Blockchain is a database of all completed transactions
Proof of Work (PoW) and Proof of Stake (PoS) are the most well-known consensus mechanisms. Their goal is to secure the networks of major cryptocurrencies.
Proof of Work is used by Bitcoin to validate transactions and ensure network security.
PoW prevents double spending.
A miner is a participant who safeguards the network. Miners use computational power to earn the right to validate new blocks and update the blockchain.
The main difference between PoW and PoS lies in how they determine validators of transaction blocks.
Proof of Stake is the most popular alternative to Proof of Work.
This consensus mechanism aims to overcome certain limitations, such as scalability issues and energy consumption.
In PoS, participants are called validators. They don’t require powerful hardware but need to stake the native cryptocurrency of the blockchain.
Based on the amount of staked cryptocurrency, the network selects a winner who receives a share of the transaction fee from the block they validated. It’s similar to an auction.
The more coins one has, the higher the chances of being chosen as a validator.
To confirm the validity of transactions recorded in the blockchain, networks employ various consensus mechanisms.
Proof of Work (PoW) is the oldest among them.
It is considered one of the most secure options. Proof of Stake (PoS) was created later but is now used in the majority of altcoin projects.
Although both are consensus mechanisms that ensure network security in a blockchain, they have differences. The main difference, of course, lies in how PoW and PoS determine the participants who will validate new transactions.
Proof of Work and Proof of Stake each have their place in the cryptocurrency ecosystem, and it is difficult to say with certainty which consensus protocol works better. PoW can be criticized for generating high carbon emissions during mining, but it has proven itself as a secure algorithm for protecting blockchain networks. However, with Ethereum transitioning from PoW to PoS, the Proof of Stake system may become more preferable for future projects.