Proof of Work vs. Proof of Stake: Beginner's Guide!! 👨‍🏫

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Cryptocurrency Climate 👉 • FACT CHECK: Bitcoin Mi...
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Fastest Cryptocurrencies 👉 • FASTEST Cryptocurrenci...
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- TIMESTAMPS -
0:00 Intro
1:51 Cryptocurrency Consensus Explained
5:51 What Is Proof Of Work?
10:24 What Is Proof Of Stake?
13:42 PoW: Strengths & Weaknesses
16:32 PoS: Strengths & Weaknesses
21:05 Conclusion: Which Is Better?
~~~~~
⛓️ 🔗 Useful Links 🔗 ⛓️
► Proof Of Work Vs Proof Of Stake: www.coinbureau.com/analysis/p...
► Proof of Work Explained: academy.binance.com/en/articl...
► Proof of Stake Explained: academy.binance.com/en/articl...
► In Favor of Proof of Work: www.danheld.com/blog/2019/1/5...
► In Favor of Proof of Stake: vitalik.ca/general/2020/11/06...
► Proof Of Work Cryptocurrencies: cryptoslate.com/cryptos/proof...
► Proof of Stake Cryptocurrencies: cryptoslate.com/cryptos/proof...
~~~~~
👨‍🏫Cryptocurrency Consensus Explained👨‍🏫
Consensus in cryptocurrency follows the same idea as consensus between people. The difference is it’s computers coming to a consensus AKA an agreement about whether a transaction is valid or not. Usually, the consensus threshold in cryptocurrency is more than half, or 51%
⛏What is Proof of Work?⛏
Any computer that wants to process transactions on a proof of work cryptocurrency blockchain like Bitcoin needs to solve a complex equation to earn the right to do so. This costs time and energy to do
If this sounds tedious and arbitrary, it’s because it is. This idea of work exists exclusively as a means of protecting a cryptocurrency from manipulation by the computers connected to its blockchain
💰What is Proof of Stake?💰
Instead of using large amounts of computing power and energy to solve an equation to process transactions, a cryptocurrency coin is staked i.e. locked on the blockchain to earn the right to do so
The length of time a cryptocurrency must be staked to process transactions can vary, as can the minimum amount of coins or tokens a computer must lock up as stake
Logically, the more cryptocurrency you stake, the more likely you are to process transactions and create a block
⛓PoW: Advantages and Disadvantages⛓
In theory, anyone can connect their computer to a proof of work cryptocurrency to process transactions and earn cryptocurrency as a reward for doing so
However, over the years companies have developed specialized computers called application specific integrated circuit machines or ASICs for short. This is gradually centralizing PoW cryptocurrencies
What’s worse is that when a new and improved ASIC is released, the older model usually ends up in a landfill, and this is one of the many environmental concerns about proof of work cryptocurrency mining
💱PoS: Advantages and Disadvantages💱
In theory, anyone can connect their computer to a proof of work cryptocurrency to process transactions and earn cryptocurrency as a reward for doing so
This is facilitated by the minimal hardware and energy requirements to participate in most proof of stake cryptocurrency blockchains
However, most proof of stake cryptocurrency blockchains have high thresholds when it comes to the minimum stake you need to put down to connect to it as an independent computer
Moreover, most proof of stake cryptocurrencies had something called a premine which is where a bunch of coins or tokens are minted in advance and distributed to the team and large investors
Consequently, most proof of stake cryptocurrencies are more centralized than Bitcoin and Ethereum since the average user is stuck delegating to a validator or staking pool belonging to the team and VCs
~~~~~
📜 Disclaimer 📜
The information contained herein is for informational purposes only. Nothing herein shall be construed to be financial legal or tax advice. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Trading cryptocurrencies poses considerable risk of loss. The speaker does not guarantee any particular outcome.
#bitcoin #blockchain #consensus #staking #mining #pos #pow

[@CoinBureau]

Hope this overview is useful guys! Don't forget to follow me on some of my other social channels. We have some important updates in the pipes ;) 👉 guy.coinbureau.com/socials/

[@rishabhjain109]

Is Proof of History even better than Proof of Stake?

[@kingkong7882]

@@rishabhjain109 Did you ever ate stake before.

[@cjj6412]

Crypto is just a giant ClickFunnels source: am investment banker

[@leeclayton5151]

Keep calm and hodl on Guy. Great video again. Thanks for explaining the difference between the two methods

[@Saikrishna-dz4wt]

Please suggest a book to learn technical analysis from basics to pro level.Any online help also would be of great help

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Welcome to coin bureau, the largest crypto channel in the whole inter-webs, add free, transparent and no clickbait titles like other (small) crypto channels ;) Finally!

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Bybit….bybit…..anyone wanna use bybit and get rekt?

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I was trying to scrape that hair off my screen

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And he dont brag like bitboy

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And best

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In the war between bitboy and CB, it’s an easy choice

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I've been waiting for this day for AGES! Grats Guy! Finally overtook that clickbait producer.

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BitBoy can't handle this channel being the biggest 😂

[@D3athW1ng]

There's a channel called Bitboy? 😂 Funny, it never came up in my feed ... Wonder why? 😏

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Which is why they shouldn't be mentioned at all:) Can't compare apples and oranges xD

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Congratulations!!! Your channel is the # 1 crypto channel, you passed BitBoy! Well done, you deservedly.

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Who’s bitboy? Sorry,I only looking for education channels

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GUY the ONLY youtuber that really cares about u and not about that sweet commission from referral links

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@Ninja Eyes I know, but it’s not on ur face and he barely mentions the referrals

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No Adds or sponsors - so they monetize under the hood, 100% OK

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My guy is doing god's work in terms of education. You make lengthy content that's easly digestible even for folks like me that have a low attention span(ADHD), Cheers to the Coin Bureau team!

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I guess the whole world has ADHD these days

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At last the best CRYPTO channel is now the biggest, congratulations well deserved.

[@Chatbox_of_ANTI-CHEF]

Do you trade, hold , margin trade or future trading bitcoin or any other ? and your comment is nice

[@ChrisCEdwards07]

Congrats on being the Biggest crypto channel on KZbin! You deserve it man! Super happy for you!

[@sylviabells8224]

I agree wt you Chris

[@khanu.s.a6091]

Thank You for an excellent and easily understandable description and explanation of Proof of Work v.s Proof of Stake Consensus Mechanisms. Despite being concise you present information with such good examples that it makes it very convenient to grasp the basic concept of Blockchain and Crypto technology. No wonder your subscribers are increasing day by day and that is good to see.

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[@Aforce90]

I was just about to research this area, perfect timing. Big up the notification crew!

[@lynxlagoon]

hijacking this comment to make everyone aware that there is one project that managed to scale Proof of Work, while being energy efficient AND improving decentralization + security It's called Kadena and can do 480,000tps, why is no one talking about this?

[@SomeonePlaysGames]

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We all witnessed the “Flippening” of the largest crypto channel in al inter-web

[@littlelauchie]

Just love your videos. It makes me feel so smart when I actually follow along with things

[@fitnessforever247]

Thanks Guy..please do a vid on the 'Types of Pos' we have in the space and explain in a nutshell how they work/are secured nd the differences between them.. E.g Pos , SPos , NPos , PPos etc. You can explain concepts of each and match some examples to them 🌟🙏🏆

[@JYTE21]

Congrats,... the largest crypto channel by subscribers. :) Btw, BitBoy might not like this so much. 😂

[@Ollieharper3]

And well deserved too

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Quality content here only 👌👌👌

[@chythompson1222]

You and Thoughty2 are the only people I have subscribed to in the last couple years. I figure posting this here will help spread his videos and I will mention you on his channel. Much love

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THE PROFESSOR IS HERE AND HE IS ONE HELL OF A GUY !

[@atultiwari4750]

This GUY is crazy...I don't understand how he gets & understand such complicated information & makes it so easy to understand for beginners like me

[@CryptoJoeTrading]

Congrats I have been watching you for years always deliver on point messages

[@sjorsbertrand]

How do you manage to make a video about a subject I want to learn more about every single time? Keep up the great work!

[@TheeSeer]

Guy thanks for helping a Newby like me to understand this complicated adventure. PS: I saw that you are a music fan as I noticed your Recording Studio in another of your videos. I am a Vocalist and former Agent and spent time in the UK in the 1980's

[@NicolasGanea]

Thank you you guys are back! Glad you guys got your youtube account back

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I no longer binge-check prices, instead I enjoy learning from this channel Valuable stuff

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I hope this means you got your account back! Good to have you

[@conra9560]

Excellent explanation as always 👍 Could you do DAG vs “zero” knowledge proof?

[@doubledown9]

Fantastic as always! Extremely comprehensive!

[@grantsteel1050]

Thanks Guy, very informative! Well delivered as usual.

[@preetisahani6417]

Guy love your vids. Always get excited whenever your videos get uploaded 🙂

[@FIgirl2030]

I’m new to crypto and still learning. Your channel is one of the main ones I watch to learn about crypto. This channel is excellent! I appreciate that there aren’t any ads interrupting at the most awkward times and I love how you explain things easily and clearly. Your crypto swag is 🔥 your crypto rhymes are 🔥 Thank you for providing all of this awesome info!!

[@rammachiraju]

PoS system leads to centralization and can impact it's core protocol due to this type of centralization. With PoW people like you say miners equipment is expensive and it gets centralized. But miners do not have any special powers to control the BTC protocol. They just create and provide a block to the nodes and keep network secure. If nodes do not accept it, they can't do anything. Miners are more like service providers to Bitcoin where nodes are the actual users/participants or bitcoin. Same with protocol changes. Miners can't do shit without majority of nodes agreeing. The more participants we have running simple nodes, the more resilient the network is thereby providing true decentralization. When blocksize war happened majority miners wanted to change block size but failed coz nodes didn't accept it. All you need is a node to participate in any changes proposed. It's super easy to run Bitcoin node due to the size of block and transactions are account to a simple ledger. That's why it stays easy in future. Unlike application blockchains like ETH where it'll get increasingly harder and harder to run a full node. But anyone can run a node with simple hardware on Bitcoin now and in future. That's how BTC stays truly decentralized.

[@Infinitbe]

Great content as always, and congrats for the lead 🏆

[@connie1070]

EXCELLENT VIDEO!!! Thank you, you explained this process in a manner that even I can understand how it works. Well done sir!

[@jjemsnd7]

That was excellent very well explained it's something I didn't understand and I have a better understanding of it now thank you

[@ebertenor]

honestly this is one of the more useful vids

[@ronakio]

Congratulations Guy. You're number 1!!!

[@AP-ur2yy]

The explanation is amazing. The way you broke it down and pieced it back together made me go ooooooh okay

[@muhario1]

Quality content as usual 🙌🏾🙌🏾

[@evanmichaels6156]

80,000 more subscribers than Bitboy!!

[@otc0076]

I knew you'd be able to break it down the best thx

[@AlexFurusa]

Guy my guy. I was actually looking for this and you happened to be posting it today.

[@popsmokereal5902]

Same

[@PuI2ePLaYaZ]

Very educational... very thankful for the knowledge earned from watching this video Mr. Guy. Thank You!

[@niconoire]

Adoption of "improvements" should be a slow and tedious process. The "improvement" in question should only be adopted if its value proposition is so compelling that it can inspire consensus among the many disparate actors forming the network.

[@tomd5678]

Good to see you back

[@DisplacedPanda]

I think this video was awesome, but I think that addressing Proof of Storage would also be very interesting. Love you work

[@arcanine_059]

Excellent explanation of PoW and PoS without taking a bias approach. You showed each side's pros and cons and for that you deserve my like and subscribe.

[@rammachiraju]

PoS system leads to centralization and can impact it's core protocol due to this type of centralization. With PoW people like you say miners equipment is expensive and it gets centralized. But miners do not have any special powers to control the BTC protocol. They just create and provide a block to the nodes and keep network secure. If nodes do not accept it, they can't do anything. Miners are more like service providers to Bitcoin where nodes are the actual users/participants or bitcoin. Same with protocol changes. Miners can't do shit without majority of nodes agreeing. The more participants we have running simple nodes, the more resilient the network is thereby providing true decentralization. When blocksize war happened majority miners wanted to change block size but failed coz nodes didn't accept it. All you need is a node to participate in any changes proposed. It's super easy to run Bitcoin node due to the size of block and transactions are account to a simple ledger. That's why it stays easy in future. Unlike application blockchains like ETH where it'll get increasingly harder and harder to run a full node. But anyone can run a node with simple hardware on Bitcoin now and in future. That's how BTC stays truly decentralized.

[@s3g4_21]

Not at all. PoS is just a scam

[@ondemandtraders3009]

Hi there, Your content is incredibly valuable and I highly thank your efforts for providing quality education.

[@nikolai9851]

YOU DO GREAT WORK!

[@vineetbrahmankar3039]

i didn't understand all the key points in first view. I had to watch the video twice but that's ok absolutely worth watching. Thanks for such videos Guy. 👍🏻

[@Buksdorf]

these videos are my heart and soul on crypto. thanks Guy

[@jasonwooldridge8262]

Congratz on 1 million subscribers! Well deserved, great content as usual ✔✔✔

[@sylviabells8224]

Hello Jason

[@davidmvg216146]

Always the best content in the space

[@kriswillman2779]

The information on here is top notch. Very easy to digest even for newbies.

[@mdshahbazkhan8095]

I was waiting for this day. Many congratulations on being the largest crypto channel in all the interweb. Please share it on twitter so the fans can acknowledge

[@ehern87]

Always love getting financial advice from Guy!

[@chloeevans6752]

Not financial advice! 🤣

[@dimanyc2004]

Great stuff, as always. I just took a few pages of notes from this video. Would be cool to see a comparison of PoS vs. DPoS some day. Thx, Guy!

[@sylviabells8224]

Hi

[@dazzybizzle]

You are a legend, and on this day... you became the largest crypto channel in all the interwebs 😉 Thank you for breaking this information down, it reduces the FUD, and actually allows people to be educated and learn. Most channels are either about unnecessary hype or using jargon which no one understands, and the main purpose, is to try and get user adoption. You are the balance. Keep it up, you are the guy!

[@aryan3229]

Simple. POW and POS are Sybil mechanisms. Sybil mechanisms are used to prevent people from creating multiple identities and take over the network. POW uses hash power, POS uses stake power as a limited resource.

[@aryan3229]

And also, POW and POS are not consensus mechanisms. They are Sybil Resistance mechanisms.

[@brianpennay5356]

Congratulations on becoming #1 in the Crypto KZbin space you passed Bitboycrypto

[@Alan-vo4br]

I'm actually glad he got number 1 crypto channel, defo deserves it

[@sylviabells8224]

Yes Alan....how are you?

[@erickmandianez]

Amazing video!!! congrats. learning a lot from your videos.

[@alizaheer6153]

So happy to see your channel is now officially bigger then Bitboy 😍

[@alizaheer6153]

Go check it out

This was so much knowledge presented as simply as possible. Great video. I think a part of creating decentralization is educating people how the technology works and how it can solve problems in todays society. I just wish we will collectively be able to decide, that decentralization is something good to happen.

[@enriquellerena4779]

Best crypto channel by far. Congrats 👍

[@first2becheesedgrimberg6]

Always a great guy for guides

[@madslug7139]

Thank you! Great as all ways!

[@canadiancorn8594]

Want to give props to your AV, guy… very professional work. Do you have any videos that discuss the possible implications of quantum computation on the future of the network security? You have a way of making these “technical” things make more sense.

[@Joker3515]

Another great video! Thanks Guy!

[@craks594]

Wow i just realised we are now the biggest crypto KZbin channel🥳 Congratulations, guy 💯% deserved

[@gaussniwre866]

I have nothing but respect for the work you do. This again is a really good intro to PoW and PoS. That being said a little correction: PoW and PoS are *not* consensus algorithms. Their goal is to protect against sybil attacks. In the case of PoW for bitcoin (and others) the consensus algorithm is simply always look at the longest chain (which works because of the work put there). For PoS this is less clear (it does not work to chose the longest chain) and, hence, another protocol layer, the actual consensus algorithm, is needed. In case of future Ethereum that would be the rules regarding the pseudo-random selection of block proposer and slashing rules. Avalanche, also PoS, has a very different consensus algorithm which does not randomly select a block proposer but works through random vote sampling. I hope this shows that these are not the same concept: sybil resistance vs consensus algorithms.

[@Chatbox_of_ANTI-CHEF]

Do you trade, hold , margin trade or future trading bitcoin or any other ? and your comment is nice

[@Firstname_Surname]

Yes, PoW and PoS are not consensus algorithms, but rather consensus mechanisms.

[@goldengold8568]

Highest quality content indeed.

[@youretheai7586]

Congratulations on your achievement!! :-)

[@porkchopking656]

Love your work guy 👍

[@HobbitJT]

Excellent content, really like the way you’ve explained with easy to understand examples

[@Chatbox_of_ANTI-CHEF]

Do you trade, hold , margin trade or future trading bitcoin or any other ? and your comment is nice

[@xaeon_thesandbox]

Great vid as always!

[@moecom8540]

u r the best ! thanks bro

[@terrencealford4604]

Great tutorial Guy! Thanks

[@melaniemunoz2003]

Congrats! Yours is officially the largest crypto channel on the KZbin platform. Some other channel can no longer make that claim.

[@ChrisCEdwards07]

I told that other channel he needs to change his intro now haha

[@melaniemunoz2003]

He does otherwise he would be spewing a lie, lol!

[@ferhana4036]

upvoted for not mentioning the name of the competing channel.(no need to advertise that here) Guy and the Coin Bureau are at much higher level and deserve to be the top crypto channel.

[@danielakachi3666]

I did not hear "not financial advice"😂

[@I-done-did-it]

Unless I’m mistaken, in 🇬🇧, interest earned on staking is classed as income, not capital gains. The same as airdrops on the day you receive them.

[@tanyainglis3544]

Because Guy speaks & explains clearly , not just hype up coins tokens etc , bit boy talks so fast sometimes I get lost and lose my train of thought 🤣🤣

[@Chatbox_of_ANTI-CHEF]

Do you trade, hold , margin trade or future trading bitcoin or any other ? and your comment is nice

[@RRMM77]

Muchas gracias amigo guy.

[@jjbeatz5025]

Congrats on being the largest crypto KZbin channel bro passed bitboy

[@apachetruyts1158]

one of my top channels for all that involves crypto. noticed a funny thing today: holds hands. shakes with open hands, hold again, hold hold hold, now opens and shakes. rinse and repeat. ^^

[@PaulStephenson003]

Thank you for sharing. subscribed

[@dominikschwarz4420]

Thanks for your work.

[@martinlong2804]

Brilliant, well explained thanks

[@adameskow562]

such good content. thank you!

[@user-pj3uv6re7s]

My first ever comment on your channel. Excellent channel, Guy. Just my opinion but, proof of work may actually be the better alternative (further in the future) as: 1. Entering as a node participant can be done casually/easily (inclusive to all beginners, lower barrier to entry). 2. True edge-device/decentralized processing can be realized with the right hashing algorithms (ones that require lower compute resources, allowing for mobile devices to participate). 3. Better anonymity. Cloud infrastructure companies (where you setup your staking nodes if you're not on a staking pool) have your email and other "personal" details. The "bad for environment" (an easier to solve) problem is much smaller compared to "riskier for crypto holders", "bad for decentralization" and "bad for network security". Again, just my opinion... Excellent channel, Guy (did I mention this already btw?).

[@davidumason5424]

Perfect disclaimer, thank you very Guy. your up to date crypto education has mine a crypto geek out me.

[@Chatbox_of_ANTI-CHEF]

Do you trade, hold , margin trade or future trading bitcoin or any other ? and your comment is nice

[@FeistyJackball]

Appreciate all your efforts!

[@sylviabells8224]

Hello Christopher

Congratulations Guy for being the biggest crypto youtube channel!!!

[@lemenace17]

That jacket is like something from a fortnite skin. Looks awesome!

[@Phantastikal]

Amazing explanation with everyday examples

[@lilysslimefest]

Woo hoo,, U HAVE THE BIGGEST AND BEST CHANNEL.... WELLDONE SIR 👍🙏

[@collectiblejohn1432]

New to crypto, love the starters guilds!

[@jamespedro8535]

Hi John I care to tell you everything you need to know about cryptocurrecy. If only yo7 don't mind

[@danielschulz9304]

Great analogy, cheers

[@shahryarapply]

thank you for spelling Iran right

[@Floorguy1000]

As the BTC highest use case is as an asset, it is critically important to keep it with the most secure validation method. I like that it keeps to proof of work ....for now anyway...lol.

[@derek.seaborn]

I agree 100%. Proof of work is critical to bitcoin. I’d most likely sell all my bitcoin if it moved to PoS, which I don’t see happening.

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Do you mind if I introduce you to a more reliable and profitable investment company where I invest and earn 50% rate everyday?