• Mashum Mollah, CEO at Blogmanagement.io


• 29.11.2022 06:45 pm
undisclosed

Introduction

Do you know why Cryptocurrency is safe? It is because they are powered by the Blockchain. In the Blockchain, when you transact, things get recorded in the distributed ledger. Moreover, the information gets recorded in the form of blocks. Here comes the role of the Proof of Work and the Proof of Stake.

They are both algorithms to keep the Blockchain safe and secure. Both have a similar philosophy, but there is a difference between the two. The article discusses the difference between Proof of work and Proof of Stake.

The Difference Between Proof Of Work And Proof Of Stake

You must know that the internet world is filled with malicious elements that always try to drill through your network. Proof of Work and Proof of Stake prevent these elements from seeping through the system.

Now, what is the difference between Proof of Work and Proof of Stake? We will know all of them and decide on the question of which one is better for the stakeholders.

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Proof Of Work

In practice, the Proof of work is actually a practice through which the transactions are integrated into a Blockchain network in the form of blocks. When the miners mine Cryptocurrency, they get puzzles. The puzzles are solved through the trial and error method.

When the puzzle gets solved, the miners get some rewards. While completing the puzzle, the miners get the authority to add blocks to the Blockchain. Now when the miner authenticates the blocks, digital currency is added to the Blockchain.

Proof of work requires energy consumption, and you need fast computers that can perform things for you. The time of transactions slows down with the increase of the Crypto network.

Proof Of Stake

Here the mines pledge to invest in Digital Currency before validating transactions with Proof of the stake. The minors put up their own coins at stake. They need to show the time for validating the transactions. The choice is random,s weighted algorithms based on the stake and validation experience.

Now the miner verifies the block, then it gets added to the chain. Thus the minor receives the Cryptocurrency along with their stakes. Verifying the stakes is a must; if the miners verify the block correctly, the stakes or the coins can be recovered.

Now the philosophy that works here is that miners put the coin at stake. They, therefore, are less likely to steal the coins. This automatically turns out to be another shield.

Consumption Of Energy

One of the greatest allegations with Cryptocurrency mining is the consumption of energy. Mining Cryptocurrency requires the involvement of supercomputers. High-powered computers consume a lot of energy.

The Proof of work system of mining Cryptocurrency is energy-consuming because of the involvement of the authentication model using high-powered computers. This energy consumed in mining Cryptocurrency, especially Bitcoin, is much higher.

Bitcoin uses the Proof of work mechanism and therefore consumes a lot of energy. According to a study conducted by the University of Cambridge, it is observed that mining Bitcoins consumes 39% of the world’s annual electricity.

Compared to Bitcoin, Ethereum, which follows the Proof of Stake method of mining Cryptocurrency, consumes less than 99.95% less energy compared to that of Bitcoin.

Risks Of Atack

In the Proof of Work, the miners must compete to complete the equations. Here miners get to solve the puzzles. Based on trial and error. Thus the miners with fast computers can control.

They can stop the transaction from being confirmed if they have more than 50% control. They can also spend double spending to bring the thing in their favor.

On the other hand, the Proof of stake allows the minors to validate the blocks. Here the stakes of the miners are involved. Thus they can not take refuge in fraud because it can completely disrupt their investment.

Which One Is Better?

Both mechanisms have the same aim and objective: to provide safety and security to the miners’ investment. But looking at the point of electricity consumption, it can be said the Proof of stake offers better, safer, and cost-effective options to the miners.