Crypto Academy Season 3 Beginners' course – Homework for Task 4: Different types of Consensus Mechanisms for Professor @sapwood by @dilchamo

Homework Task

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

OR

(2) What is the difference between PoS & DPoS? Advantages & Disadvantages? Name a few Blockchain projects which use the DPoS consensus mechanism and indicate the scaling capacity?

OR

(3) Name a few Blockchain projects which use dBFT in combination with other consensus mechanisms? Indicate the scaling capacity? Explain dBFT along with the pros and cons?

I have selected question number 1 to answer for the homework Task 4.

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

What is the difference between PoW & PoS?

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PoW and PoS are two different consensus mechanisms which run under approving and verifying computer technology.
Proof of Work is a consensus mechanism which is based on the computer technology. It is also a part of the block chain which miners work on transactions and record them in ledgers too. In PoW the selection of miners is done randomly and if the energy is insufficient it limits scaling capacity. PoW is more decentralized.

There is an unconfirmed pool where all transactions go. And the miners will verify the transactions. Invalid transactions are pulled out from the network and valid transactions are further processed.
But proof of stake (PoS) is different. It is an approach where the validator is chosen from the amount of Stake. It is good to have a higher stake. Unlike in PoW, PoS is a centralized system. it attracts more stake holders. The security is lower than PoW.

In PoS miners can mine and validate according to the amount of coins they have. If they have more coins then they have more power. But with PoW miners consume huge energy to generate and sometimes will have to sell their coins to gain energy. So PoS is low in risky level when compared to PoW.

Both are consensus algorithms which is for transactions which goes through a mining process.

Advantages & Disadvantages?

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PoW

The speed is calculated based on the block producing time of the network.
The miners are selected in a random way.
The PoW mechanism is decentralized.
PoW has a limited scaling capacity.
The energy is not sufficient.
PoW is ess secure.

PoS

PoS doesn’t need a mining rig.
PoS has efficient energy.
PoS helps the price variation of tokens.
PoS attracts stakeholders.
PoS has a centralized system.
PoS has a secure system.

Which one is better in scaling Capacity? Examples?

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If a block chain network is high in transactions and verifications then it becomes scalable.

PoS is better in scaling capacity because it has efficient energy as well as stake holders can earn better rewards. It runs on a centralized system with more energy. PoS has better scalling solutions too. PoS consumes less energy and computation technology. PoS conduct higher transactions.

PoS solves many disadvantages which were highlighted in PoW. In PoS there are validators without any hard computing enegies. Validators can stake the tokens to be eligible.PoS maintains secure network. It is easy for validators to engage in PoS as the operational cost is low. PoS consumes less electricity.

Coins like DASH, NEO, TEZOS and Etherum has shifted from PoW to PoS because of its features.
NEO is a decentralized mechanism of approved nodes. TEZOZ is also a mechanism which has gained a popularity in recent years. TEZOS has also operates with digital tokens. TEZOS also creates incentives to the participants.

This is the end of my homework task. Thank you professor @sapwood for giving us knowledge. Thank you for reading my post.