Proof-of-stake vs. Proof-of-work

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20 Sept 2022
33
What is Proof-of-work?

Proof-of-work was first proposed in 1993 to combat network spam and denial-of-service attacks. Satoshi Nakamoto popularized the PoW concept in 2008 to validate new blocks in the Bitcoin network.

Proof of work (PoW) is a method of adding new blocks of transactions to a cryptocurrency's blockchain. In this scenario, the task consists of creating a hash (a long string of characters) that matches the desired hash for the current block.

What is Proof-of-stake?

Proof-of-stake is a cryptocurrency consensus mechanism used to process transactions and add new blocks to a blockchain. A consensus mechanism is a way of validating and securing entries in a distributed database.

Difference between Proof-of-stake and. Proof-of-work
Proof of Stake (POS) validates transactions by selecting miners at random. Proof of Work (POW) confirms transactions and adds new blocks to the blockchain by using a competitive validation technique.

References

[1] Motley Fool, 'What Is Proof of Work (PoW) in Crypto?' (online, 2022) <https://www.fool.com/investing/stock-market/market-sectors/financials/cryptocurrency-stocks/proof-of-work/>

[2] Investopedia, 'Proof of Stake (PoS)' (online, 2022) <https://www.investopedia.com/terms/p/proof-stake-pos.asp>






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