Greetings :

Hey, myself Hammad Aslam. my user id is @hammadahmed112. today, I read the article which is given by prof. @sapwood. so, let's started:

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What is the difference between PoW & PoS? Advantages & Disadvantages? Which one is better in scaling Capacity? Examples?

What is proof of Work?

Proof of Work is the Consensus algorithm it was first developed in 1993. the reason for using this algorithm is to prevent denial of service attacks. basically, this is the motto behind it. but in early 2009, the founder of bitcoin Satoshi Nakamoto introduced his first blockchain network on this consensus algorithm. the function of this bitcoin blockchain is to validate the transactions between the nodes and broadcast them to a new block. this new block is created by solving typical types of puzzles. this blockchain network did its work very successfully, after its successful work many types of other blockchains are also used this consensus algorithm widely.

The working of Pow is very simple miner solves the typical type of puzzle by applying the consensus. after solving the puzzle a new block is created this new block is added to your reward pool.

What is proof of stake?

Proof of stake is also a consensus algorithm but it is slightly different from the Proof of work. the first idea of POS is represented by the Bitcoin forum in 2011. POS is done the verification of any blockchain network of a blockchain network. but differently, In POS the new block can't mine it mint the new block. the new block is generated completely randomly. this randomness is based on the amount you invest. let's discuss the example:

Suppose, a person whose name is TOM. has a $100 investment in a POS-based network. and the second person whose name is Ibrahim has an investment of $1000. the POS algorithm more prefers Ibrahim to give a new block. because of its high amount of investment. this is how POS work.

What is the difference between PoW & PoS?

Both of these are consensus algorithm. the working of these algorithms is almost the same but few changes in POS. let's discuss the major difference between them:

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Proof of Work:

Defination: In proof of work miner mines the token in the blockchain network and the network verify the transaction and gives the reward to the node.

Increase In Supply: Proof of work algorithm increases the supply of the token in the blockchain.

Power Consumption: Proof of work consumes the high amount of electricity. this high amount of electricity is very dangerous to our ecosystem.

Hardware Dependency: POW totally, based on hardware the reason was that in POS the mining of token takes place. as we all know that the mining consumes hardware.

Efficiency: POW algoritum is bit slower than the POS.

Cost Effective: POW is much cost-effective because of hardware need. and hardware consumes too much electricity.

Proof of Stake:

Defination: In POS algorithm miners cannot mine the token of respective blockchain. instead, they mint the token of blockchain.

Increase In Supply: POS algorithm cannot increase the supply of blockchain rather than it stakes the tokens in the pool. which is very helpful because demand and supply should be balanced.

Power Consumption: Proof of Stake consumes less power as compare to the Proof of work the reason was that it mint the token not mine the token.

Hardware Dependency: Proof of Stake depends on the amount of staking and this staking is made by the validator. this is how less hardware requirement.

Efficiency: In terms of efficiency the proof of stake is much efficient than the proof of work.

Cost Effective: it is less cost-effective as compared to proof of work because the hardware and the electricity cost is not own any single person it distributed the overall network.

Advantages & Disadvantages?

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Advantages of Proof of Work:

1. Securable BlockchainThe very first advantage of the Proof of work is it is very securable. it protects the blockchain network. nobody can easily hack it.

2.Solving Complex Puzzle The second advantage of the proof of work is it solves the very difficult type of complex puzzle. after, solving this complex puzzle it creates the new block and is added into the pool.

3. High Hash Rate: The third advantage of proof of work is that if you have a higher hash rate power you can mine new blocks more rapidly as much you want

Disadvantages of Proof of Work:

1.Computing Power: The proof of work algorithm consumes a very high amount of computing power to create a new block.

2.Electricity Consumption: It consumes a high amount of electricity and in some countries, the electricity is too much expensive. In mining, the high amount of electricity shows the greater hash rate. if the hash rate is higher so, it means the speed of solving puzzles is too high.

3. High Amount of fee: In proof of work a high amount of transaction fee is required this fee is the gas fee and sometimes it is very high.

Effect On supply: The proof of work algorithm increases the supply of tokens. as we all know the supply and demand are inversely proportional to each other. if the supply increases the demand would be decreased.

Advantages of Proof of Stake:

1. Less computing power: Proof of stake algorithm consumes less computing power and this is the major advantage of POS.

2. Centralization: Proof of stake decreases the risk of centralization due to this effect people take more interest in it.

3. Transaction Speed: Proof of stake having a high transaction speed. and low cost-effective.

Disadvantages of Proof of Stake:

1. Cost: POS algorithm is based on the amount of investment you have means stalking the high amount of investment means the high amount of return.

2.Reward: The Reward ratio is very low in POS. as I already mentioned in the first disadvantage of POS the higher the amount gives the higher reward.

3.Staking: Staking required a specific time period. if you want to sell your token they didn't allow you because in POS you have a specific time period to withdraw your tokens.

Which one is better in scaling Capacity? Examples ?

Basically, the scaling is the capacity of transactions required per minute in the blockchain. scaling promotes the block if the number of transactions increases so, it would provide less time to transfer the tokens.

In my view, I think Proof of Stake having a better scaling capacity because it reduces the risk of centralization. the second reason that's why I prefer more the Proof of stake is that the speed of transaction because it really depends. so, I think the POS has a better scaling capacity.

Examples?

Some or the most of blockchain adopt the POS rather then the POW. POS having a great potential and it avoids the all issues which will be facing the POW. some of the examples of POS blockchain networks are as follows:

Neo:

Neo is the new blockchain that uses the POS and runs in your own blockchain. the token name of this blockchain is neo. the purpose of creating this token in POS is to overcome the issue that faces the bitcoin and some other tokens because the proof of work having some transactions issues and also having some network issues. this token having great potential because the rate of the token is $38.70. and supply of this token is 70,538,831.00. this minimal supply indicates the demand of this token.

Cardano:

Cardano is another blockchain that adopts the POS-based blockchain network. the token of this blockchain is currently ranked at number 3. this rank indicates the trust of the people on this blockchain. the token name is Ada and the all-time high of this token is 3.1. but currently, the token price is 2.1.

Many, other coins also follow a POS algorithm.

Conclusion:

In the end, I must say that today, the lecture is very fruitful for me because I love to learn the new algorithm. so, I am very thankful to prof. @sapwood. that provides the new lectures to all of us.


Thank you to reading my post.

Regards:

@hammadahmed112