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Cryptocurrency Machinal Mechanisms: Understanding Proof of Work (POW) and Promotion Package (POS)
Cryptocurrencies such as Bitcoin, Ethereum and others are digital or virtual currencies using cryptography for security and decentralized control. In order to maintain the integrity of these cryptocurrencies, the mechanism of consensus is required to confirm the transactions and to ensure that all participants agree on the state of Blockchain.
In this article, we will use the two most common mechanisms of consensus used in cryptocurrency: proof of work (POW) and Stake (POS).
Proof of work (POW)
Proof of work is one of the earliest and most widely used consensus algorithms. It was first introduced by Satoshi Nakamoto in 2008. As a solution to difficulties in the Bitcoin mining process.
Here’s how POW work:
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- Confirmation : Validals (mining), who first solve the puzzle, have a greater opportunity to be selected to create new blocks that they later broadcast into the network.
- energy consumption : POW puzzle solution requires high calculation power, which can lead to high energy consumption and environmental deterioration.
Example: Bitcoin Mining
To show how POW work, let’s consider an example:
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- Get Award : Miner can create new operations blocks and broadcast them on the network.
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Stake (POS) proof
Proof to Stack is a consensus algorithm in 2014. Introduced Satoshi Nakamot as an alternative to POW. It is designed to make it more efficient and greener.
Here’s how to work:
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- Bets burn : Validals with larger bets have more opportunities to be selected to create new blocks that they later broadcast into the network.
- energy consumption : To create a new block POS requires less calculation power compared to POW.
Example: Ethereum gas approval
To show how POS work Ethereum, let’s consider the example:
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- Gas -based confirmation : Validor whose gas limit for new blocks can create a new block.
- energy consumption : To create a new block POS requires less calculation power compared to POW.
Conclusion
In conclusion, both work proof (POW) and Stake (POS) are widely used in the use of cryptocurrency agreement mechanisms. Although POW was the original solution that Provided the popularity of Satoshi Nakamoto, POS has become an alternative due to its potential energy efficiency and environmental sustainability.
However, it is very important to note that both algorithms have their own restrictions and vulnerabilities. For example, POW is vulnerable to ASIC (a specific program integrated chain) mining, while POS can be vulnerable to 51% of attacks if one entity controls more than half of the shares.