PoW vs PoS: how consensus works in blockchain?
After we understood what consensus is, it's time to move on to the two most popular algorithms:
1. Proof of Work (PoW)
Essence: miners compete to solve a complex problem to add a block.
Security: high, as an attack requires enormous computational power.
Cons:
-Energy-intensive
-Slow (Bitcoin - 7 transactions/sec)
Examples: Bitcoin, early Ethereum
2. Proof of Stake (PoS)
Essence: a block is created by a validator chosen among those who hold coins (stake).
Advantages:
-Energy saving
-Higher speed and scalability
Cons:
-The problem of 'the rich get richer'
-More complex security logic
Examples: Ethereum (after The Merge), Cardano, Solana
Conclusion
PoW is reliable but expensive. PoS is more eco-friendly and faster but requires well-thought-out security architecture. Both algorithms solve one problem - ensuring the honesty of participants without central authority.