The Difference: PoW vs PoS

Cover Image for The Difference: PoW vs PoS
Dan from Team
Dan from Team

Proof of Work (PoW) and Proof of Stake (PoS) are two concepts used in the behind-the-scenes of blockchain networks. Their application is used to validate transactions and create blocks on the blockchain network.


 What is Proof of Work (PoW)


Proof of Work is an economic measure to deter denial of service attacks by requiring work from the service requester, preventing things such as spam. The work required to add an additional block and validate transactions is usually done through processing time on a computer. The processing done on computers is required in order for the nodes to form a distributed ledger — a decentralized system that can agree and keep track of the value inside wallets. This process is called mining.


Currently the largest cryptocurrency, Bitcoin uses this concept to run its native blockchain network. Every time a Bitcoin is sent from one address to another, a block is created which stores the transactions. The miners who process these transactions get rewarded with additional coins. The biggest criticism of the Proof of Work system is the large amount of energy required to fulfill the computing process — making it both expensive and harmful to the environment


What is Proof of Stake (PoS)


Proof of Stake is an alternative to the Proof of Work system where it does not require strenuous processing power to validate transactions. Proof of Stake aims to achieve distributed consensus, which requires users to stake (lock up or hold) to validate ownership. By staking, users similar to miners are rewarded with additional coins. To stake, users must create a stake account, then delegate to a validator of their choosing. This validator then processes transactions and creates new blocks on the network.


Cardano is the current largest cryptocurrency that uses the Proof of Stake system. However, staking is quickly becoming a more popular alternative to Proof of Work and is seeing large coins such as ETH 2.0 and Dogecoin try to migrate over.



Although Proof of Work has previously been the basis of some of the largest cryptocurrencies up to date, a shift towards greener solutions is occurring. Apart from Proof of Stake, other alternatives include Solana’s Proof of History, NEM’s Proof of Importance, Storj’s Proof of Storage, Proof of Burn, Proof of Activity, and more. 


If you would like an article going deeper or on any other concepts be sure to let us know in our Reddit or Discord!

Cover Image for Stablecoins: A Guide for Beginners

Stablecoins: A Guide for Beginners

Cover Image for Governance: A Guide for Beginners

Governance: A Guide for Beginners