Crypto Academy season 3 Beginner's Course: Homework post for Task 4 - Proof of work and proof of stake
It's a great pleasure to be a participant in this course. Welcome once again to another wonderful episode in the crypto Academy community. Before I present my homework post, I would like to acknowledge the professors and the crypto Academy community for making such an educative lecture possible.
Without wasting enough time I would present my homework post systematically based on the question.
What is the difference between POW and POS ? Advantages and Disadvantages? Which one is better in scaling capacity? Examples?
Brief definition on PoW and PoS
Proof of work and proof of stake are generally consensus mechanisms that synchronize nodes, agree and confirm legitimate transactions in the blockchain.
PoW is a consensus algorithm where blocks agree on each other to complete transactions on n the blockchain. This brings about how to find solutions to difficult cryptographic problems to be sure whether if valid transaction was made before confirmation is made. The transactions are confirmed and initiated, i.e; Different nodes that are being connected to each other systematically try to give solutions to the problems independently and differently to validate transactions. This kind of consensus mechanism is used by Bitcoin, this make transactions within that chain to last for some time before confirmation.
While the PoS on the other hand is consensus mechanism that shows if one can validate or mine Block transactions according to their number of coins they have. This simply mean, the higher the number of coin one own, the more the mining power of the person. This is mainly developed alternatively to the PoW. The PoS is an improvement on PoW which was developed by Scott Nadal and Sunny King due to the high cost of the PoW mechanism. The project was adopted by Bitcoin blockchain.
DIFFERENCES BETWEEN POW AND POS
|Proof of Work||Proof of Stake|
|1. Depends on how much work is done by miner||Depends on how many coins one hold|
|2. High energy consumption||Less energy consumption|
|3. Generated transaction time is 10 minutes||Generated transaction time is 15 seconds|
|4. Satoshi Nakamoto developer||Scott Nadal and Sunny King are developers|
|5. It's expensive||less expensive|
|6. Centralized mining community||Decentralized mining community|
Advantages and Disadvantages of PoW
It is not easy to give solutions to cryptographic problems, anyone to help solve a problem will be rewarded based on the coin he/she had transacted on, either Bitcoin. This consensus mechanism has become one of the most valuable among miners.
PoW give restrictions to certain considerable actions to participants.
High security protection from Ddos-attacks and the inhibitant of low fraction of some Cryptocurrencies that are being own by other miners.
The PoW uses very strong computers that normally consume much electricity, this increase cost of it use and makes it expensive.
The PoW is very slow, it takes longer period to confirm transactions as compared to PoS, this makes it process few transactions in longer period.
It has a centralized system of validating transaction.
Advantages and Disadvantages of PoS
It uses very short time in confirmation or validating transactions.
It uses very less energy from electricity, this makes it less expensive to use.
More transactions can be made within a short period as compared to PoW.
It has a decentralized system of validating transactions.
Higher rank stakeholders can make decisions on their own without considering other participants.
Has no well encrypted security. This means, the security system is very low as compared to that of PoW.
The better consensus mechanism as regards to Scalability
From the lesson, PoS has a better consensus mechanism as regards to Scalability compared to that of PoW. Because, PoS takes very short period to confirm or validate transactions being made. For example, when codes in PoW are being changed by Eutherum blockchain, the transaction takes minimum time of about 15 seconds for confirmation to be made in shifting to PoS process. PoW normally takes much time to do such confirmations, not less than 10 minutes. It sometimes takes more than that to process the transaction which makes PoS better.
Thanks for your attention.