PROOF-OF-STAKE vs PROOF-OF-WORK PART 1

Yesterday we touched on Proof-of-Stake (PoS) and Proof-of-work (PoW) and over the next 2 days we’ll see what the differences are, as well as advantages and disadvantages.

I am quoting here from Coindesk dot com, “Proof-of-work is a competition between miners to solve cryptographic puzzles and validate transactions in order to earn block rewards. Proof-of-stake implements randomly chosen validators to make sure the transaction is reliable, compensating them in return with crypto.”

So the Proof-of-Stake model allows those who own crypto to stake their coins to create their own validator nodes (validator nodes are responsible for verifying and maintaining a record of transactions). Staking is pledging your crypto to be used for verifying transactions by locking the coins up while they’re being staked - but your coins can be unstaked at the set time you determined before staking.

For both systems, the verification process involves computer nodes, and these nodes are used to verify our transactions. I’ve learned that almost anyone can operate a node if you have a good amount of technical knowledge. Working with proof-of-work is said to use a lot of computing power too; and since the way nodes operate is by competing for the chance to verify transactions (by trying to solve mathematical puzzles that are sometimes complex), that could be why so much computing power is required.🤷🏾‍♀️😩

Both of these methods are used to validate transactions on blockchain networks. As with all cryptocurrencies, we already know that a central authority doesn't oversee them; transactions are verified instead by the network to make sure the information is accurate.

Bitcoin (BTC) uses proof-of-work, and Ethereum (ETH) started off using proof-of-work as well, but they are now transitioning over to proof-of-stake. Is one better than the other? We’ll dive deeper into this tomorrow and examine the pros and cons. See you then!

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.