Crypto Academy Season 4 Beginners' course - Task 6: Different types of Consensus Mechanisms @ochang

Hello fellow Steemians and welcome to my home work task submitted to Prof @sapwood. In this task 6, the Prof lectured on the different types of consensus mechanisms, without wasting much of your time let's dive into the business of the day.

Homework Task-6
(1) What is the difference between PoW & PoS? Advantages & Disadvantages? Which one is better in scaling Capacity? Examples?

This is a decentralized Consensus Mechanism that is used mostly in Crypto mining for mining of new Tokens and validation of transactions. It requires the members of a network to use effort to solve a mathematical puzzle to prevent external persons from gaining access to the system.

With the help of PoW, BTC and other Crypto transactions can be processed through Peer-to-Peer and in a secured manner without making use of any third party. PoW requires very high amount of energy which will only increase when more miners join the network.

PoS was created as an alternative for PoW. With the aid of PoS, Crypto miners can validate block transactions or mine based on the amount of Tokens a miner has. PoS is less risky in terms of the network being attack by the miners as it structures reward in a means that an attack by the miners less advantageous to the miner.

A miner mining with PoS is limited to mining a percentage of transactions that is a mirror of his/her ownership stake. Example a miner has 5% of the coins available can only mine 5% of the block.

S/N	PoW	PoS
1	To get started in PoW, it is compulsory to purchase both hardware and softwares as the case maybe be	To get started, registration and staking is enough in the PoS system.
2	PoW demand high energy consumption leading to not only increase in cost but also negative impact on the environment	PoS does not require such amount of high energy thereby making it more energy sufficient
3	In PoW it is very difficult and expensive to attack the Blockchain network	PoS are most times less secure and are influenced by low cost attacks.
4	In PoW, miners can sell rewards earned thereby increasing the market liquidity and solving other personal financial challenges	In PoS, users are encouraged to always hold and save rewards in other to have more influence in the Consensus process.
5	PoW is widespread, known and tested by a lot of miners	PoS is newer and still in it's early stage of adoption.

• Energy Consumption: The major disadvantage of PoW is that it consumes lots of energy when miners use computer and electricity for mining, While on the other hand, PoS consumes little energy as miners don't need to compete to earn blocks using electricity because the blocks are forged not mine.

• Security: PoW protect Blockchain first from being forked while on the other hand, though PoS is still new compared to PoW, PoS models are less secured and more likely to be influence by low cost attacks.

• Distribution: In PoW model, prices that are usually associated with verification has to do with the miners selling coins obtained as reward rather than keeping or saving them, these sold coins goes on to provide a balanced market liquidity. While in PoS, users are expected to accumulate/hold coins that they earn ( like Steemit SP) because users with large amount of coins usually have influence in the Consensus Process.

• Decentralization: PoW often results in a more decentralized network compared to PoS where users with large amount of coins can influence the network.

• Speed: PoS ensures more transactions per second up to 100,000 transactions can be processed per second using PoS compared to the 64 transactions per second processed by PoW.

With the advantages that PoS has over PoW ranging from lower energy Consumption, faster transaction time. It will be safe to say PoS is more scalable than PoW. PoS provides answ

Bitcoin and Ethereum are the top proof of work tokens by market capitalization, other examples include Dogecoin, Litecoin etc

Source

Cardano(ADA) and Algorand (ALGO) are the top proof of stake tokens by market capitalization also included in this are DASH, NEO, TEZOS

Source

Although PoS is still new and still in it's early adoption, I believe that with time because of its numerous advantages will overtake PoW.
I will really like to appreciate Prof @sapwood for this lecture as I have learnt a lot about PoS and PoW.