Crypto Academy Season 3 Beginners' course - Task 4 : Different types of Consensus Mechanisms by @vectorshore

vectorshore (57)Beginner[1,2,4,5,6,7]in SteemitCryptoAcademy • 3 years ago (edited)

Hi everyone, in respect of the season 3 beginners' course, I am here for my assignment on the Task 4 as the title of the post says.

After answering and submitting my assignment on the task 3, I decided to go further to read the task 4. As I was about to start, I had a thought that I should just read the task 3 again to properly assimilate what has been taught.

I went back to task 3 and read it again to understand more on cryptocurrencies and bitcoin. I also did more google search on bitcoin as well as steem, and I understood more on how they work.

For this task, I will be answering question number one (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 & PoS? Advantages & Disadvantages?

The difference between PoW and PoS is that, for PoW (Proof-of-Work), the miners involved in it are to validate and verify the transactions along side their time stamps.

This requires a lot of effort or work to computer and solve complex mathematical puzzles.

In addition, when it comes to PoW, the miners are selected randomly. PoW is also more secure than that of PoS

For PoS (Proof-of-Stake), it doesn't require a mining rig, and the block creators and validators are chosen based on a defined stake.

What this entails is that the higher the stake, the higher the chance if becoming a block creator and validator, which is quite different from that of the PoW which miners are chosen randomly. And also, the block creators and validators of PoS earn a reward.

The PoS is less secure than that of the PoW, and it doesn't require too much energy.

Advantages of PoS

It does not consume much of electricity power in order to secure the blockchain
Stakers acquire tokens to create and validate blocks.
Reduced Cost: This means that it does not require powerful computer equipments which will make one spend so much money on getting one.

Disadvantages of PoS

All currencies are saved in order to earn more profits
The competition is very high in order to become a creator or validator

Advantages of PoW

It has protection against hackers attacks such as Distributed Denial Of Service attacks (DDOS)
It is also fully decentralised, so nobody is boss or master over the other.

Disadvantages of PoW

A capable computer system high processing power is required to mine the blocks.
It wastes times and resources as only the person who solves the puzzle gets rewarded.