Steemit Crypto Academy Season 4 Beginners' course - Homework post for Task 6: Different types of Consensus Mechanisms By @sir-charles-jude
Hello everyone, Today I will talk about the consensus mechanism. A very big thanks to professor @sapwood for his lecture on consensus mechanism it was very educative.
I will be answering the following questions below.
QUESTIONS
• What is the difference between PoW and PoS?
• Advantages and disadvantages?
•Which one is better in scaling capacity? Examples?
Before I go into these questions, I will like to give you a brief definition of PoW and PoS.
PROOF OF WORK (PoW)
Image edited by me on canva. Image sourceProof of work is the first consensus mechanism. It was invented by Moni Naor and Cynthia Dwork in the year 1993. Proof of work(PoS) requires miners to put in a lot of effort to solve cryptographic puzzles in other to confirm a transaction in a decentralized blockchain. Some popular cryptocurrencies under the proof of work mechanism are litecoin, Bitcoin, and Ethereum but Ethereum is now moving to the Proof of stake(PoS) consensus mechanism.
PROOF OF STAKE (PoS)
Image edited by me on canva. Image sourceProof of stake was invented by Sunny King and Scott Nadal in the year 2012. It's a type of consensus mechanism where the validation of transactions depends on the number of coins staked. In Proof of Stake, mining power depends on the amount of coin staked or held by the miner.
Proof of stake doesn’t require too much energy unlike proof of work. Some popular cryptocurrency that uses PoS is Cardano, cosmos, etc.
WHAT IS THE DIFFERENCE BETWEEN POW AND POS?
Image edited by me on canva. Image source
| PROOF OF WORK (POW) | PROOF OF STAKE (POS) |
|---|---|
| In PoW, a mining rig is required. | Doesn’t require any mining rig. |
| Energy is inefficient. | Energy is efficient. |
| High computing energy is required to validate transactions. | A large number of coins is required to validate transactions. |
| It’s more secured because of its decentralization. | It’s less secure because of its centralization. |
| In PoW, the transaction process is slow. | The transaction process in PoS is fast. |
| Selection of reward is done randomly. | selection of reward depends on your staking power. |
ADVANTAGES AND DISADVANTAGES OF PROOF OF WORK (POW) AND PROOF OF STAKE (POS).
ADVANTAGES OF PROOF OF WORK (POW).
• It’s decentralized which makes it very secure.
• Miner has a chance of being rewarded equally because its selection of reward is done randomly unlike the PoS.
DISADVANTAGES OF PROOF OF WORK (POW).
• Transaction process in proof of work is slow.
• It requires very high computing energy to validate transaction.
• It requires a very high electricity consumption.
ADVANTAGES OF PROOF OF STAKE (POS)
• It requires low computing energy to validate transactions, unlike the PoW.
• Its transaction process is very fast.
• It doesn’t require high electricity consumption, unlike the PoW.
DISADVANTAGES OF PROOF OF STAKE (POS)
• Miners don’t have a chance of equally rewarding because reward in PoW depends on the amount of coin staked.
• It’s not very secured because of its centralized nature.
WHICH ONE IS BETTER IN SCALING CAPACITY? EXAMPLE?
Proof of stake (PoS) has better scaling capacity more than the proof of work (PoW) because, in the PoS, more transactions can be done in a short period because of its fastest and its consumption of energy is lower than that of PoW. It
Ethereum is an example of a cryptocurrency that plans on moving from proof of work (PoW) to Proof of Stake (PoS).
Below, I will list some popular coins that are under Pow and PoS.
| PROOF OF WORK | PROOF OF STAKE |
|---|---|
| Bitcoin | cardano |
| Litecoin | BNB |
| Dogecoin | dash |
| Ethereum classic | cosmos |
| Zcash | Polkadot |
CONCLUSION
I’m so grateful to professor @sapwood for the amazing lecture. I appreciate the effort he put to explain the consensus mechanism so well. I also made some research on steem and found out that steem is under Delegated-proof-of-stake. I had some knowledge about consensus mechanisms before but after professor @sapwood lecture on consensus mechanism, my knowledge of consensus mechanism increased so well. I learned so many new things.
