PROOF-OF-STAKE vs PROOF-OF-WORK PART 2

Let’s continue what we started yesterday. Today, we’ll explore the differences between Proof-of-Stake (PoS) and Proof-of-Work (PoW).

As discussed, ETH (like BTC) currently uses a protocol called Proof of Work, and this year (any minute now, actually) they will transition to PoS. Both of these methods are used to validate transactions on blockchain networks, but the differences are stark. One is known for security, while the other is known for speed. Let’s dig in!

Both systems do the same thing and the result is also the same: data is verified so that transactions are able to be completed. The way they both conduct those procedures however, is a bit different. We already know that BTC uses proof of work. ETH started out using proof of work too but they are now transitioning over to proof of stake.

Security and dependability are the advantages of proof-of-work. It’s almost impossible to manipulate that system because of how complex the Math equations are, that are needed to reach verification. The big disadvantages of proof of work are a lack of speed and the amount of energy it uses.

Proof-of-stake doesn’t use complex computations so that makes it easier on energy efficiency. It beats proof-of-work in that aspect. Instead of using computations, the ones that get to validate transactions are the ones with the most holdings of the network's native currency. To me, that seems unfair, but the way it works is that those who have a significant stake in the system are less likely to manipulate it. If that ever happens though, their stake could be destroyed.

Another advantage of proof-of-stake is that it’s easier for an investor to participate in that system than in the proof-of-work system because technical skills and thorough knowledge of fancy computer systems aren’t needed.🤷🏾‍♀️

I know that this is a lot of information, but at least you know where to find the information if you’re trying to understand things when the ETH transition is made! I’m so thankful for our blog platform here, God surely always knows what He’s doing!

Copyright ©2022 Sherma Jacqueline Felix, BLACK ADVANTAGE Publishing™ . The author shall neither be liable nor responsible for any loss or damage allegedly arising from any information or suggestions in this post.