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Proof of Work

Proof of Work is a consensus mechanism usually associated with the mining of coins; the coins are usually "Ethereum and bitcoin". It can generally be described as a system where miners with high computing capacity come together to solve mathematical puzzles to be able to create new blocks.

It usually involves so many miners working to solve blocks at the same time. A particular transaction cannot happen twice; even if two of the same transaction were initiated at the same time, the one that got executed first will be the only one on record.

Proof of Stake

Proof of stake is a consensus mechanism where people don't necessarily need to solve mathematical puzzles in other to get rewarded, rather they rely on the influence they have on the blockchain by virtue of their investment to gain more profit. Coins in a blockchain are mined based on the volume of the initial investment. If for instance, a person has 7% of the coins in a blockchain, then this gives them the leverage to mine up to 7% of every completed transaction.

Difference between PoW and PoS

Proof of Work implies that everybody involved must be ready to solve some mathematical puzzles to be able to gain coins whereas in proof of stake people get coins as a result of the weight of their stake in the blockchain.

Proof of Work requires the selection and contribution of random people that have the computing power to solve problems whereas Proof of Stake selects miners based on the percentage of coins they have in their possession.

Advantages of PoW

1. Proof of Work rewards people for working hard to solve problems

2. People who don't have any initial capital can gain from PoS

3. It grows a blockchain faster

Disadvantages of PoW

1. Miners get little rewards despite all the time, effort, and resources they put into mining.

2. Mining consumes so much energy

3. Mining takes more time

Advantages of PoS

1. Miners get rewarded handsomely for their investment in the blockchain

2. Mining is faster in PoS than other consensus mechanisms

3. It can not be invaded by malicious users because it would be too expensive

4. It is not energy-intensive

Disadvantages of PoS

1. Majority of the profit from the coins goes to only a few people in the blockchain

2. It gives excess power and authority to a few people

3. For you to be sure of profit, you must possess a large percentage of the coin in the blockchain

In scaling capacity, I think that PoS will be much better. Come to think of it, people don't need to spend so much on energy in the future. Energy is expensive and most countries in the world are investing heavily in green energy, so a cut in the use of energy would have a substantial impact.

A project that wants to use the PoS consensus mechanism in the future is Ethereum 2.0 and I think it will be a huge success when it is launched.

Conclusion

Consensus mechanisms are effectively the pillars supporting blockchain and crypto today. The importance of consensus mechanisms simply cannot be overemphasized.

Assignment

1. Describe a consensus mechanism.
2. Differentiate between two consensus mechanisms
3. Givde the advantages of one over the other.

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