Hello Everyone.

It's great to participate in this Task 4 course. The lecture by Professor @sapwood is very clear and understandable. I comprehend the topic and here I share my knowledge on question one of the lecture assignment.

QUESTION 1

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

Before I go on to answer the question "What is the difference between PoW & PoS?" I think it will be neccessary to explain the meaning of PoW & PoS.

For this reason, Let me explain what PoW & PoS are one after another.

What is PoW?

PoW is the acronym of Proof of work which refers to a decentralized consensus mechanism that requires a lot of computing effort to solve complex mathematical puzzle in order to prevent malicious actors from tampering with the blockchain network.

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PoW was created to prevent cyber-attacks on cryptocurrency blockchain network . This concept was adapted in 2004 by Hal Finney through the idea of "reusable proof of work" using the SHA-256 hashing algorithm to securing digital money.

The first cryptocurrency blockchain network company that adopted PoW was Bitcoin. Later after the idea was introduced in 2009 other blockchain network companies adopted it and started using it for cryptocurrency mining, validating of transactions and mining new tokens.

Proof of work protocol safely processes cryptocurrency transactions without any need for a third party.

What is PoS?

PoS is an acronym for Proof of Stake which states that cryptocurrency miners can validate block transactions based on how many coins they hold. This means that the more amount of coins cryptocurrency miners have determine the amount of mining power they possess.
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Proof of Stake (PoS) is the consensus algorithm in Blockchain technology that is used to confirm transactions and add new blocks to blockchain. It was introduced as an alternative to Proof of Work (POW). In proof of stake (PoS), miners are limited to validate block transactions based on the percentage of the coins they own. For example, a miner who has 10% of coins is limited to mine only 10% blocks. This concept was first adopted by Peercoin. Nxt, Blackcoin, and ShadowCoin.

Difference between (PoW) and PoS:

1. In Proof of Work (PoW), to mine a block is determined by feasible amount of computing effort to solving the complex mathematical puzzle while in Proof of Stake validating a new block is determined by the amount of coins a miner possesses.

2. In Proof of Work (PoW), the first miner to solve cryptographic puzzle of each block receives a reward, while Proof of Stake (PoS) miners earn from fees of all transactions written in the block.

3. In Proof of Work (PoW), miners compete to solve difficult puzzles using their computer process power, while in Proof of Stake (PoS) miners are chosen by an algorithm based on user stake.

4. Proof of Work (PoW) at scale requires huge amounts of energy and it is more expensive to run, while Proof of Stake (PoS) uses less electricity energy and it is less costly.

5. Proof of Work (PoW) requires initial investment capital to buy hardware, while Proof of Stake (PoS) requires investment on stake or coin and to build reputation.

6. Proof of Work (PoW) has limited number of transactions it can perform at the same time, while Proof of Stake (PoS) can perform lots of transactions at the same time.
   

Advantages of Proof -of- Work:

• Proof-of-work is a decentralized network system. It has high safety and security
• Any miner who solves complex mathematical problems is rewarded
• Anyone can get involved in the mining process and be a partner in the Proof of Work
• Miners who have higher capital and investment time receives higher rewards

Disadvantages of Proof -of-Work:

• It requires expensive computing machines
• It requires huge amount of electric energy and it is very expensive
• It takes a lot of time to verify transactions
• It processes few transactions at a time
• It generates more electronic waste and causes environmental pollution

Advantages of Proof- of -Stake

• It does not require expensive computing machines
• It does not require huge amount of electric energy to run
• It is less expensive
• It takes less time to verify transactions
• It can process higher number of transactions at the same time

Disadvantages of Proof of Stake:

• It requires higher investment on stake
• Validators receive only network fees and do not receive block reward
• Top stakeholders who have 51% of the cryptocurrency, have access to make technical changes on the network
• The security of PoS is not highly guaranteed

Which one is better in scaling Capacity? Examples?

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Based on my understanding of the two consensus mechanisms, PoS is better in scaling capacity. The reason is because PoS mechanism offers several solutions to PoW scalability problems such as high energy consumption, environmental pollution, low transaction speed etc. PoS validates transactions within a short time period while PoW takes a long time to verify transactions.

EXAMPLES:

One good example is when Ethereum blockchain changed from PoW to PoS, their transaction validation speed became faster. It now takes about 10 to 16 seconds for miners to confirm transactions. When they were using PoW it takes them nothing less than 10 minutes to confirm transactions.

Some other blockchain networks who have switched over to PoS protocol include:
Dash (DASH), PundiX (NPXS), Ark (ARK), Qtum (QTUM) and Tezos (XTZ). There are so many others, these are few among many of them.

CONCLUSION

I have been able to make my points clear according to my understanding. I have explained the meaning of PoW & PoS and stated the difference between the two consensus mechanisms. I have equally listed their advantages and disadvantages and finally concluded that PoS protocol is a better consensus mechanism in terms of scaling Capacity with some examples of blochchain companies currently using PoS protocol.

I remain ever grateful to God who made it possible for me to discover and be a partaker of Steemit CryptoAcademy lectures.

Thank you all.