Proof-of-Work VS Proof-of-Stake: What's the Difference and Which is Better?

Proof-of-Work and Proof-of-Stake are the two main methods for verifying crypto transactions. These two methods have their respective advantages and disadvantages, and affect the security, speed and efficiency of crypto networks.

Well, this article will explain what Proof-of-Work and Proof-of-Stake are, how they work, and which one is better for you.

What is Proof-of-Work?

Proof-of-Work is a consensus mechanism first used by Bitcoin. Proof-of-Work requires users to mine or solve complex cryptographic puzzles before submitting new transactions to the network.

The goal of Proof-of-Work is to make the costs of fraud higher than the potential rewards of dishonest actions.

Proof-of-Work has several advantages, including:

• Proof-of-Work is very secure, as it is difficult to attack or change the network without having a lot of computing power.
• Proof-of-Work has stood the test of time, as Bitcoin has been operating well since 2009.
• Proof-of-Work incentivizes miners to contribute to the network, as they will earn block rewards and transaction fees.

Apa itu Proof-of-Stake?

Proof-of-Stake is a consensus mechanism developed as an alternative to Proof-of-Work. Proof-of-Stake randomly selects validators to verify new transactions based on the amount of crypto they own or stake on the network.

The goal of Proof-of-Stake is to reduce energy consumption and increase network scalability.

Proof-of-Stake has several advantages, including:

• Proof-of-Stake is more environmentally friendly, as it does not require as much energy and hardware to run the network.
• Proof-of-Stake is faster, because there is no need to wait for miners to solve the cryptographic puzzle.
• Proof-of-Stake is fairer, as there is no competition between users for block rewards.

Perbandingan Proof-of-Work dan Proof-of-Stake

Proof-of-Work and Proof-of-Stake have significant differences, both in terms of process, results and impact. The following are some comparisons between Proof-of-Work and Proof-of-Stake:

Security 

Proof-of-Work is considered more secure than Proof-of-Stake, as it is more difficult to carry out a 51% attack, which is when a person or group controls more than half of the network's computing power and can change or cancel transactions.

Proof-of-Stake is more vulnerable to 51% attacks, because a person or group can buy or borrow a lot of crypto and gain control of the network.

Speed

Proof-of-Stake is faster than Proof-of-Work, because there is no need to wait for miners to solve the cryptographic puzzle. Proof-of-Stake can process more transactions per second than Proof-of-Work. 

For example, Ethereum 2.0, which uses Proof-of-Stake, can process around 100,000 transactions per second, while Bitcoin, which uses Proof-of-Work, can only process around 7 transactions per second.

Efficiency

Proof-of-Stake is more efficient than Proof-of-Work, as it does not require as much energy and hardware to run the network. Proof-of-Work requires a lot of electricity and specialized equipment to mine crypto, which can have a negative impact on the environment and operational costs. For example, Bitcoin's energy consumption is equivalent to Argentina's energy consumption, while Ethereum 2.0's energy consumption is only about 0.01% of Ethereum's current energy consumption.

Examples of Cryptos That Use Proof-of-Work and Proof-of-Stake

There are many cryptocurrencies that use Proof-of-Work or Proof-of-Stake as their consensus mechanism. The following are some examples of cryptocurrencies that use Proof-of-Work and Proof-of-Stake:

• Proof-of-Work. Some cryptocurrencies that use Proof-of-Work are Bitcoin, Ethereum (before switching to Proof-of-Stake), Litecoin, Monero, and Zcash.
• Proof-of-Stake. Some cryptocurrencies that use Proof-of-Stake are Ethereum 2.0, Cardano, Polkadot, Binance Coin, and Tezos.

How to Choose a Crypto that Uses Proof-of-Work or Proof-of-Stake

Choosing a crypto that uses Proof-of-Work or Proof-of-Stake depends on your preferences and goals. The following are some tips that you can use to choose crypto that uses Proof-of-Work or Proof-of-Stake:

Determine priorities

Do you prioritize security, speed, or efficiency? Do you want to invest long term or short term? Do you want to participate in the network as a miner or validator?

Learn cryptos of interest

Once you have determined your priorities, you can search for and study the cryptos you are interested in, based on their consensus mechanisms, features, potential and risks. You can read whitepapers, reviews, news, and analysis about cryptocurrencies that interest you.

Try the selected crypto

Once you've chosen the crypto you want, you can try it out by buying, selling, or exchanging it on a platform you trust. You can also try becoming a miner or validator if you want to contribute to the network.

Conclusion

Proof-of-Work and Proof-of-Stake are the two main methods for verifying crypto transactions. Both of these methods have their respective advantages and disadvantages.

Both have an impact on the security, speed, and efficiency of crypto networks. You can choose crypto that uses Proof-of-Work or Proof-of-Stake according to your preferences and goals, taking into account the process, results and impact.

How To Buy Crypto With Bittime

You can buy and sell crypto assets in an easy and safe way via Bittime . Bittime is one of the best crypto applications in Indonesia which is officially registered with Bappbeti. 

To be able to buy crypto assets on Bittime , make sure you have registered and completed identity verification. Apart from that, also make sure that you have sufficient balance by depositing some funds into your wallet . For your information, the minimum purchase of assets on Bittime is IDR 10,000. After that, you can purchase crypto assets in the application. 

Monitor price chart movements of Bitcoin (BTC) , Ethereum (ETH), Solana (SOL) and other cryptos to find out today's crypto market trends in real-time on Bittime.

Read also:

What is Hybrid PoW/PoS? What are the advantages?

Understanding Proof of Validation

What is Distributed Consensus?

What Is Proof of Stake Authority (PoSA)?

DISCLAIMER: This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.