Proof of Work vs. Proof of Stake: Will Only One Survive? However, in recent years, some blockchains have begun to attempt to switch between systems – for example, Ethereum, which plans to completely switch to the Proof of Stake (PoS) principle by 2022, which should contribute to the scalability of the project. And new blockchains generally use PoS, its variants or updates.
By comparing the principles of proof of work (PoW) and proof of stake (PoS), we will try to preict the future and determine the prospects that open up for them in the coming years.
Direct Comparison: PoW vs. PoS
To help you better understand the differences between the two methods, I’ll look at them from different angles, in terms of consistency, energy consumption, participants, and reward distribution systems.
Blockchain Sequence
Blockchain is a chain of blocks consisting of transactions. The first block is calle the genesis block, and the following blocks are built after it. Each subsequent block is linke to the previous ones, which makes re-spending of previously spent “digital coins” unlikely.
Consistency in PoW
By competing to add the next block to the chain, miners who prefer PoW-base crypto-blockchains (Bitcoin, for example) use hardware with significant computing power and consume energy resources.
There is a so-calle “longest chain rule” where there is no certainty that the last block adde will be the last one in the chain. There is a chance that another miner will add two consecutive blocks faster than competitors and invalidate the previous block. In this case, one chain becomes longer than the previous one. Therefore, Bitcoin miners nee to wait for at least six transaction confirmations (or six blocks adde) to make the transaction final.
Serious consideration. Organization xerox copier. Fax list* for sending records. Clinical Center Area. HIM Fax Number. AberdeenOregon Crucial fax lists Records FAX Numbers. ) District. Fax No. UF Wellbeing Doctors Reference Telephone Rundown. Gainesville area and fax number. Addiction Medication – Florida Recovery Center Entering Beneficiary Rundown. You can enter fax beneficiary data in the beneficiary.
Sequence in PoS
The PoS method, which is one of the closest alternatives to PoW, sorts blocks one by one in chronological order, but it does not involve odoo spain is a digitizing agent any physical effort or energy-intensive processes. There is also no competition between validators, or, in other words, “auditor” participants.
In PoS, generating one block takes not 10 minutes, as in the case of Bitcoin, but one or two seconds.
Energy consumption
When Satoshi Nakamoto create Bitcoin, he could hardly have imagine the scale of his creation and how energy-intensive the processes mailing lead associate with it would be.
There are now a huge number of industrial mining “farms” scattere around the world, run by ASIC miners motivate to get rewarde in bitcoins, using hash functions. It can be said that individual mining on a personal computer is a thing of the past.
Power consumption in PoW
This is where the main difference between PoW and PoS protocols lies.
In search of a special random one-time number (English nonce), miners solve complex mathematical functions (a process calle hashing) to earn the right to create a new block and add it to the chain. Winning this race requires hundres and thousands of specialize ASIC hardware, which, in turn, requires monstrous energy costs.
Currently, the energy consumption of Bitcoin mining alone is comparable to that of a meium-size country (e.g. Norway or Argentina). If Bitcoin were a country, its energy consumption would be in the world’s top 30! According to researchers at the University of Cambridge, BTC’s annual energy consumption is approximately 121 terawatt hours (TWh).
However, I wouldn’t call this a pointless “sacrifice,” but rather a technology to protect the cryptocurrency blockchain itself. According to another Cambridge paper , 39% of the energy use to hash comes from renewable sources, which is supporte by software developments le by the Crypto Climate Accord initiative . Yes, Bitcoin still requires a lot of energy, but wind and solar power plants can generate it.
Power consumption for PoS
In PoS networks, there is no competition for the proposal of a new block base on energy consumption. However, PoS miners still nee to constantly maintain their computers and provide Internet access, which also requires some costs.
Since PoS blockchains require much less energy, it is cheaper to run the network. But pool operators and validators can still benefit, as the throughput of the number of transactions is much higher, and even with lower transaction fees, those running the network are still rewarde. As of today, there do not seem to be any alternatives to PoS in terms of stability.
Participation in PoW
In order to participate in the PoW network, a user will have to purchase very expensive mining equipment. The larger the investment, the higher the chance of creating a new block. This will be an advantage for players who already use their mining machines, or even for those who have access to new technologies and update versions of ASICs or GPUs use for mining in PoW networks.
The condition for participation for staking pools or validators in PoS networks is to own a certain amount (shares) of tokens and hold them for a certain period of time. Validators risk losing their stake if any malicious techniques are use, such as double-spending or coordinate attacks on the network.
