Crypto Academy Season 3 Beginner Course - Task 4: Different Kinds of Consensus Mechanisms @lesandra
Hi everybody how are you? I come here to bring you the fourth CrytoAcademy Introduction task prepared by professor @sapwood. With this we can learn and appreciate a little more about the processes behind the cryptocurrencies or some of the most used today with their advantages and disadvantages
What is the difference between PoW and PoS?
Proof of Work (PoW)
Although both are consensus protocols (mechanisms designed to achieve that the nodes reach an agreement when validating a new block) it should be noted that not all blockchains use the same protocols, today it could be said that the most famous and used are Proof of Work (PoW) and Proof of Stake (PoW).
In PoW, "Proof of Work" for its translation into Spanish as proof of work, is required as its name indicates, that a specific job be done ... But what is that job?
Normally, the solution of complicated mathematical problems is required, either solving algorithms, calculations or simply high-level problems, for example, for Bitcoin it is required to achieve Byzantine fault tolerance, which is a high-level computer problem that consists of the creation of mechanisms to avoid a catastrophic failure in a system, with the obstacle that malicious factors may exist in the system. To achieve tolerance, the mechanisms created must guarantee that these actors cannot lead the system to fail.This is something so complicated that it requires large amounts of energy nowadays used in powerful computer equipment that manages to give the answer to this problem and finally reach the consensus that results in the generation of the new blocks, of course all this was achieved for the first time once thanks to the algorithm created by Satoshi Nakamoto which gradually led the blockchain to be what it is today.
Proof of Stake (PoS)
In PoS, "Proof of Stake" which in Spanish can be translated more or less as "Proof of Stake" requires that users have cryptocurrencies in a wallet to be able to generate new blocks, basically by having said cryptocurrencies, the participation of said user on the network. All this in order to ensure that the network, only using "participation" as a means to reach consensus. This system rewards said participation, so the more cryptocurrencies a user has, the more possibility they will have to mine a new block on the blockchain and receive crypto waves as a reward.All this was born in order to solve various problems that exist in the PoW, such as some security problems, scalability and of course the strong impact that the PoW has on the environment and that in PoS it does not exist, because in this consensus protocol it does not the use of powerful computer equipment is required.
Then we would find that the main difference between PoW and PoS is in the way in which the new blocks are mined or validated, while in PoW complex mathematical problems need to be solved using extremely powerful hardware to solve these problems and reach consensus to validate the blocks.
Differences between Pow and Pos
| Proof of work | proof of stake |
|---|---|
| In proof of work, chain miners must compete to solve a difficult puzzle using their computers to be added a block | In proof of stake , there is no competition the block creator is chosen by an algorithm based on the stake the user is holding at that particular time |
| In proof of work, the miners solve hard puzzles by using their computational resources | In proof of stake , the miners there are validators who lock up some of their ether as stake in the ecosystem . |
| Energy consumption high | Energy consumption low. |
| Proof of work are miners are referred to as digital chains of block | proof of stake are validators who are responsible for verifying transactions . |
| PoW uses a bigger quantity of computing power throughout the mining method. | The chance of this being a brand new block is measured by the number of coins the person has. |
Advantages Disadvantages of POW?
| Proof of Work (PoW) Benefits: | Proof of Work (PoW) disadvantages: |
|---|---|
| It is decentralized mechanism that is highly secured and also tested over years for its formidable security architecture | Rigidity of mechanism that hampers improvement of system. |
| The competition between miners offers you great security. | Relies on a large sum of electrical power and large capacity equipment to achieve consensus |
| Its way of operating is sustainable with the new technological updates. | Its scalability efficiency is quite low. |
| It is an incorruptible totally decentralized process | It presents the 51% validation attack. |
Advantages Disadvantages of POS?
| Proofof Stake (PoS) Benefits: | Proof of Stake (PoS)disadvantages: |
|---|---|
| No additional power consumption occur as compared to PoW | Higher investment required to the contribution of PoS |
| We can gain fixed profit according to the percentage of our investment. | The validators don't receive block reward. Only, they receive network fees. |
| In this POS system, people with very little network expertise or skills will simply participate within the stacking method. | The reward within the proof of stake system is randomly, supported quantity staked, that only helps the made to induce richer. |
Which is better for scaling capacity? Examples?
It depends a lot on the demands of the user since both have risks to take into account, as in the case of PoW that its profitability and energy cost is high, this already depends on where the person lives, but it has an assured profit or PoS that is little safe against computer attacks compared to PoW, although the latter is increasingly improved, leaving a clear winner that would be PoS since it is currently not very secure but over time it is improving, assuming that its efficiency with transactions such as ethereum They are very attractive to the miners' eye since being in PoW times of 10 minutes when Ethereum was switched to PoS its time was reduced to 16 seconds giving a marking a great difference between the two
Conclusion
Undoubtedly, these consensus algorithms are fundamental in the cryptographic world, the PoW proof of work has a very efficient way of using where miners compete to validate transactions and thus obtain rewards from it, this validation process is given through puzzles and mathematical processes that miners solve by doing trial and error again and again until they achieve it, this requires continuous electricity consumption unlike the PoS proof of stake, it is carried out randomly where the miners must have a number of coins and a stake in the network, once chosen you will be able to validate the transactions and create new blocks. This offers you great scalability and great performance in transactions.
Hello @lesandra, I’m glad you participated in the 4th Task of the Beginner’s class at the Steemit Crypto Academy. Your grades in this task are as follows:
Recommendation / Feedback:
You explanations are superb and writing skill is awesome. Thank you for submitting your homework. task 4. We hope to see the rest of your submissions.