Consensus mechanisms are an essential aspect of blockchain technology, allowing the network nodes to agree on one version of the Blockchain without relying solely on the majority of voting. Blockchains uses several consensus mechanisms, each with its strengths and weaknesses. In this answer we will investigate the differences in evidence of the work (POW) and Stake (POS) – two important algorithms of consensus.
Proof of work (POW)
POW is the most widely used algorithm for Bitcoin and other cryptocurrencies such as Ethereum. Here is a simplified review:
- Miners compete in solving a complex mathematical puzzle of : Mountains use powerful computers to solve a complex mathematical equation that requires significant calculation power.
- The solution is checked by the network
: When the cashier solves the puzzle, he is broadcast on the net and his decision is checked by other nodes through the process called « bag ».
- Miner receives the award with new cryptocurrency blocks : The first minerer to solve the puzzle can create a new block Blockchain and is awarded a newly minted cryptocurrency (eg Bitcoin).
Basic POW characteristics:
- High power consumption: Mountains require high calculation power, which increases electricity consumption.
- A lot of energy requiring: POW SUPENSUS has been criticized for its environmental impact on the energy needed to solve complex mathematical puzzles.
- Centralized: The need for powerful computers and dependence on centralized government (mining pools) can lead to mining centralization.
Stake (POS) proof
Pos, also known as « proof of shares », is an alternative of a consensus algorithm, which has become popular in recent years. Here’s how it works:
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- Coins are transferred to the pool : Each node has a set of Stake coins that reflects their ownership package on the network.
- Miner selected random selection : When a new block is created, the mining is randomly selected from a knot pool with attached coins.
Basic POS characteristics:
- Lower energy consumption: POS requires significantly less calculation power than POW, making it more environmentally friendly.
- Decentralized: The network is decentralized and no entity controls the result.
- Honesty: POS, the selection of miners is random, which can lead to a fairer mining awards.
Comparison between POW and POS
|
Function |
POW (Bitcoin) |
POS (Ethereum) |
| — | — | — |
| Energy consumption High | Low |
| Environmental impact Criticized Not as significant
| Centralization Centralized mining pool Decentralized network
| Honesty | Random selection of mining tins Random selection, but a greater influence on large statins
In summary, although POW and POS are consensus algorithms used on blockchain networks, they vary greatly on energy consumption, environmental impact, centralization and honesty. POW is still widely used in Bitcoin, but its use has fallen as other cryptocurrencies such as Ethereum have accepted POS. As the industry progresses, we can expect more nodes to accept alternative mechanisms of consensus that balance security, decentralization and environmental sustainability.
