Different types of Consensus Mechanisms - Steemit Crypto Academy Season 4 - Homework Post for Task 6 by@jokkystar

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QUESTIONS


What is the difference between PoW & PoS? Advantages & Disadvantages? Which one is better in scaling Capacity? Examples?


First of all What is Proof of Stake?


Proof of Stake which is the short form of (PoS) is the additional vastly common consensus mechanism after Proof of Work which is the short form of (PoW) in terms of the market capitalization of the blockchain systems deploying it.

PoS appeared as a possibility to PoW, which is the aged alliance mechanism and was initially introduced with Bitcoin. Despite the initial success of Bitcoin, PoW couldn’t fulfill the desire for higher throughput, as later blockchains expected greater scalability [and rapid transaction rates].

Moreover, PoW networks finish up requiring tremendous percentages of energy for the computing ability used by miners.

The PoS algorithm was first inducted in 2011 on Bitcointalk. Peercoin was the primary to approve it in mixture with prisoner, however the agreement formula has quickly become additional standard altogether its variations.

Unlike PoW webs that depend on miners, PoS-powered blockchains are strengthened by validators. The validation method in PoS is called “forging.” If a projection aspires to partake in the block production procedure, it solely has to stake the native token. There is no need to consume electricity or bargain specialized hardware.

The laws of PoS networks alter from trial to trial, but the general notion is the same: nodes wanting to fulfill validators are expected to lock up the lowest percentage of tokens that act as collateral.

Next, validators have to agree on which trades must be expanded into the next block, like in a game of imagining. If their block is appointed by the policy, they get awarded from the transaction fees, and with recently invented tokens about the quantity of their chance.

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DIFFERENCES BETWEEN POW & POS?

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This mathematical puzzle has the main form asymmetry, the work must be tough for the miner to understand but simple for the network to review. All the network miners seek to be the first to find a solution through brute force that expects a large number of attempts as a reward for evaluating these transactions and they have expended.

However using the explanation above, we can underline the differences between them.

[POW] Proof of work needs projections in the network to accomplish an intricate mathematical puzzle also known as mining as a way of validating the legality of transactions on the network, this mathematical puzzle has the main form asymmetry, the work must be tough for the miner to understand but simple for the network to review. All the network miners seek to be the first to find a solution through brute force that expects a large number of attempts as a reward for evaluating these transactions and they have expended.

Cryptocurrency from the network, once examined the transactions are placed on the block and occur on the public blockchain. The problem of this puzzle improves proportionally to the amount of analyzing power in the network, i.e working on the puzzles, that is to say, the more miners they are, the tougher the network makes it to verify transactions and earn the reward. The active nature of the difficulty growth incentivizes miners to optimize their capacity to solve the puzzle and thus optimize their ability to assess transactions. This makes protecting the integrity of the network an active system with rewards for those that do it competently. To take over the network, one would have to govern 51% of the computing power of the network given how vast major blockchains are, which will be risky though not impossible.

Proof of work miners imposes a lot of energy to figure out their puzzles. Assessing one bitcoin transaction with proof of work needs the same quantity of electricity as 1.57 American households usage in a day.

Proof of stake system, there are no puzzles to finalize and there are no rewards for accomplishing it, rather, the miners take an achievement from each transaction. This also implies that because nobody is striving to solve every block. There's no large energy requirement. The penalty for attempting to harm the network is the chance of losing the money you've risked, which could skillfully be upwards of $10,000. To take over a proof of stake system, one would expect to own 51% of the commodity of the cryptocurrency on that chain. This would be a prohibitively valuable undertaking for any major network and it's less liable to happen than governing 51% of the computing energy, something that can be accomplished by mining.

proof of stake pushes the large energy requirement for the network in endorsement of financial penalty for guilty actors. Creators bothered about this energy difficulty, prefer to swap to the proof of stake technique or system for a greener and inexpensive form of unity.

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ADVANTAGES OF PROOF OF STAKE

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  • It reduces the outgrowth of high-powered computational hardware to create a unity algorithm.

  • Proof of stake is an eco-friendly crypto mining

  • It is very susceptible for a normal investor to partake and thus is a more decentralized mechanism.

  • The incentive and penalty system are n POS

  • Proof of stake doesn't need enormous investment.

  • It allows penalties for the guilty actor and disincentives them by decreasing their stake in the blockchain network.

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DISADVANTAGES OF PROOF OF STAKE

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  • Expanding penalties and rewards implies adding new variables in the algorithm and more testing.

  • A security drawback might occur if algorithms are not jotted down correctly.

  • It is fairly debatable as distinguished to Proof of work, and not many popular cryptosystems use it.

  • With the improvement in the network, security tends to become risker with increase tension.

The proof of stake method might begin to favor wealthy users occasionally.

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ADVANTAGES OF PROOF OF WORK

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  • In proof of work, we also have advantages in it, which I will list below.

  • The reasonable thing about proof of work is that the more the rate of cryptocurrency gains, that's the additional miners are expanding on the network, and also when miners are enlarging in numbers, it will make the network secure and safe and also offer it more energy.

  • when the energy is being utilized, it will be difficult for the bad guy to trick the blockchain.

  • In proof of work, to verify transactions, you don't need a politician.

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DISADVANTAGES OF PROOF OF WORK

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  • One of the disadvantages of proof of work is that it uses elevated energy to regulate.

  • It expends a lot of electricity too to protect the system.

  • Proof of work is very sluggish correlated to Proof of stake and at the same time consumes or expects high energy to regulate.

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WHICH ONE IS BETTER IN SCALING CAPACITY? EXAMPLE?

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Correlated to these two procedures in which one has an adequate scaling ability, as stated above, I will confess that proof of stake has more scaling capability than proof of stake. My reason is that In proof of stake, transactions are rapidly and it can carry out or enforce as many as feasible transactions within a second, to show how quickly it is. Miners are also changing positions from POW to POS.


Below are coins that are using the proof of stake system coins


COINSSITE
ARKLINK
KYBER[KNC]LINK
ICON[ICX]LINK
ZILLIQALINK
COSMOSLINK

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CONCLUSION

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Bitcoin has this prototype known to be Proof of work. Proof of work is a meritocratic lottery, so essentially, you have a miner and a miner is squatting there all day and its evaluating magic numbers looking for a specific number like a ticket to win. I precisely enjoy this task and for a nice and well comprehensive lecture, i really learnt a lot.

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Hello @jokkystar,

Thank you for participating in the #06 Fixed course for Newcomers in the Steemit Crypto Academy.

Your grade on this assignment is as follows:

CriteriaGrade
Presentation/Use of Markdowns0.5/2
Compliance with topic1.5/2
Quality of Analysis1/2
Clarity of Language1/2
#club50500/1
Originality0.5/1
Total5.5/10

Homework task: 5.5/10

Feedback and Suggestions :
  • Your effort in this task is appreciated.
  • You have provided a good explanation for the questions.
  • You need to improve the quality of posting by using proper markdowns. I noticed that your arrangement of the post should be developed.
  • Do more research and gather more information for the questions to avoid repetitions.

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