What is Proof of Work (PoW) & Proof of Stake (PoS) in Blockchain and Cryptocurrencies
Hello Everyone !
I hope you will doing well and happy. and enjoying your blogging we will discussed the most important topics of the blockchains. And briefly describe that how they work in the blockchain. It's a important part of every famous cryptocurrencies like Bitcoin (BTC) & Etherium (ETH).
Here we can see the difference between both
What is Proof of Work (PoW) ?
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Proof of work (PoW) define a unique consensus mechanism that need a significant capacity of computing effort from a network from devices. The concept firstly was adapted digital tokens by Hal Finney in 2004 from the idea of "reusable proof of work" using most 160-bit secure hash algorithm.
• Proof of work (PoW) is decentralize mechanism that requires network members also called miners to expend effort in solving an encrypted hexadecimal numbers.
• Proof of work is also known as mining, in this mechanism receiving a reward for work done.
• Proof of work allow for work in secure peer-to-peer transaction processing mechanism without trusted third party.
Understanding Proof of Work
This detail will mainly focus on the PoW as its function in the Bitcoin network and blockchain. Commonly referred as cryptocurrency, Bitcoin is technically a digital coin —a representation a value of the Bitcoin blockchain network. The value of the coin can be exchanged for something of equal value.
What is Proof of Stake (PoS) ?
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Proof-of-stake is the crypto consensus mechanism for processing transaction and creating new blocks in the blockchain system. A consensus mechanism is method for validating entry into a distribute database and keeping the database secure. In the case of cryptocurrencies, the database is called a blockchain—so the consensus mechanism make sure the secure the blockchain.
• Under proof-of-stake (POS), validator are choosed based on the number of staking coins that they have.
• Proof-of-stake (POS) was create as a alternative to the proof-of-work (POW), the original mechanism used to validate transaction and create new blocks in the blockchain.
Understanding Proof of Stake
Proof-of-stake firstly reduce the amount of computing work need to verify blocks of the blockchain and transaction. In case of proof-of-work, healthy computing requirement kept the blockchain secures. Proof-of-stake change the way in which blocks are verify using the machine of coin owner, so there does not need as much computing work done.
Difference between Proof of Work & Proof of Stake
Proof of Work
- Block creator are called a miners
- Participant must buy equipment and energy to become miner
- Not energy efficient means large quantity energy requires
- Miner have receive block rewards
Proof of Stake
- Block creator are called validator
- Participants must own coin and token to become a validators
- Energy efficient means less energy
- Validator receives transaction fees as a rewards
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This is a nice topic you have discussed but the structure of your work would have been better if you tabulated the differences between POW and POS since you are making a Comparison between both.
Also, I expected to see similarities between a POS and POW.
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Thank You.
A very well detailed answer of( pow ) and (pos ). I wish you good luck in future.
A very well detailed answer of( pow ) and (pos ). I wish you good luck in future.