WHAT IS THE DIFFERENCE BETWEEN PROOF OF WORK AND PROOF OF STAKE?
Published: 2023-01-07 13:08:31

**Proof of Work (PoW)** and **Proof of Stake (PoS)** are both **consensus mechanisms** that help keep the blockchain secure and add new transactions on the blockchain.  

A **consensus mechanism** is a way in which the nodes agree on the authenticity of transactions that have been recorded in the blockchain.  

**Proof of Work (PoW)**: this is a consensus mechanism whereby nodes (computers) compete to be the first to solve a complex computational problem (try to guess the “hash” number) for them to come up with new blocks and add them on the blockchain. The miner who comes up with the block is then awarded with new coins. Check out my blog on Mining (PoW) [here](https://dev.to/stephenkimoi/what-is-mining-in-blockchain-47mm).

**Proof of Stake (PoS)**: this is a consensus mechanism whereby a node ‘stakes’ a certain amount of the native cryptocurrency for them to validate transactions and create new blocks. This crypto that they’ve staked acts as collateral for them to participate as validators. The chances of a node being selected as a validator depend on the amount they’ve staked. Once the validator is choosen to come up with the new block, they are awarded a portion of the gas fees (transaction fees).  

The purpose of introducing proof of stake was to combat environmental challenges that were being caused by Proof of Work.  

**The differences between proof of work and proof of stake are:**

1. _In PoS the block creators are known as validators_: they check the transactions, verify the activity, vote on outcomes and maintain records. 
2. _In PoW the block creators are known as miners_: the miners work to solve for the “hash”, then they are awarded with a coin. 
3. In PoS for you to become a validator, you _only need to own enough tokens or coins to stake_. The use of stake promotes:  
I) Decentralization: this is because validators are chosen according to their stake in the network rather than computational power. It ensures decentralization since you do not need high computational power to participate as a validator.  
II) Security: since the validators have a financial stake in the network, they will act in the best interests of the network. 
 
4. In PoW _for you to become a miner, you must invest in equipment and energy to power the computers solving the computations_.  This makes PoW less accessible to individual users and more dominated by large mining pools with access to economies of scale.  

5. _PoS systems are more energy efficient as compared to PoW_, this is because you need less computational power as compared to PoW systems.  

One of the downsides of PoS is that an entity or a group of people can decide to acquire a significant portion of total stake in the network, thus causing some form of “centralization”. Which can enable them to have a level of influence on the network, as they will have a greater probability of being chosen as validators therefore having more opportunity to earn rewards.  

However, there are mechanisms that are in place to prevent validators from acting maliciously against the best interest of the network e.g slashing.  
**Slashing** is a mechanism where validators who might have violated the rules of the network have a portion of their stake confiscated. 

Thread version of this article can be found at: 
<blockquote class="twitter-tweet"><p lang="en" dir="ltr">WHAT IS THE DIFFERENCE BETWEEN PROOF OF WORK AND PROOF OF STAKE?<br><br>The terms Proof of Work(PoW) and Proof of Stake(PoS) tend to be confusing a times if you are new in the blockchain ecosystem. <br><br>What do they mean in simple definitions and what are their differences? Let’s see <a href="https://t.co/MC4emtspqC">pic.twitter.com/MC4emtspqC</a></p>&mdash; steve.eth (@stevekimoi) <a href="https://twitter.com/stevekimoi/status/1611712253266370562?ref_src=twsrc%5Etfw">January 7, 2023</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>

Thank you. Don't forget to check the rest of my [blogs](https://dev.to/stephenkimoi) if you'd like to learn more about blockchain and web3!

Cover image by [bitpay](https://bitpay.com/)