Proof of Work vs. Proof of Stake


The world of emerging technologies has continued to evolve, and interestingly the blockchain technology is blazing a trail that has many amazed. Two major types of algorithms facilitate the functionality of digital currencies, and they are the Proof of Work (PoW) and Proof of Stake (PoS). These algorithms also make it possible for a distributed consensus to function effectively and efficiently.

Proof of Work (PoW)

The design of the PoW algorithm enables a decentralized type of interaction between the various nodes, and this happens when there is an addition of a block to the blockchain network. The best example of this is the Bitcoin blockchain that adopts the PoW function that is referred to as SHA-256 (Secure Hash Algorithm 256). When the algorithm is applied, miners provide solutions to complex mathematical problems, to have more blocks added to the blockchain network. The PoW function provides the verification data that is needed to ensure that the work done is verified. For miners to carry out a successful block mining operation, the block’s headers need to get hashed, such that it is either less than or equal to the target. In this case, the target is a 256-bit alphanumeric string. Furthermore, there are different difficulty changes, and with each of these changes, the target also experiences some changes. For each block that gets mined, the miners get their rewards.

PoW mining with hashing power

Proof of Stake (PoS)

As opposed to the PoW algorithm, the PoS interacts with nodes differently. The PoS function was created after blockchain engineers tried to find an option to the power-intensive function of the PoW algorithm as it consumed a lot of electrical power during the mining process, and so miners agreed there was no profitability to from mining just one block because it requires high-cost equipment, electricity, and time. With the PoS function, the blocks are not mined, rather they are forged or minted, and in that case, the participants that have significant stakes in the process are chosen with a form of a pseudo-random method. The PoS function does not reward miners for forging blocks, rather there is the addition of transaction fees to the minted or forged block.

PoS using simple computers (validators)

Both algorithmic functions have their strengths, however, the PoW has more problems than the PoS, and thus makes the PoS function a better option. It may also interest you to know that the PoS function provides solutions to the problems of the PoW algorithm:

  • The PoS function is energy efficient
  • The validations of a PoS function are much faster than the PoW
  • The PoS has more validators in the system than in the PoW function.
  • We live in a world where technological advancement improves daily, and the PoS is proof that blockchain algorithms can get better.


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