Homework | Crypto Academy Season 3 Beginners' course - Task 4: Different types of Consensus Mechanisms

Hello everyone. This is my third post in steem crypto academy. Thanks to professor sapwood for this lecture in which i learned about the consensus algorithms.

Source

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

Proof of work is the first consensus algorithm which used in blockchain technology. Its decentralized system where anyone can participate. There is no central party or middle man to handle the whole system. When a transaction come for validation, computational power is being used for solving some mathematical/transactional puzzles. When a transaction is validated, it is recorded in the public ledgers. This is very secure consensus algorithm. This consensus algorithm is being used in bitcoin as it is almost impossible to hack. Here when the minors mine their coins, they require great energy.

All the minors have to work very tightly in order to get the coin in proof of work. This algorithm is is very beneficial for minors as it give them energy and power to mine their owned coin efficiently. High electricity is used in PoW. The minor who solve the puzzle first, get the reward.

Prons of PoW

• Very secure

• Decentralized so there is no need any middle man.

• The minors are rewarded with coins for solving the mathematical problems which are needed to solve for validation of transaction.

Cons of PoW

• Consume very high electricity power

• Much energy is consumed when the number of participants increase.

• Used much computational power

• It is comparatively slow as 10 minutes are require for validation of transaction.

• Costly as more powerful machinery are being used for getting the fast result

• Need to have a great experience in order to participate in staking.

• Require heavy machineries to get high results.

This consensus algorithm was introduced by Scott Nadal and Sunny King. In Proof of Stake, not anyone can participate in transaction validation process. Here some nodes are selected who participate in transaction validation process on the basis of the coins they have in their wallet. The more coins you have, the more the chances that yo will be selected as validator.

The trading power is calculated by their coins. Here no need to solve the hard mathematical puzzles. So no high energy is consumed here. This is fast as compare to the PoW.

Prons of PoS

• Consume less energy

• Mining is not perform here. The Validators are selected for validation of transaction on the base of their stakes.

• Fast as it can perform multiple transaction at a time.

• No mathematical problems are solved so no power consumption.

• No need to have a great experience in order to participate in staking.

• Do not require heavy machineries for efficient results.

Cons of PoS

• Centralized. There is always required a middle man.

• Only the person with higher coin can participate in validation of transaction.

• Comparatively Less secure

Proof of Work	Proof of Stake
Use higher energy	Energy efficient as it consume low energy
Slow as almost 10 minutes are required to complete the transaction confirmation process	Much fast less than two minutes are required for confirmation of transaction.
Mining is done in PoW.	Mining is not required.
It was firstly used in bitcoin blockchain	Peercoin is the first where the PoS was used frirstly.
More secure as compare to PoS	Less secure as compare to PoW
Here the minors participate in transaction validation process	The validators are selected on the base of their holded coins.

The Mathematical problems are solved here The Mathematical problems are solved here to confirm a transaction.	The validators need to hold the higher coins in order to participate in confirmation of transaction
It is costly in term of electricity consumption	It is less costly in term of electricity consumption
The minor who solve the mathematical problem at first is rewarded	The validator is rewarded with the network fee

Question 2: Which one is better in scaling Capacity? Examples?

The PoS is more energy efficient and fast. It solve problems which were in PoW. This is fast as compare to PoW and can performmore than fifteen transactions at once. Here not highly skilled person only can participate in staking process.

The networks where the PoS is being used take less than 10 second for transaction confirmation. So PoS is better in scaling as compare to PoW. It was introduced to cover the troubles in PoW. It take small time duration to complete the transaction validation process. It is being used in Peercoin, Ethereum, Dash and many other coins.

Thanks to
@reminiscence01 
@awesononso