Proof-of-Work (PoW) vs Proof-of-Stake (PoS)

• Proof-of-Work (PoW) is a mechanism Bitcoin uses to regulate the creation of blocks and the state of the blockchain.
• Proof-of-Stake (PoS) is an alternative consensus mechanism which delegates control of the network to owners of the token.
• Proof-of-Stake is presented as an improvement over Proof-of-Work because it does not require hardware or energy consumption.
• Proof-of-Stake has a stronger tendency to centralize and concentrate token ownership to large holders. Its security guarantees are therefore weaker than Proof-of-Work.

What Is Proof-of-Work?

Proof-of-Work (PoW) is a mechanism Bitcoin uses to regulate the creation of blocks and the state of the blockchain. Proof-of-Work provides an objective way for all members of the Bitcoin network to agree on the state of the blockchain and all Bitcoin transactions.

Proof-of-Work forces miners to make trillions of numerical guesses in order to produce a valid block, and thanks to the difficulty adjustment, miners collectively find one block every 10 minutes on average.

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