Cryptocurrency: Deeply immersed in promotion of stock package and proof of work consensus mechanisms **
The cryptocurrency world has exploded in recent years. Thousands of new chips and projects have emerged to meet the increasing demand for safe, decentralized financial systems. The essence of this revolution is the mechanism of consensus, which dictates how the operations are checked and added to the public book. Two important mechanisms of consensus, which have been paid great attention, are proof of shares (POS) and work (POW). In this article, we will use the basics of each mechanism, their advantages and disadvantages and investigate the consequences of the admission of cryptocurrencies.
Stake (POS) proof
The Gavin Wood was designed by consensus algorithm in 2014. There is a consensus algorithm. It is designed as efficient energy and is changed, making it an attractive option for large -scale installation, such as Ethereum.
How does PO work:
- Confirmation : Validal node checks blockchain operations.
2.
- Random choice
: Validal with the most attached coins randomly selected to participate in the next generation of the block.
- Inspection : The selected verifier checks the operations and adds them to Blockchain.
Benefits:
- Energy Efficiency : POS requires less energy compared to POW, making it a greener choice for large -scale installation.
2.
- Increased security : The random selection process makes it difficult for the attacker’s manipulation of “blockchain”.
Disadvantages:
- Centralized control
: Validators bets are often controlled by a small group of large -scale investors, which can cause centralization and reduce decentralization.
2.
Proof of work (POW)
Proof of work is another dominant algorithm of consensus. Created Nakamoto. It is widely used for Bitcoin and other cryptocurrencies such as Ethereum.
How does POW work:
- mining : Validal node solves complex mathematical puzzles that confirm operations and create new blocks.
2.
- Inspection : Validators check the operations and add them to Blockchain.
Benefits:
1
- Scaling : POW can control the larger volume of operations due to the faster block development time.
- Increased security : The random selection process makes it difficult for the attacker’s manipulation of “blockchain”.
Disadvantages:
1
- Centralized control : Miners dominance can cause centralization and reduce decentralization in the net.
3.
Comparison and effects
In conclusion, both POS and POW consensus mechanisms have their strengths and weaknesses. Although POS is more efficient and replaced, it can be centralized by a small group of investors. On the other hand, POW requires high calculation power, but is faster and more efficient for energy.