Fund:0.012 ETH / \$6.94

# What is the main differences between PoW and PoS?

4 weeks ago
13

I’ve read many articles and comments about Proof of Work and Proof of Stake. It seems like everyone is switching over to PoS but I don’t see it’s main benefits compared to PoW.

Can someone explain what the differences are and why people seem to like proof of stake better?

```(PoW) requires proof that work of some kind occurred. In the case of Bitcoin miners are required to do this work before any of their blocks is accepted by others.
(PoS) requires users that have a high stake at the currency (i.e. hold a lot of coins) to determine the next block. This has a high risk of some party achieving monopoly of the currency but there are several methods to prevent that (by allocating random stakeholders to agree on a new block, and others).
```
3 weeks ago
`Check these two articles out and see if this helpsProof of stake (POS) and Proof of work (POW)https://blockonomi.com/proof-stake-cryptocurrencies/  https://www.youtube.com/watch?v=SiKnWBPkQ4I`
3 weeks ago
```Proof of Work is basically miners trying to find the solution for a very difficult Math problem by using two resources namely computer and electricity . It takes ALOT of computing power to find a solution to that problem so it will lead to high costs for buying a device with that much power and also the electricity bill will rise significantly. Since most people can not afford to buy these devices and pay high bills, the number of miners will get smaller and smaller in time which might result in what is known as a 51% attack. 51% is basically when a miner or group of miners control over 50% of the entire network's computational power. This might lead to the miner/miners making valid transactions invalid and also double spending. Thats why you see many projects nowadays avoiding PoW.

Proof of stake is when a miner lock up a certain amount of their funds to verify transactions. PoS doesn't need you to solve complex Mathematical problens like PoW. So more average users can use PoS to mine a coin. PoS because of this is more decentralized than PoW. the chance that a 51% attack may happen is also very unlikely, so its preferred by many```
4 weeks ago
```Proof of work (PoW) requires proof that work of some kind occurred. In the case of Bitcoin miners are required to do this work before any of their blocks is accepted by others.

Proof of stake (PoS) requires users that have a high stake at the currency to determine the next block. This has a high risk of some party achieving monopoly of the currency but there are several methods to prevent that (by allocating random stakeholders to agree on a new block, and others). More information here https://medium.com/novamining/main-differences-between-pow-and-pos-cryptocurrency-mining-c4cc279d9739

The main difference could be summarized in that proof of work requires burning an external resource (mining hardware) while proof of stake does not. Proof of work could be criticized that if price/bitcoin rewards/fees drop then less people have incentives to mine thus the security of the system is reduced.

Proof of stake could be criticized that since it is free to stake/add new blocks to the blockchain you could use it to stake several similar coins at the same time (see "nothing at stake" problem in PoS link above).```
4 weeks ago
`The solution using a PoW algorithm is the introduction of an ongoing investment (Craig Wright, 2017). In a PoS system, prior investment is crystallised allowing continued control with little further investment. PoW differs in that it requires continuous investment and innovation. Each innovation leads to waves of creation over the destruction of the old order. This process creates continued growth. PoW-based systems continue to grow and continue to update and change. Any incumbent corporation or other entity needs to continue to invest knowing that their continued dominance is not assured. Any mining hardware would be expected to become obsolete within a short amount of time. For all PoW systems, economic efficiencies naturally lead towards larger competing firms. PoS allows players to form protective cartels. In competitive environments cartels breakdown naturally. PoS can be created in a non-competitive manner. Even if the system starts off competitively, it is the nature of an oligopoly to seek abnormal profits and this can be achieved through the manipulation of the rules over time. Such manipulation can result in increasing levels of control as the incumbent firms ensure that innovation does not change or disrupt the status quo. The system degrades into oligarchy. This is a power structure with rule by a small number of people.`
4 weeks ago