Home » Proof of Work Vs. Proof of Stake – For Easy Understanding

Proof of Work Vs. Proof of Stake – For Easy Understanding

Proof of Work Vs. Proof of Stake
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In this Proof of Work Vs. Proof of Stake comparison, we will learn about these consensus mechanisms and why they are important to cryptocurrency.

Proof of Work(PoW) and Proof of stake(PoW) are two of the most important consensus mechanisms cryptocurrency functions with. Think of it as the law enforcement of crypto, guiding, maintaining, and securing transactions, records, and the blockchain ecosystem.

What is Consensus Mechanism?

The crypto community needs to make sure that nobody spends the same coin twice in a process called “Double Spending”, and without a central authority like Visa, PayPal, or a central bank to guard it, a consensus mechanism is simply a system that allows all computers in a computer network to agree on which transactions are valid.

Proof of work(PoW) and proof of stake(PoS) are the two major consensus mechanisms cryptocurrencies use to validate transactions and create new tokens.

Bitcoin and Ethereum were the first, to adopt proof of work(PoW) to achieve those goals through a process called mining. Though bitcoin’s transactions are highly secured by proof of work(PoW), it consumes a lot of electricity and the number of transactions it handles at once is very limited, hence, the need for a new consensus mechanism arose.

Cardano, Tezos, and Ethereum 2.0 blockchain use proof of stake(PoS) to achieve the same goals through a process called staking. This system is energy efficient and addresses the problems encountered in Proof of Work(PoW)


A blockchain is a network that contains a series of blocks arranged based on a transaction order. The genesis block, or block zero, is the first block in a Proof of Work(PoW) blockchain, which is hardcoded into the software. This block does not refer to a previous block. The subsequent blocks uploaded to the blockchain always refer back to the prior blocks, this way, it is highly impossible to corrupt the data as they are all connected.


This is the original system first used by bitcoin. Proof of work is secured and verified by miners all over the world, competing to be the first to complete a mathematical puzzle using supercomputers known as “nodes”. A node is any physical device that can receive, and send data within a network. The winner gets to update the blockchain and earn a reward in crypto. This process is known as mining.

The computational method of achieving this task is known as Proof of Work, and it was made popular by Bitcoin (BTC).

The present reward for updating the bitcoin blockchain is 6.25 BTC

Proof of work has been proven to be a dependable way to secure and maintain the blockchain, and as the value of the cryptocurrency grows, more miners are encouraged to join the network, increasing its power and security, making it extremely difficult for any individual or group to corrupt the data in any way.

Sadly, this process requires a lot of electricity to operate and its adverse effects on our environment have been well documented.


In the proof-of-stake system, validators (the proof-of-stake equivalent of miners) are chosen to validate a block based on the number of coins they have temporarily deposited to the network rather than having a race between miners to determine which node can add a block.

In a proof-of-stake system, potential participants in the process of adding blocks to a PoS blockchain must stake, or lock, a specific amount of the network’s cryptocurrency. The chances of minting the next block in the system are determined by the number of crypto assets they have locked. If users act badly, they may lose a portion or all of their staked coins.

Participants are required to spend money and dedicate their resources to the network, similar to how miners in the proof of work must expend electricity. Those who have spent money on coins to earn these rewards are the true investors in the system.

In the PoS system, the participants do not compete for the right to add blocks, instead of being mined, blocks are referred to as minted or forged.

The proof-of-stake system has several advantages over the proof-of-work scheme, these include greater energy efficiency as minting blocks don’t use much energy, also, you don’t need top-of-the-line technology to create new blocks.

Proof-of-stake encourages the system in the network to have more nodes, as such, it is seen as the consensus mechanism least prone to centralization.

Proof of Work Vs. Proof of Stake

Proof of WorkProof of Stake
1) Mining a block- How much work you input, determines if you will be chosen to mine a block. The miner must be the first to finish the puzzle.There is no puzzle to solve as an algorithm randomly chooses who gets to mint the block among participants that have staked their coins.
2) Rewards- The first person to mine the block, receives the reward.There are no rewards, rather the participants are paid a network fee.
3) Efficiency- PoW are less energy-efficient and more expensive to set up their operationsPoS is more energy-efficient and less expensive to set up its operations
4) Equipment- Specialized equipment is required before you can profitably mine.No specialized equipment is required. A standard computer can get the job done.
5) Hack- To compromise the system, a hacker would need to control 51% of all computing power.To compromise the system, a hacker would need to hold 51% of all cryptocurrency in that blockchain.

Proof of Work Vs. Proof of Stake: Conclusion

Proof of Work Vs. Proof of Stake
Proof of Work Vs. Proof of Stake

The consensus mechanism is very important to the blockchain network because it reduces the centralization of those in charge of confirming transactions. To keep a blockchain network firm and trusted requires a completely functioning consensus mechanism.

Proof-of-work is required for fraud prevention, security, and trust-building in a network. it is a method of securing a crypto asset’s transaction history from bad actors who continually seek successful ways to exploit the system.

Meanwhile, proof-of-stake network performance and security are important values of using a PoS-based mechanism. PoS is employed when high transaction speed is required for transactions per second and precise network transfer. Also, participants own significant amounts of the network coin, which financially encourages them to keep the chain secure.

On the downside, both consensus mechanisms can, in some ways, be exposed to the 51% attack.

I hope you found this Proof of Work Vs. Proof of Stake post valuable, if you have any questions, write them in the comment box below, and I will do my best to reply to them.

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