There have been countless arguments surrounding both the proof-of-work (PoW) and proof-of-stake (PoS) as a means of gaining consensus on a blockchain network.
Many people have been asking themselves which one is better, and why? In this article, I'll go over some of the main benefits and drawbacks of each consensus mechanism.
Let's dive in.
What Is Proof-Of-Work (PoW)?
Proof-of-work is a decentralized consensus mechanism first introduced by Bitcoin (BTC). We will use the Bitcoin network as an example to understand the proof-of-work consensus mechanism.
The Bitcoin network essentially requires members to contribute computing power, such as graphics processing units, to solve arbitrary mathematical puzzles, and prevent anyone from gaining control or manipulating the system.
Every transaction that occurs is validated before it gets added to the blockchain. Each block then gets validated by the miners, who get rewarded BTC tokens as they have put in the “work” through their processing units. Hence, this is called proof-of-work.
The proof-of-work consensus mechanism has stood the test of time. This consensus mechanism has successfully validated billions of transactions on the Bitcoin blockchain for years and has maintained its authenticity and reliability as the most secure and decentralized consensus mechanism created till date.
What Is Proof-Of-Stake (PoS)?
Proof-of-stake (PoS) is a consensus mechanism used on blockchain networks created as an alternative to the PoW method for validating transactions.
In this mechanism, cryptocurrency owners can validate block transactions based on the number of coins the validator stakes (instead of miners validating them). Hence, this is called proof-of-stake (PoS).
The validators in PoS are chosen at random. To become a validator, one needs to stake a specific amount of cryptocurrency token required by that specific blockchain.
There are multiple variations of PoS, such as delegated-proof-of-stake (DPoS), etc. These have
