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Proof of Work vs Proof of Stake vs Other Protocols- Comparison


Many different technologies, algorithms, protocols consensus mechanisms or systems exist within the world of cryptocurrency blockchain network. Most common is Proof of work (PoW). In PoW  new coins are generated by using the process called mining. Another protocol Proof of stake (PoS) lets users earn rewards for keeping funds in their wallet for a longer period of time. Proof of Burn (PoB) is another but less common system in crypto world similar to PoS.  PoW uses energy, PoS uses coindays and PoB uses number of coins. And there are few others, let's discuss about them one by one.

1. PROOF OF WORK (POW) / Mining-

Proof of work is the most commonly used protocol. This is so popular mainly because of Bitcoin which uses PoW. It is the protocol that allows users to generate the cryptocurrency coins through mining. The only disadvantage of using PoW is that it is a resource hungry process. As a result miners are bound to use  more powerful or specific hardware like ASIC Miners to generate the coins through mining which results in more consumption of electricity and thus making the mining process very expensive. Mining difficulty is increasing day by day and it is gonna be more difficult in the future.

2. PROOF OF STAKE (POS) / Minting / Staking-

In Proof of stake people have to stake their coins for a certain period of time or certain no of days. In this system users of cryptocurrency have to keep their wallet open and connected to the Internet all the time and in return they earn staking rewards in the form of coins .  Duration of this process depends on various factors related to the specific currency.  Non-mineable cryptocurrencies generally use POS. In PoS-based cryptocurrencies the creator of the next block is chosen in a randm way which depends on it's stake or amount of currency. In PoS world the coins are usually said to be forged or minted where as in PoW based currencies the blocks are said to be mined. The main advantage of Proof of Stake currencies is that they can be several thousand times more cost effective as compared to proof of work currencies. The Proof-of-Stake algorithm requires little computation and energy, and can run on smartphones and small devices like the Raspberry Pi platform.

3. PROOF OF BURN (POB)-

Proof of Burn is a protocol helps to reduce the available supply of a specific cryptocurrency. In this system certain number of coins in circulation are sent to a wallet no one has access to. This is done to maintain the scarcity of coins in market. PoB transactions are also recorded on blockchain for proof. PoB Currencies are also minted.

4- SOME OTHER PROTOCOLS ALSO EXIST-

PROOF OF SPACE -  It's also known as proof of capacity. Proof of Space uses storage as a resource. It is one of the most energy efficient cryptocurrency protocol so far because least processing power is needed. 

PROOF OF ACTIVITY-  it is a hybrid system combining proof of work and proof of stake. 

PROOF OF DEPOSIT- It is almost same as proof of stake. In this user locks it's coins in his wallet for some particular length of time and gets paid a little reward for it.


Cheers..
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