Cryptoacademy season 3 beginners course homework post for task 4, difference between POS and POW, done by @phenomenal1052 for professor @sapwood

Good days everyone, am happy to be able to be a part of this, and a big ups to the professor for this great lecture.

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

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What is the difference between POW and POS?

Before I answer and state the difference between these two algorithm, I deem it fit to first share my knowledge on what POW and POS is all about.

• POW

  Proof-Of-Work is the original decentralized Consensus algorithm in the blockchain network that secures many Crypto currencies.
  It requires people called “Miners” of a network to expand their effort in solving mathematical puzzle every minutes ( it's varies, some 10, some 2.5 minutes) that helps in securing the system and aiding safe peer to peer transaction and they earn reward on every successful mining. The likes of Bitcoin and Ethereum and many more makes use of Proof of work.

• POS

  The main concept of Proof of stake is simple, it's all about the more coins you have, the more mining power you have. Like a winner can mine and also be involved in validation of block transactions according to how much coin he/she holds.
  It was created as an alternative to Proof of work.

Difference between POW and POS.

POW	POS
* Like I said before the probability of	In the other hand, the probability of validating a
mining a block depends on solving a puzzle fastest	transactions is based on how much coins held.
*The miner to solve the mathematical	In POS the validator does not receive reward, they are
puzzle gets a reward.	the one who receives the transaction fee payed after transactions
* In POW hackers need to have 51%	But in POS hackers would need to own and hold 51% of
of computation power to add harmful	all the crypto currency on the network because POS is all
block to the system.	about how much you have, and having 51% is impossible.
* The POW system is consume more	The POS on the other hand consume less energy, more
energy and they are less costly but more efficient.	money and less efficient than POW.
* POW requires initial investment to	POS requires initial investment in buying coins to have big
buy hardware used in mining.	Mining power.

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Advantages and Disadvantages of POW and POS

ADVANTAGES OF POW and POS

POW	POS
* The pow idea helps to secure crypto from hackers, an hackers will need 51% of the network computing power, and this is very hard even impossible.	In the POS system, a hacker also needs 51% of the coins in circulation to be able to hack, this is also Impossible
* Rewards are given to miners for solving mathematical puzzle and the fastest miner gets the reward	POS does not consume plenty of energy, it requires only few amount of electricity to secure the network.

Disadvantages of POW and POS

POW	POS
* POW consumes huge amount of energy	the main disadvantage of POS is that it setup is to
and it ends up wasted if a miner is did not	make the rich richer, and it cost a lot start, if a miner
get the amount of zero first while validating transaction	wants to earn big.
* POW reduces the level of decentralization	The way POS works can be argued that it does not
Like I said earlier, that mining using the POW	align with the concept of decentralization that the
consumes energy, and facts has it that 70%	blockchain is all about. It gives more power to
of hashing power comes from China, because	some people, rather than decentralize it among
China has cheap electricity, and this gives China	the users.
a big advantage in mining.

Which one is better in scaling capacity?

I will go with POS because it solves the problems and downside of POW, like the huge amount of energy consumed and wasted on solving hashrate, and it also gives room for people with small infrastructure to participate and earn.
For example, it is difficult for someone with just one computer to be faster than people with big, more resources to solve the puzzle faster.
POS is system makes its harder to hack than the POW system, it is easier for hackers to pull resources together and get 51% computation power than for them to get 51% of the amount of coins in circulation. Looking at the two system it is safe to say that scalability is better using the POS system thhan the POW System.

Examples of network that makes use of POS are : ETHEREUM, DASH, NEO.

Conclusion

We can keep talking about this all day, but at the end of the day, the two systems have their good, bad and ugly, so it's just finding which is perfect for a network. Thank you for reading, and am happy to take part in this.

Cc. @sapwood