What is the difference between PoS and PoW?

Proof of Stake (POS) uses randomly selected miners to validate transactions. Proof of Work (POW) uses a competitive validation method to confirm transactions and add new blocks to the blockchain.

Proof of burn is an intended alternate replacement for proof of stake and proof of work while achieving distributed consensus . Proof of work is based on recursive hashing to find a nonce and its implied cost is mainly time, equipment and electricity used while hashing recursively.

Advantages of PoS Much of the impetus for PoS is avoiding the tremendous amount of energy PoW demands while preserving the same level and some say even higher level of security offered by PoW which intelligently designed incentive mechanisms could produce. 2) Flexible design.

Proof of stake requires participants to put cryptocurrency as collateral for the opportunity to successfully approve transactions. Proof of work is more secure than proof of stake, but it’s slower and consumes more energy . Visit Personal Finance Insider for more stories.