Different types of Consensus Mechanisms - Steemit Crypto Academy Season 5 - Homework Post for Task 3
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(1) What is the difference between PoW & PoS? Advantages & Disadvantages? Which one is better in scaling Capacity? Examples?
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(2) What is the difference between PoS & DPoS? Advantages & Disadvantages? Name a few Blockchain projects which use the DPoS consensus mechanism and indicate the scaling capacity?
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(3) Name a few Blockchain projects which use dBFT in combination with other consensus mechanisms? Indicate the scaling capacity? Explain dBFT along with the pros and cons?
Hello steemians, it's quite a new week on the Steemit Crypto Academy Contest and it is a privilege to participate on this platform. After reading through the lecture, I found out that this was an interesting lecture as presented by prof @sapwood. To this, I will be responding to the task given.
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Proof of Work (PoW) is a type of consensus mechanism which involves some mathematical calculations otherwise known as cryptographic puzzles to get rewarded if successful. It is the process of mining through cryptographic puzzles. When a miner is able to solve the cryptographic puzzle, it is then that the transaction is verified, validated, and recorded as a new block.
As we all know that consensus is a type of agreement between two bodies, so, in this type of consensus mechanism, a miner shows proof of his/her work by solving mathematical calculations and thus gets rewarded if he/she successfully succeed in the calculations. This is what helps the miner to build a new block if validated. Examples of blockchain using this type of consensus mechanism include Bitcoin, Ethereum, Litecoin, etc.
Proof of Stake (PoS) is a type of consensus mechanism that involves a miner getting rewards through the amount of coin staked. In this type of consensus mechanism, the rewards of a user are tied to the number of coins staked. If a user stakes more coins, that is when the user will receive more reward but if the user stakes a small number of coins, that is when the user will receive a low amount of reward. The more coins staked enables the user to be able to mint a new block. Examples of blockchain using this type of consensus mechanism include Peercoin, Tron, Binance coin, etc.
| PoW | PoS |
|---|---|
| Rewards are gotten from solving cryptographic puzzles | Rewards are gotten from staking coins |
| It requires expensive equipment and software to be able to solve puzzles | It requires no expensive equipment |
| It consumes more time and energy before one transaction can be updated on the block | It requires less time for transaction validation and updates |
| The Bitcoin blockchain first used the consensus mechanism | The Peercoin blockchain first used the consensus mechanism |
- PoW mechanism which works on decentralized system makes it safe and secure for blockchains using it as well as security of this blockchains
- PoW is a trustworthy mechanism since it is a decentralized protocol
- PoW helps in the creation of new blocks when a cryptographic puzzle has been successfully validated
- PoW is prone or vulnerable to hacking
- PoW is expensive since it requires high rated computing equipment and systems for the cryptographic puzzles
- PoW consumes much time before a transaction is validated and a new block is created since it involves the solving of cryptographic puzzles and thus consumes more energy
- It consumes less time and energy since it does not require solving cryptographic puzzles
- It is less expensive since it does not need high-tech computing systems for solving cryptographic puzzles
- PoS consensus mechanism has a high transaction speed as compared to PoW
- It is vulnerable to a high risk of hacking since it is centralized
- It is expensive since its rewards depend on the amount of coin staked
- PoS makes users who stake a lesser amount of coin feel neglected by whales
When talking about scaling capacity, this means the ability of a blockchain or network to be scalable (i.e. being able to function properly when slight changes have been made on the blockchain or network).
In my opinion, I will say Proof of Stake is better in scaling capacity because even with the rate of transactions carried out on it, its scalability is high. From views, Proof of Work is known to have problems with scalability, so with this, PoS is better off in scaling capacity, because it still functions properly even when changes are made on the network.