Different types of Consensus Mechanisms - Steemit Crypto Academy Season 5 - Homework Post for Task 6
1) What is the difference between PoW & PoS? Advantages & Disadvantages? Which one is better in scaling Capacity? Examples?
1) What is the difference between PoW & PoS?
PoW:-
In 2009, Satoshi Nakamoto used protocol mechanisms on the bitcoin network. However, the theoretical idea was introduced by Hal Finney in 2004.
In general, proof of work can be a phrase used to describe any system that requires process effort to accomplish a task.
In relation to crypto, prisoners may be a decentralized system whereby miners solve any mathematical puzzles via their computers with the primary intention of being used. It only means that whoever succeeds in motivating the correct answer gets a reward within the cryptocurrency.
In its simplest form, with PoW, the worker solves a given puzzle, proving his job to opposite mining competitors. Together, they confirm the answer as to whether it is true. If so, the worker with the primary correct answer receives a reward when she is given a new puzzle and so the competition begins everywhere.
With PoW, the hassle of finding solutions is extraordinarily simple to verify answers to puzzles and they are made public.
Therefore, it is customary to mention that each block can be a list of solvable mathematical puzzles and many different bits of information throughout the prisoner blockchain.
PoS:-
In proof of stake, a cryptocurrency is kept (locked) on the blockchain, instead of having to hunt down a lot of computing power and energy for a group action method, the amount of time you need to put a cryptocurrency to the method of a group.
The action will vary. Whether the minimum amount of coin to be placed as a stake is the additional cryptocurrency at stake, the additional possible is that you can create a group action method and a block.
An amazing feature used in a proof-of-stake mechanism that makes it somehow secure is supposed to be dynamic, essentially if a laptop tries to circumvent the rules of multiple blockchains, their stakes will be lost.
Many of the cryptocurrencies put in are liquidated. In Proof of Stake, if you do not have time to operate your laptop every hour of the day, otherwise you do not have the minimum stake to connect the specified network, you will lend your coins to alternate computers to earn some of their share.
Difference between PoW & PoS?
PoW:-
1- Large amount of energy is required which only increases when additional miners become part of the network.
2- The reward is given to the primary person who was ready to solve the given puzzle.
3- The increased frequency in mining provides additional coins as reward to the miner/maker.
4- In cryptocurrency, proof of work is widely used for verification of transactions and mining new tokens.
5- Due to the security of the local network, there is a secure transaction of cryptocurrencies through peer-to-peer.
6- Increase in monopoly over time
7- There is a limit to the percentage of new blocks to be generated.
PoS:-
1- The most important cryptocurrency is bitcoin which runs only on proof of work and not on proof of stake.
2- Unlike the reward collected under Proof of Stake, the reward collected within Proof of Stake is network fees that are paid only to selected validators.
3- High security network within the prisoner of war which makes it difficult for attackers requiring miners' advantage.
4- Prisoners of War grants mining power to validators, supporting the proportion of coins they hold.
5- Blockchain transactions can be validated by a worker backing the amount of coin he has.
6- A coin holder in Prisoner of War will further monopoly and power consumption.
Advantages & Disadvantages?
Advantages of PoW:-
1- To be sure, one of Captive's original blessings is that it offers half of the block rewards and various edges to its miners, such as the edge being a set of mining prices or fees for mining on this framework. as a specific level.
2- The show furthermore forms a suburban association i.e. acts as the focal or supervisor of the digital cash cause.
3- Proof of Work (PoW) keeps the blockchain extremely tangled or inconvenient, while persistently currently very sluggish and high-end to attack.
Disadvantages of PoW:-
1- A prisoner of war of work results in a breakdown for future mining as freshly mined cryptocurrencies near the cap.
2- Any use of energy: Since sometimes tons of additional process add puzzle solutions, that method uses a lot of energy.
3-PoS to work/function effectively, something needs to be accomplished, e.g., having a laptop that can help optimize operations.
4- Lots of calculations that can be done through the employment of specialized and high priced laptop hardware.
Advantages of PoS:-
1- PoS consumes less energy and less power to try to work.
2- It produces space for free entry for anyone, as it is not expensive and cheap to work unlike the prisoner investing in it, which requires a well-equipped laptop and tons of Energy is consumed.
3- Transactions at POS are cheaper and faster because POS has speed once collective action is taken.
4- This can increase requests for cryptocurrencies within the blockchain as PoS involves betting coins to receive additional rewards.
Disadvantages of poS:-
1- The bet coin cannot be sold unless it is at stake, which happens if the desired amount of bet is reached.
2- Mining skill and power depend on the ratio of stake coin control by miners, this is a drawback for small investors with very low stake coins.
3- Security effectiveness is still not a critical guarantee, as PoS remains new.
4- PoS involves coin hoarding, this in turn results in an unfavorable situation for the investors, as you will not sell and bet your reward at the same time, it will be only one, either a stake or an opportunity to sell .
Which one is better in scaling Capacity? Examples?
The scaling potential is clearly outlined in terms of the amount of transactions a settlement mechanism will handle for an amount of time. The additional transactions it can do include high scaling potential.
Relevance With PoW and PoS, it is clear from all the points that PoS involves high scaling capability. With PoS virtually no machine work is required, which means it is clearly faster than PoW which requires mathematical puzzles to be solved in order to approve transactions. Hence POS includes high scaling capability.
Example:-
1-ethereum:-
While proof of stake was all harder to know than proof of work to the extent of planning a meeting on the association, in any case, ethereum should be one of the major computerized styles of money that everyone has. Proof of Stake was considered, as that effort has been increasingly geared towards Ethereum's progress, particularly since the start of their phase two update. For example, Ethereum clients are expected to contribute thirty-two eth to the option to support trades from Square Measure, as they are chosen on an irregular basis, and furthermore test and administer the blocks that they consider.
Algorand:-
Algorand actually uses Pure Proof of Stake . This is the second largest market cap for coins abusing PoS. It is very unlikely for small coin house owners to damage the network and on the other hand, giant coin house owners will not destabilize the system as the currency loses its power and they lose at the end of the day.
Conclusions
Traditional blockchain class measures such as bitcoin measure abuse captives. Ethereum which is also in the standard blockchain is moving from captive to PoS. Although we have seen each act, His blessings also have drawbacks; Thus I'm going to go with the opinion that there is ground to be faced for a selected excellent selection or winner especially as PoS is relatively new.