Proof-of-work & Proof-of-stake. Which One is Better!

If you are new to crypto it’s most likely that you would have already come across the words like consensus mechanism, proof-of-work, and proof-of-stake. However, what are these fancy words that sound so complicated? Well, they are the algorithms according to which the blockchain system operates. These mechanisms keep the blockchains secure by letting only genuine users add transactions. So let’s try to understand what these two techniques are all about.

What is Proof-of-work?

Proof-of-work was the most important consensus mechanism which was ideated in 1993 in order to combat spam and other service abuses. It received its official name as Proof-of-work in 1997. In this mechanism, the probability of receiving the reward is determined by measuring the work generated. The larger the output of the work, the greater the chances to receive the reward.

What is Proof-of-stake?

Proof of Stake is somewhat similar to depositing money in your bank accounts where interest is generated on the basis of the duration and amount it is being held. This system replaces the work a miner does in PoW with the amount “staked” by the user. In the proof-of-stake mechanism, the size of the stake decides the chances for a validator to be chosen to forge the new block.

Both the consensus mechanisms are equally effective. There isn’t really any big advantage/drawback of using one over the other. Ultimately the adoption of either one of these mechanisms depends on the usage and suitability of the user.

Read more: Proof of Work vs Proof of Stake | Pros & Cons of PoW and PoS