Safety protocols of a Blockchain are very important. Being that they’re the way for transactions to be verified without third parties, they’re a primary base of the same. The most used protocol among cryptos is the proof of work. Now well, with the news that Ethereum is considering to migrate to another type of protocol, proof of stake, many are asking which are the differences between these two. In the following article we’ll explain it.
A Proof of Work, or PoW, is a protocol which goal is to stop cyber attacks that a system can suffer because of DDoS (Denial of Service), This works determining which of the Blockchains’ blocks will be added to the blockchain afer being mined, making the nods come to a decentralized agreement. Thus, it can confirm the transactions and produce new blocks.
This works through complex mathematic data that miners have to solve to add a block to the Blockchain and get cryptos as reward. The complexity of the mathematic data to decipher is going to depend on the amount of users, power and load of the network. This is the safety protocol of Bitcoin, Ethereum and plenty other cryptocurrencies. This calculation complexity also brings with it a bigger safety level, being that the DDoS attacks are more expensive than the benefit it can bring to the hacker.
Another existing protocol is the Proof of Stake or PoS. This is a protocol to confirm transactions where the algorythm is made not to reward for solving algorythms, but because of the amount of currencies stored in the system. Thus, the miners get an interest by the community. This way, the calculation doesn’t have much difference, and only need to prove the ownership of a determined percentage of cryptos.
The blocks don’t need to be mined by users, but they’re coined according to the participation that the networks’ user has. All blocks are pre-mined, since an amount is fixed in cryptos supply from the beginning. The miners work then is to confirm transactions and receive fees from verified transactions. That’s why in this kind of protocols, they’re called forgers and not miners.
First, the PoW and PoS differ because of the way to reward whose make the transactions’ verifications. This way, in the PoW the miner it’s rewarded to solve the mathematic calculation that create new cryptocurrencies. In PoS, they’re rewarded for verifying transactions with an interest or fee for verified transaction or transactions
Thus, in one they’re rewarded for creating new blocks o the Blockchain and mine a new crypto, and on the other they’re rewarded because of the percentage of fee for verified transactions. Another difference between the two, is the amount of energy resource, and this translates in a high electric cost. The PoS, differently, doesn’t require much computer power and thus a lower electric consumption
Lastly, we have the security ambit. For many, the PoS is much weaker to ciber attacks than PoW, for several reasons, from which we’ll give you two: first, the cost of the first is lower, and that make the hackers to consider that the benefit is higher than the cost. The second is that the complexity of the encryption to verify transaction is lower in the PoS than in PoW, so it could be easier to hack it.
Did you like this article about Proof of Work vs. Proof of Stake? Share it!