Crypto Academy Season 3 Beginners' course - Task 4 || Posted by @hydra1||REPOST

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

What is the difference between PoW & PoS?

Introduction

In the world of cryptocurrency, one can not do away with these consensus mechanism as it is one of the core fundamentals of the blockchain technologies. I would like to give a brief overview of the PoW & PoS consensus mechanism.
Proof-of-Work (PoW) is a consensus mechanism used by blockchain network miners to demonstrate their commitment to the network's development by verifying and completing blocks by solving difficult mathematical puzzles with their computing power.By so doing, the network is free from the eyes of hackers and can not be hacked or breached. This is the current consensus technique employed by Satoshi Nakamoto for their Bitcoin project.
Whereas Proof-of-Stake (PoS) was developed to solve the inefficiency of the PoW Instead of solving mathematical challenges with processing power, consensus is achieved by staking the coins people currently have in the network. Stakeholders engage in the validation of a network on the PoS. Examples include STEEM, TEZOS and many more.

What is the difference between PoW & PoS?

Proof-of-Work (PoS)	Proof-of-Stake (PoS)
It is highly costly due to its high electricity consumption	it is less costly because it does not use much electricity in its mining operation
validation of a transaction is based on the first person who solves the puzzle	validation of a transaction is done randomly based on their stake
Hardware are required in the mining process	one needs to buy the coin and build the reputation on the ecosystem
It requires time to confirm transactions.	It does not require much time to confirm transactions
It is not Scalable	It is highly Scalable

Advantages and Disadvantages

Advantages Of Proof-of-Work

• It is more secure, making it difficult to breach.
• It is a decentralized system due to the randomness of the validation process.
• Miners are given equal opportunities to compete to solve mathematical computation and thereby making it Fair

Disadvantages of Proof-of-Work

• It is highly costly due to its hardware requirements.
  The mining process of PoW involves the use of special designated powerful hardware which is very costly to acquire

• It consumes a large amount of electricity.
  The computing power needed in the mining process utilizes a greater amount of electricity.

• The validation process is slow.
  Due to the nature of the puzzles miners have to solve and the computing power needed, PoW is less scalable in terms of the validation of transactions. The more successful a coin becomes, the more complex the mining process becomes.

Advantages of Proof-of-Stake

• Because this mechanism does not require much energy in its operation, it consumes less electricity as compared to the PoW mechanism.

• Due to its scalability, it is able to process more transactions in due time.

• It does not necessitate a great deal of knowledge and experience.
  The most basic requirement in the staking process is possession of the coin; if you have the coin to stake, the process ahead can be followed even by a novice at staking.

Disadvantages of Proof of Stake

1. The majority of proof-of-stake attempts fail to achieve consensus. People staking their coins can rule over the two forks of the blockchain, and can even mine effectively and subtly. In PoW, this is outlandish, as you are from a genuine perspective of utilizing energy by mining the different sides of a fork.

2. Proof of Stake: The best way to get coins is from someone who already has them.This can lead to circulation problems.

Between PoS and PoW, which one has more scalability capacity?

The scalability of a blockchain network is primarily determined by the consensus mechanism used, which is why I must explain the complexity of the two consensus mechanisms.The point below explains why the Proof of Stake (PoS) consensus mechanism has a higher scalability capacity than the Proof of Work (PoW).
Rewards rely upon the total stake in the POS.
So, while big stakers legitimately gain more rewards, Small shareholders can still be compensated.Rather than PoW in which a miner's accomplishment of getting the coin relies upon the mathematical functions solved and with that miner has to utilize computing power to solve puzzles before a block is being created, due to the complex nature of the puzzles in the PoW it not so easy to accomplish that and more to the point, the more successful the coin, the harder the puzzle becomes.
This clarifies why PoS can perform around 1500 exchanges each second, which is undeniably faster than those of PoW, which, as usual, can perform just between 10 to 20 exchanges each second.
up its scalability.

Examples of PoS: Shadowcoin, Peercoin.
Examples of PoW: Bitcoin, Ethereum

CONCLUSION

To conclude with, As already been stated that Proof-of-Stake was developed as an alternative to PoW, for us to have a a robust ecosystem, BTC should adopt to the consensus mechanism.
Thank you for Reading

Cc:
@Sapwood
@reminiscence01