
• There are many people who are working at a same time but one of them get the reward while other do not so it is a wastage of time for all others who are working there.
• Transaction fee is also very high in POW.
• More energy is consumed in it and also more computational power is consumed.
• It takes almost 10 minutes for validation which is very slow process.
• This is not highly scalable process because it required very difficult mathematical operation.

What is POS

In 2011 Bitcoin forum user called quantum mechanics proposed a technique that the called as proof of stake. The reason behind is that there was a wastage of time during the mining process when people compete with each other. Proof of stake is based on the number of coins that a node has in its wallet. Those nodes are selected for forge block which have more number of coins and they participate in validation process. In this case not everyone can participate for validation process.
Proof of work use selection process in which one of the node is selected randomly to validate the next block. But in proof of stake it does not let people to mine block but instead mint or forge the block. These validators are chosen randomly. In order to become validator a certain amount of coins has to be deposited in the network as a stake by the node. It is a sort of security deposit. The size of the stake determine the chance of a validator to be chosen to forge the next block.
It is a linear correlation. Suppose I deposited $10 dollar and my friend deposit $100 so he has 10 time more chance To forge next block if validator approve fraudulent transaction they will lose a part of their stake

Advantages of POS

• Always consume less energy and also remove the barrier of using complex computing process.
• It does not required to solve difficult mathematical puzzles.
• There is no need of highly trained, qualified and skilled person.
• If a validator verify fraudulent transaction, his coin will be deducted from the wallet so it is safe for customer.
• It is fast process and form multiple transaction at the same time

Disadvantages of POS

• It has become a centralised system which always required middle authority
• People having large amount of coins will take the benefit for having more chance to forge the block. This system is not good for small investors.
• Although there is more energy and machinery used in Proof of work but it was a secure system instead of it proof of stake is not highly secure system.
• You have to put coins in wallet means that these are no more useful for you to trade.

Comparison

POW	POS
It uses massive amount of energy	it required less amount of energy.
Proof of work work is highly expensive	proof of stake is not so much expensive.
It is time consuming process it takes almost 10 minutes to block a mine.	it is fast process and immediately mint new block
Minor gets the reward if he knows how to do work	it gives the reward based on number of coins present in the wallet.
More secure then POS	less secure then POW
Mathematical puzzles need to be solved to get the reward	there is no need to solve difficult mathematical puzzle the reward is only based on the number of coins in your wallet higher the number of coins more will be chance of mint the block
It is used by Bitcoin, Bitcoin SV, Zeash etc	it is used by blockchain ,NXT coin, etc

which one is best in scaling capacity

As we discussed about POS and POW it is the need of hour to keep pace with the modern world. So we have to select the process which is more energy efficient and also save our resources. proof of work is slow process and takes almost 10 minut to mint new block. While on the other hand proof-of-stake takes almost less than 10 second to mint new block. There is only a single transaction can be done at a time in proof of work while in proof-of-stake multiple transaction can be done at a same time almost more than 15 transaction. Proof of work use more machinery and electricity while proof of stake use less energy and electricity. We are living in a world where we have to save our resources. Proof of stake was introduced to overcome the issues faced due to proof of work. Proof of stake is going to used in ethereum. So due to above discussion and advantages proof of stake system is good to be used in modern era

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