Proof of Work vs. Proof of Stake: A Simple Guide

Proof of Work vs. Proof of Stake
blockgeeks.com/guides/proof-o...
If you've researched blockchain, you've probably heard of Proof of Work. It's a popular way for blockchains to keep consensus among their members. But there are a lot of drawbacks to Proof of Work, so many developers are working on an alternative!
In this video, we go over what Proof of Work is, and what some of it's problems are. We'll then go over Ethereum's future solution called Proof of Stake, and what it does differently.
For more blockchain guides, content, and videos, visit us over at www.blockgeeks.com
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Proof of Work vs Proof of Stake: Conclusion
Thanks to a PoS system validators do not have to use their computing power because the only factors that influence their chances are the total number of their own coins and current complexity of the network.
So this possible future switch from PoW to PoS may provide the following benefits:
Energy savings;
A safer network as attacks become more expensive: if a hacker would like to buy 51% of the total number of coins, the market reacts by fast price appreciation.
This way, CASPER will be a security deposit protocol that relies on an economic consensus system. Nodes (or the validators) must pay a security deposit in order to be part of the consensus thanks to the new blocks creation. Casper protocol will determine the specific amount of rewards received by the validators thanks to its control over security deposits.
If one validator creates an “invalid” block, his security deposit will be deleted, as well as his privilege to be part of the network consensus.
In other words, the Casper security system is based on something like bets. In a PoS-based system, bets are the transactions that, according to the consensus rules, will reward their validator with a money prize together with each chain that the validator has bet on.
So, Casper is based on the idea that validators will bet according to the others’ bets and leave positive feedbacks that are able accelerates consensus.

[@brusschain5769]

Simple and straight to the point. Your speed was fine. Thanks

[@nGUNNARp]

the idea that bad actors forming a mining pool could form a 51% attack is the exact same as saying bad actors can pool their stakes to have consensus...the difference is that with PoW, that attack is costly to maintain as you'd have to have the energy for 51% of the work and maintain it, while others can join the network and compete against you, while with PoS if you have the majority of the stake, there's absolutely no cost to you and nobody has the ability to out compete you. ignore the noise, buy bitcoin, nothing else is in your best interest.

[@knowgood5903]

Plus eth is partly centralized and transactions can be reversed.

[@road-x]

exactly. only bitcoin, only on your own non custodian wallet.

[@AndyU96]

There is never such a thing as "Developers wanting to switch to green". The only green that people with money care about is the USD.

[@jaredlising-simplybrewedph]

one thing, who processes or what processes the validation process in the POS? it will also need computation power i believe? or does that mean only the current pools or nodes are valid to be a validator? is the POS like on binance where staking is available? if so meaning the still miners in the current pool or node? is the one validsting the POS transsctions? i didnt get how POS validstion works

[@Joso997]

So proof of stake is basically open ended casino.

[@MarkusGhambari]

Proof-of-Work is a misnomer. You don't work. Super computers do. And you need money to buy super computers and pay the power bills so it's basically Proof-of-Stake. It's just a waste of computing power and electricity and poor investors end up copping all the bills at the end of the day while hardware and power companies cash in the profits. So if you think Proof-of-Stake is bad, Proof-of-Work is 1000000000x worse.

[@tdreamgmail]

@@MarkusGhambari Bad? In terms of ability to hack it's bad, but good for users. The only way to hack PoW is spending a shit ton of energy and money. PoW can be hacked by collusion, which happens everyday in politics and business.

[@MarkusGhambari]

@@tdreamgmail You think you can hack Proof of Stake? Good luck. Start with SwiftCash with a market cap of only 200,000 dollars. Let's see how much you have to pump it in order to acquire enough stake to be able to "hack" it :))

[@klemenkovacic9109]

@@MarkusGhambari It is not if you know what and where you are doing it. In fact under these terms you benefit the most. People with high bills do not make any deep research before hand and so they drown in electricity bills for good... If you are unable to calucalte that before you even invest then you are bound to lose. And with PoS you are basically paying someone else for something you could have done yourself and you actually could get rewarded for (PoW). While with PoS is just a scam. You have to to be QUOTE --> " CHOSEN " by the system and by that you need to have tons of coins invested in at this point you could also lose at any time. Everything.

[@MarkusGhambari]

@@klemenkovacic9109 You don't make any sense. You didn't refute anything I said. You just made a fool of yourself. Bye.

[@r3dp1ll]

Clear explanation. One thing, I saw somewhere else that for POS the verification process is called forging and not mining.

[@kousikmech]

correct They are called forgers.

[@alaskacryptofinancial4570]

outstanding explanation. Thank You.

[@PSAGrader]

Solid video. It goes fast, but that's exactly what I wanted. Thank you!

[@SickPrid3]

It's a switch from rewarding people who mine to rewarding people who own small fish won't make anything while the big players will cash in fuck that

[@valeenoi2284]

How do others validate the one that validates that one block?

[@tubzvermeulen]

Thanks for the video

[@OnlinePeriod]

I understand it now! Thanks

[@Raz_mik]

In PoW once the puzzle is solved the rest of the network need to check that it’s correct before a new block is mined. Does this principle apply to PoS as well? After the validator validates the transaction, does the rest of the network need to verify that it’s validated properly?

[@moises32123]

Same question with PoS bro, I still don't get how the PoS pool validates the transaction, or what principle uses

[@nsukkaman6847]

Thank you😊

[@ravi1041]

The only video i found very helpful. Subscribed 🇮🇳✌

[@shahzaintariq8704]

great channel in the world

[@bambamgolf]

I get it thanks

[@nikyabodigital]

I still do not understand how proof of stake will work on the validator's stand point.. We all know that mining in the miner's standpoint is just to keep running his unit to mine ... He could just sleep.. But for the POS in validator, will it be manual?

[@fakename3608]

1 (just 1!!) transaction (PoW) requires same energy as a 1.5 houses for a day?? fuck! that's madness!

[@rogerchuakt]

For POS, what do we mean by 'bad actor'? What kind of actions are considered a bad actor? It sounds like POS would shape the actor/stake to be in 'gambling' mentality? The outcome seems very uncertain. If that's the case, what's the motivation for actor/stake to act/contribute the effort to the pool?

[@BlockGeeks]

A bad actor is essentially someone trying to submit invalid or malicious blocks when they're called on to validate. This requires you to go out of your way to alter the code that you're running when you join the staking pool. If someone joins the staking pool and just lets their stake operate on its own / as intended, there shouldn't be any problems! There should be fairly consistent and reliable rewards.

[@LordHeigler]

Nicolas Cage, Ben Affleck, etc

[@lukebohemian]

very helpful. thank you so much!

[@wuzhai2009]

No information on PoS

[@uekikosuke3601]

I understood proof of work but proof of stake? I don't

[@MegaPeterlustig123]

PoS is is not as secure as PoW.

[@optimisticblackorange]

This is a very good and simple explanation

[@redred2]

Beginner here so here's a stupid question: Where do these people solve these puzzles in Proof of Work, where does it take place? How do I get involved with solving these mathematical puzzles?

[@jeremystyers]

You don't. It's not possible anymore. But the process is simple. You download a program and run it. That's it. The program cracks the code needed to solve the block and you get free crypto currency. The problem is that the difficulty of solving the code is sooooo high that it's impossible to ever solve it in time. You'd need a super computer or a "farm"(big room full of computers, running that program). The cost to create a farm is Soo high only the rich can afford it. Oh and you have to solve the code first. If anyone else finds the answer before your computer does then the next block is released and you have to start all over and try to solve the new code. That means you get nothing and waste all your money on equipment and electric bills. If you had the money to create a big farm then you could do it and solve the answer first. You'd then get free crypto. But good luck getting the funds to do that.

[@redred2]

@@jeremystyers thank you for the detailed reply! You learn something new everyday

[@aoe9857]

What do you mean by "take over the network"?

[@BlockGeeks]

Do you mean in regards to a 51% attack? If you have 51% of the mining power on a Proof of Work blockchain, you can theoretically reverse or change transactions after you've made them. It essentially delegitimizes the chain unless something is done to fix it!

[@VileStail]

@@bobbya8628 The 51% is the majority share (out of 100%), or simply just more than half. If 51% or more is controlled by a single entity, they can (theoretically) start messing with the blocks. It's easier to achieve that via mining pools rather than someone owning 51% or more of the entire market cap.

[@ayushimishra3256]

Looks like we are watching it in fast forward mode. To fast to understand

[@klemenkovacic9109]

1:53 and where would that money go? this PoS seems like a money grab for someone else imo

[@universenerdd]

The validator. Or it’s deleted

[@DanDascalescu-dandv]

Very thin explanation. How is the validator chosen? How is it determined when they should lose their stake?

[@demirkafasutlac2343]

I still have no clue what this means. Can I still buy the coins and make money as it goes up in value?

[@teal4675]

it means that miners will no longer exist leading to less electricity consumed

[@bennyduran6960]

@@teal4675 cant they get stolen it said tho by proof of stake?

[@jorgeneo560]

you are wrong in thinking that buying the 51% of staking pools is hard than beat the 51% computer power in pow, you had supply, deliver, power limitation, and in pos is just money, hedge founds and retail investor can group them selves and split the capital in many accounts to achive the 51%, becouse in the process you use the profit to create new accounts, and that way bend the random probability to your self, and even you solve that problem, let say you create some how the perfect pos, the reward block had to be adjusted to beat the depreciation of the coin, becouse if i am earning only 5% but the coin is volatile or it has problem to keep their value theres no real incentive to stake, so more people would quit the network and the large found would take over even more fast, and if you rise the reward too much you will enter in a inflation spiral that you would never be able to exit unless massive investors and users purchase the coin, or do you think eth 2.0 has only "techinal problems" to lunch the pos?, no they didnt figure out yet how to solve the problem

[@Ones_Complement]

Throw in a period man, jesus fucking christ.

[@MiguelAngelTaipe]

If you learn something here but you are fair and open for other opinions, watch this also: kzbin.info/www/bejne/oKHcno2tf75qb8k

[@user12122]

so its lottery basicly

[@JCR4990]

So basically proof of stake means the rich get richer and you can't make profit mining as a small guy anymore? Am I understanding correctly? Should I give up my attempts to acquire a 3090 for small scale at home ETH mining? I have free electricity and was hoping to make a few bucks mining ETH but this new system seems like it will kill any hopes of making a profit unless you hold a large amount of ETH already?

[@terrancebrooke9431]

The mainstream bitcoin and eth is POW

[@danielionanov5620]

Don't mine eth, mine other coins

[@Signal_in_the_noise]

Cardano

[@trca101]

exit scam

[@MrZZooh]

Sounds better than the current bullshit mining system but you still brought up "miners" when talking about this algorithm. You said you're chosen based off of how much they deposited.

[@saikrishnareddy3485]

Excellent but too speed...if I shrink the speed ,missing flavor...

[@davestafford4905]

I've got the same problem with my vibrator hoss 😔

[@polcore443]

Cardano is the best.

[@VileStail]

This aged well

[@squidmix2857]

Lol cardano lile eth is trash

[@accumanddistrading3963]

Really difficult video to watch

[@sukeerthreddy9169]

You speak too fast

[@rishab9761]

Why tf are you talking so fast? Calm down. I cant follow half of what you say.

[@davestafford4905]

It helps when you're on meth bro