Different Types of Consensus Mechanisms - Steemit Crypto Academy Season 04 - Homework Post for Task 06
➡️Homework Task -06-⬅️
⚜️What is the difference between PoW & PoS? Advantages & Disadvantages? Which one is better in scaling capacity? Examples?
First I will give a brief introduction about PoW & PoS.
✳️PoW (Proof-of-Work)✳️
PoW is a consensus mechanism. It is a system with algorithms used to manage transactions in the blockchain network. That is, miners are tasked with solving the cryptocurrency problem to verify and validate a transaction. This compromise mechanism requires a large amount of computer power to solve complex mathematical puzzles. This is designed to facilitate electronic transactions without a third party.
✳️PoS (Proof-of-Stake)✳️
PoS is a transaction validation system. In terms of market capitalization in blockchain networks, this has been introduced as an alternative to PoW. This system is maintained by powered blockchain validators. They receive a transaction fee for the amount of coins stored. If a node intends to participate in the blockchain process, it simply needs to take the native code. The PoS system is activated when miners block their coins to check transaction blocks.
♨️What is the difference between Pow and PoS
1️⃣PoW system's miners handle or control the data, while validators at PoS maintain the system.
2️⃣PoW ensures good decentralization and PoS has a lower decentralization and tends to be more centralized.
3️⃣At PoW the benefits depend on the power of the mining machinery and the benefits of PoS depend on the size of the coin.
4️⃣Before solving the puzzle on the PoW network, the miner is rewarded for their work, and since PoS is a block, the block creator charges a transaction fee for each transaction.
5️⃣Hackers in PoW must have more than 51% of the network's powerful computer to add a block, and hackers in PoS must own 51% of the cryptocurrency available on the network to add a block.
♨️Advantages & Disadvantages?
Advantages of PoW
🔘This depends on the computational capabilities.
🔘Increased security as it operates as a decentralized system.
🔘Blockchain is a very complex process that makes it difficult for hackers to invade the network.
Disadvantages of PoW
🔺 The high cost of maintaining the system as well as the large number of people required.
🔺High power consumption due to continuous operation of mining machinery.
🔺Software used in mining is rapidly becoming obsolete.
🔺 Machines consume as much energy as is harmful to the environment.
Advantages of PoS
🔘Energy efficient as no mining machine required.
🔘Being able to attract stakeholders to earn better prizes.
🔘No need to spend on electricity and no need to buy hardware.
Disadvantages of PoS
🔺Decreased security.
🔺Requiring a high investment to get PoS prize giving contribution.
🔺No rewards for validators. They only get network fees.
♨️Which one is better in scaling capacity?
When scaling capacity, the scaling capacity of PoS is better. Pow is a compromise mechanism that limits the scaling capacity. In addition, the computer power used by the miners requires a lot of power. Therefore, PoS is designed to take advantage of the shortcomings of PoW. POS was introduced to meet the demand for higher output as more volume was required for later blockchain.
♨️Examples?
Examples of PoW include Etherum, Bitcoin, Litcoin. These are currently the most popular blockchain for PoW.
🔴Bitcoin
Bitcoin is arguably the first and currently the largest rated blockchain in Proof-of-Work.In some cases, other mechanisms may be considered superior, but their use may be disadvantageous due to the fact that they have not been in active use for a long time to prove conclusively. In such compromise mechanisms, miners compete to collect blocks, and each miner experiences rewards for their computational endeavors.
Examples of PoS such as Cardano, Polkadot, Solana are currently popular blockchains. I will give a short introduction about Solana here.
🔴Solana
Solana is an open source platform for the blockchain platform. Its internal cryptocurrency is called SOL, and it is one of the most active blockchain worldwide. It also does things like send unconfirmed transactions move forward to the validators.
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