Cryptocurrency: Proof of Work vs Proof of Stake (PoW vs PoS) PROS vs CONS - Quick Read
Proof of Work vs Proof of Stake coins
Proof of Work:
Proof of work is a protocol that has the goal of deterring cyber-attacks like distributed denial-of-service attack (DDoS) which has a purpose of exhausting the resources of a computer system by sending multiple fake requests.
Users on a coin or token's network basically "mine" in hopes of getting a reward or a share of a reward from a reward pool
Mining – is a process of validating a transaction or block in a network by the process of complex algorithms to prove and validate the correctness of the transaction and thereby add the new block to the chain.
Mining has two purposes:
1. To verify the legitimacy of a transaction, or avoiding the so-called double-spending
2. To create new digital currencies by rewarding miners for performing the previous task
Common PoW coins: Bitcoin, Litecoin, ZCash, Monero, Vertcoin
Proof of Stake:
Proof of Stake (PoS) is an alternate way of verifying and validating the transaction or a block. This will pick the Validator (Equivalent of “miner” in the PoW) by the amount of stake(coins) a validator has and the respective age of the stake.
Most of the time almost everyone can participate in Proof of Stake gains as it does not increase based on computing power but instead focuses on the amount of stake like the name says that the user has in the coin. The greater the stake the bigger your profit.
There are many coins looking to convert over to a Proof of Stake system as it is much more centralized and energy efficient in the long run and very enticing to new investors with a newer concept.
Common PoS coins: Neo, Navvcoin, Reddcoin, PivX, Dash
Both system has its pros and cons and they will definitely stay in the short run at least until one takes over or another new one takes place. One is more energy efficient(PoS) while one is slightly more profitable to investors(PoW). As new coins and tokens are introduced there have been even a hybrid and different variations of the two and I can't wait for what 2018 has for us in store! Overall, it all depends on your own values, preferences and assets.