Crypto Academy Season 3 Beginners' course - Homework Post for Task 4: [ Different types of Consensus Mechanisms]

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Homework Task Question 1

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

Answer
Proof of Work (PoW) can be used to verify both current and historical transactions. As a result, mining is the process of attempting to solve mathematical puzzles in exchange for remuneration. It is a method for verifying transactions and creating new blocks on the blockchain. In order to construct this new block, miners compete with Proof of Work to solve a complex mathematical challenge, which implies that they will be ready to collect certain fresh Bitcoins as a reward.

What is prove of Stake (PoS)
As opposed to traditional Proof-of-Work, where miners use their computer power to solve cryptographic puzzles in order to validate transactions
When it comes to Proof of State, who validates it is determined by how many coins you own.

The table below show the different between POW and POS

Proof of Work (POW)	Proof of Stake (POS)
A block's chance to be mined is determined by a miner's computing power.	What a person's stake in a new block is determines the possibility of it being validated (how many coins they possess).
For answering the cryptographic riddle, the block's first miner is awarded.	Instead of a block reward, the validator receives a network fee in exchange for validating the block.
Specialized equipment is used to maximize processing power.	Only a standard device with internet connection is needed
A miner will have to Invest in hardware.	In order to establish reputation, you must invest in the coin through stake
In try to generate new block to the chain, miners must contend by solving complex riddles using their computer processing capacity.	No rivalry exists because the block maker is decided through an algorithm which is based on stake.

Advantages of proof of work

• It is necessary for the miners to show that they have accomplished some task while creating block.

• Task is so tough that PoW reduces the danger of threat by 51% since it is so tough.

• There will be no single bitcoin mining powerhouse based on Hashcash PoW method.

• Each solution is easy for the public to validate. As a result, it's easy to confirm the authenticity of every transaction.

Disadvantages of Proof of Work

• Expensive equipment used in mining It's only available to the wealthy.

-Proof-of-Work blockchains only provide enough security if there is a large network of miners fighting for block rewards. An attacker who has control of more than half of the network's processing power can still launch an attack.

Advantages of Proof of Stake (POS)

• To recompense them for their work, the validator is paid in network fees instead than a block reward.
• You chance of validating a block depends on the level of coin you have stake.
• Monopolistic and Energy Consumption are addressed.

Disadvantage of Proof of Stake
One major disadvantage of proof of Stake is the fact that it gives room for Monopoly, a rich man may dominate the process by staking large amount of coin, and in return be the only one to validate majority of block .

Which is better in Scaling Capacity?
A lot of solutions to Bitcoin's scaling problems can be found in PoS. It is possible to solve the problems of transaction speed and energy usage with a system that seeks consensus before blocks are built Hundreds of transactions per second can be processed with a millisecond delay increase. It appears that Proof of Stake is more complicated than PoW because it does not disclose resources as easily as PoW does with its energy requirements. However, if you study the systems and understand them, you'll see that PoW is not scalable, but PoS is.