Learning about the Blockchain: Proof of Work vs. Proof of Stake

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Proof of What??

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I’m pretty sure many of you Steemians have run into a situation where you would have to explain to someone from the general public on cryptocurrency or blockchain, whether it be a random pedestrian, your teacher, your brother, or your grandma. I’m also pretty sure the conversation has also been led to the latter saying something along the lines of “What you mean? Oh you mean like BitCoin? What’s the point of that?” There is an air of stubbornness that surrounds people, where it can lead to relatively polarizing conversations, which can more or less lead them nowhere. In order to help facilitate discussion to get people to get blockchains and how they work.

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First of all, mining is the process validating a block or transaction in a network by the process of complicated algorithms to validate and prove the truth of the transaction and add a new block to the chain. For one to mine these coins, one would require a computer with a high power processor, that is running continuously utilizing these complex mining algorithms. The processor essentially tries to solve a complex problem, where a higher powered processor has a higher chance of validating the transaction, thus earning a fraction of a coin as a reward.

Proof of Work

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Proof of work is a piece of information that is complicated in order to produce a satisfaction of particular conditions. The point of this algorithm is to verify if calculations were indeed made during the creation of a new block of cryptocurrency. The mining process is an operation of inverse hashing, where it finds a number, and the cryptographic hash algorithm of block data findings in less than a given threshold from a technical point of view. This threshold determines how hard the mining competition is, getting easier with a higher computing power.

Proof of Stake

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Proof of stake is a way of securing a cryptocurrency system through asking the users to prove ownership of a certain amount of cryptocurrency. It contrasts from a proof of work system, where they constantly run algorithms to confirm electronic transactions. For proof of stake, the miners are called validators instead, where the blockchain keeps track of a set of validators, and anyone who holds the blockchain's base cryptocurrency can also become a validator by sending a special kind of trade that locks their cryptocurrency into a deposit.

In comparison to the Proof of Work, a Proof of Stake does not use as much energy as mining, and the cryptocurrency made will own the coins, which will lead to more loyal validators.