Different Consensus Mechanisms: PoW Vs. PoS

CRIPTO currency 101: Understand the two main mechanisms of consensus

The world of cryptocurrencies is complex and developing the space quickly, with new technologies and mechanisms of consensus that appear regularly. Basically, the Crypto currency is based on a decentralized network that allows users to control their own transactions and property without the need for intermediaries such as banks or governments.

In this article, we will immerse ourselves in two most commonly used mechanisms of consensus in the crypto currency: proof of work (POW) and proof of share (POS). These mechanisms are key to the functioning of different crypto currency and have significant consequences on their safety, scalability and adoption.

Proof of work (Pow)

Pow is the most commonly used consensual mechanism in cryptocurrency currency. It was introduced for the first time with a hard fork of bitcoin, and since then it has been adopted by many other crypto currencies, including Ethereum, Monero and Litecoin.

In POW, a minor network is in competition for solving complex mathematical puzzles to confirm the transactions on Blockchain. These puzzles are designed so that it is difficult to solve them using the power of the current computer, hence the term “proof of work”. The first minor to handle the puzzle can add a new blockchain block transaction and is awarded with a newly minted cryptocurrency currency.

Here’s how it works:

• Minors collect and check transactions at Blockchain.

• Small chooses a group of transactions to be included in a new block (“Block Rewards”).

• Small calculates mathematical puzzles for each transaction of the selected group.

• The first minor to solve the puzzle, known as “work evidence”, rewards the newly opened Crypto currency and the right to add the next blockchain transaction block.

Advantages of Employments:

• Energy efficiency : Ground prolong cap requires significant calculation power, which reduces energy consumption.

• Security : The use of complex mathematical puzzles makes it difficult for malicious actors to manipulate network.

• Evolution

  

  : Pow can manage large quantities of transactions per second.

Disadvantages of captivity:

• Energy Consumption

  : Energy Required to exploit Crypto currency is important, contributing to the show of greenhouse gases and environmental concerns.

• Centralized control : operating pools, which are often dominated by large companies or countries, can lead to the centralization of the network.

Proof of share (POS)

POS gained popularity as a more energy efficient alternative to capture. She was introduced for the first time with the Hard Fork 2016 of Ethereum, and has since adopted many other crypto currencies.

In POS, validators are selected to create new blocks in accordance with the balance of cryptocurrencies in their wallets. Walidators who have a higher amount of cryptocurrency (that is, those who have more) are more likely to be selected to participate in the validation process.

Here’s how it works:

• Users deposit their crypto currency in a portfolio or exchange.

• A random selection pool was created that selects users according to their balance.

• A high -level beneficiary of the pool was selected as a validator.

Benefits POS:

• Energy efficiency : POS requires much less energy than POW, which makes it more environmentally friendly.

• Increased security : Walidators have more control over their property and it is less likely to manipulate malicious actors.

• Reduction of transaction costs : As the number of validators increases, the costs associated with the validation of transactions.

Disadvantages POS:

• Centralization : The use of random selection can lead to the centralization of the network if a small group of users dominates.

• Slower blocks of the block : POS can be slower than POW, as the validation process requires more time due to the need for several validators.

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