Proof of Work Vs Proof of Stake in Blockchain

Proof of Work Vs Proof of Stake in Blockchain

Everyone must have heard of mining in the context of the blockchain. In layman terms, mining is the work carried out to either generate a new block on blockchain network or to validate the transaction on the blockchain. Essentially mining in the context of blockchain involves execution of different computer algorithms for the purpose just stated above. These are the algorithms used to reach consensus on blockchain network to create a unique block of transactions. 

In this article, we will see side by side differences between proof of work and proof of stake algorithms.

Sr. No.
 Proof of Work
 Proof of Stake
A system whereby the probability of mining a block is based on how much work is done
A system where mining is allowed based on how many coins put at stake on given blockchain network
Requires a lot of electricity to run mining hardware.
Proof-of-stake is very energy efficient as compared to proof-of-work
Good amount of investment is required for mining hardware
proof-of-stake is lite on hardware
It is expensive to attack blockchain network because of expensive math functions involved
Possible attack vectors need to have sufficient amount of tokens at stake to execute.
Incentives include block reward along with transaction fees
Incentive includes only transaction fees
Validations are very slow as compared to proof-of-stake
Faster validations are possible
"51% attack" vector is possible where a group of miners starts controlling blockchain network that affects hashrate and payments. 
"nothing at stake" attach vector is possible at an event of a fork in the blockchain where 1% of the stake would win mining on both chains resulted after the fork.
This causes double-spending problem
Implemented by Bitcoin, Ethereum and Litecoin
Implemented by Nxt, Peercoin, Blackcoin and Gridcoin

Are there any other distinct differences between Proof of Work Vs Proof of Stake? Notify everyone in comments below and will be updated with contributors name in above table.

picture courtesy: pixabay,pablo

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Mandar is a seasoned software professional for more than a decade. He is Cloud, AI, IoT, Blockchain and Fintech enthusiast. He writes to benefit others from his experiences. His overall goal is to help people learn about the Cloud, AI, IoT, Blockchain and Fintech and the effects they will have economically and socially in the future.

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