🆚Proof of Stake vs Proof of Work

Proof of Work

Proof of Work (PoW) is a distributed consensus mechanism first used by Bitcoin and the most widespread to date.

In PoW, miners are subjected to a 'proof of work': solving cryptographic puzzles to validate a block, thus adding it to the blockchain. The miners are rewarded in a directly proportional way based on the computing power provided. Cryptocurrencies use this mechanism to prevent users from duplicating and altering transactions.

One of the greatest advantages of the PoW concerns security, in fact it is unlikely that a hacker will attack the network as it would be a type of attack that should be supported by a computing power greater than 50% of the total used worldwide to mining. However, this type of distributed consent is very polluting for the environment due to the enormous amount of electricity that is consumed for the creation of new blocks.

Proof of Stake

Proof of Stake (PoS) was born as an alternative to Proof of Work (PoW) and is the consensus mechanism used by BYT.

Unlike Proof of Work, where miners are rewarded based on the computing power offered, in (PoS) validators must stake their coins. Proof of Stake is an innovative model in the world of cryptocurrencies where anyone can become a validator, however it is the size of the stake that determines the possibility that a node is selected as a validator. Two of the most used methods for determining validators are: Randomized Block Selection and Coin Age Selection.

The advantages of the Proof of Stake are mainly energetic, as the cost of participation is based on staking rather than on the computing power of the miners. A study done in 2021 by the University of London showed that the energy consumption of Bitcoin (based on proof-of-work) was about a thousand times higher than that of the proof-of-stake system. The proof of stake also guarantees greater scalability, higher transaction speeds and has a greater level of decentralization, as participating more users decreases the possibility of a 51% Attack.