Proof of Work vs. Proof of Stake: Pros and Cons

Share This Post

Proof of Stake and Proof of Work are consensus mechanisms that let blockchains work safely. Consensus mechanisms keep blockchains secure by verifying transactions, permitting just verified clients, or creating a new token. They remove the chance of using the same money twice.

So, do you want to learn about the Proof of Work vs. Proof of Stake clash? Or, on the other hand, need to discover more about how to mine Ethereum, Dash, Bitcoin, and other famous blockchains that utilize PoW? In any case, you have come to the right spot.

In this Proof of Work vs. Proof of Stake article, we will see what both these models mean and how they work. You will soon know why PoS is an improved model compared to PoW.

Proof of Work Defined

Proof of Work is needed to determine how the blockchain gains consensus. How can the network be sure that the transaction is legitimate and that somebody isn’t attempting to do terrible things?

Proof of work is a model where computers go up against one another to solve complex mathematical puzzles. This cycle is usually known as mining. It is called so because the energy and assets required for this puzzle are identical to the real world of valuable mining metals from the earth. As Nathaniel Popper’s book called “Digital Gold” uses the following analogy to describe it:

It is simple to multiply 2,903 and 3,571 on a paper, yet harder to sort out what two numbers you need to get 10,366,613.

Using this relationship, we can envision a miner in the Bitcoin network should sort out which two numbers are needed to get 10,366,613. When a computer determines that 2,903 and 3,571 are the two numbers, it presents the answer to other computers in the network. All of them confirm that 2,903 and 3,571 are the numbers required.

Whenever a miner finishes this “puzzle” before other miners, they can make another block (transactions) and broadcast it to the network of nodes. It will then exclusively perform audits of the current ledger and the new block. Once verified, the new block is linked to the previous block, forming a transaction chain. The miner then gets rewarded with bitcoins for providing their assets (energy).

How does PoW work? 

The PoW model is a consensus mechanism used to validate transactions. Here is how bitcoin utilizes PoW to keep the integrity of its blockchain. At the point when a transaction happens in the Bitcoin blockchain, they go through a security check and gather into a block for mining. Bitcoin’s Proof of Work algorithm then, at that point, produces a hash. 

Miners compete to create a hash that is beneath the block hash quickly. They also get new coins and transaction expenses as rewards. Bitcoin has a decent inventory of 21 million coins, but miners will keep getting these expenses as rewards from that point forward.

Bitcoin’s Proof of Work blockchains adds another block every 10 minutes. It changes the problem of mining Bitcoin, relying on how rapidly miners add blocks.

Proof-of-Work Pros

Healthy competition and renewable energy

Bitcoin mining is not an easy task to do. Miners always seek the best cost-effective ways to mine. This approach naturally encourages those who can identify minor energy consumptive sources and construct faster and energy-efficient mining chips. It helps them to prevent double-spending. Competition among them can lead to advancements in the innovation of computers that benefit businesses other than bitcoin mining.

Trapped energy

Some communities use crypto mining to transform trapped energy into value that may be transferred or used to pay for other projects. They do so to generate economic activity in distant places. Real-world examples include Sichuan and Yunnan in China. Due to excess water during their long rainy seasons, they can generate vast amounts of renewable hydropower. Sadly, they do not possess the ways to transmit and sell this energy.


Proof of Work is the best way to maintain consensus and security in a distributed public crypto network. Because, unlike Proof of Stake, Proof of Work needs computational resources rather than a one-time investment.

Bitcoin, since its inception, has had an uptime of more than 99%. There have been only two instances of downtime, i.e., in August 2010 and March 2013. Later on, updated software to nodes solved these happenings. Due to the consensus method, all network members felt these adjustments were in the best interest of the whole network.

Proof of Work Cons

Energy consumption

Proof of Work blockchains, like Bitcoin and Ethereum, use a lot of energy consumption to protect their networks due to high computing power. Bitcoin uses more power than countries like Ukraine and Norway. Environmentalists say it’s significant amounts of energy consumption.

While these networks require so much energy, many competitors fail to consider the types of energy utilized in mining and instead focus on the footprint of energy consumed. However, research shows that bitcoin miners have a variety of power sources. According to some, renewable energy is about 50% to 70% of total electricity consumption.


The most reasonable con of the bitcoin network is its usage of electronic waste. Proof of Work miners often run 24hrs each day a week. High temperatures, humidity, and inadequate ventilation can impair these processes and limit the lifespan of their equipment.

Furthermore, ASIC chip producers are constantly improving their products. When such inventions occur, older chips lose their block producer ability. Hence they leave behind in the competitive race and eventually become e-waste. ASIC mining chips typically survive 3–5 years. New chips must have a highly efficient hashing process, resistance to high heat, and should outlast older ones.


Crypto mining is not allowed in regions like China because of censorship issues and traceability. Electric meters and thermal cameras can locate the massive power draw. Countries against crypto can follow where crypto mining happens and make a crackdown on it. Permitting only those with a permit to mine could hurt decentralization by keeping the network from being completely open.

Apart from them, most nations appear to be favorable to crypto. A few countries might attempt to limit mining. In any case, permitting remote miners to work should help stop censorship.

Proof of Stake Defined

Proof of stake (PoS) first came into existence on an internet-based forum called BitcoinTalk on the 11th of July, 2011. PoS gets rid of miners and replaces them with “validators.” Unlike PoW blockchains that put resources into energy-consuming PC mines, you put resources into the local coins of the network. To turn into a validator and win the block reward, you secure or stake your tokens. You need to stake them in a smart contract, some PC codes that use blockchain to run. Whenever you send digital assets to the wallet addresses of these contracts, it carries that currency, like a locker.

How does PoS work?

The genesis block is the first and hardcoded block of the blockchain in the Proof of Stake system. An updated record is present on the blockchain after the subsequent blocks. Miners don’t vie for the option to add blocks to the PoS consensus mechanism. The blocks are alluded to as “minted” or “fabricated,” as opposed to “mined.”

Honestly, this isn’t true with PoS blockchains. Despite the high energy use of PoW blockchains, a proof of stake system removes the need for the process called mining. The proof-of-stake mechanism is more energy-effective than the proof-of-work since mining new blocks need little energy. You likewise don’t require the latest technology and tools to make new partnerships. The proof of stake constructs the network’s nodes.

More nodes in a network help to oppose central authority. A better level of hardware independence in Proof of Stake systems permits this. Proof of Stake is simply the consensus algorithm that will not lead to centralization.

PoS may likewise contain factors that may not necessarily benefit the richer nodes, for example, time spent betting and randomness. A valid block submitter gets a network fee like the Proof of Work system.

Proof-of-stake Pros


PoS systems utilize less power than proof-of-work systems. Many proof-of-stake systems don’t require specialized hardware, but you can use laptops like the ones we usually use. Generally, proof-of-stake systems likewise have basic validator programming. 

Increased throughput

Instead of a rivalry among miners to crack a puzzle, network participants need to choose the next block based on their tokens. Accordingly, new transactions are quicker with the proof-of-stake than with the proof-of-work blockchain network. The course of nodes achieving a consensus once a validator displays the subsequent blocks slows all blockchains, PoS or not.

Censorship resistance

Besides the energy and actual necessities, proof-of-stake validators can run on small setups. One validator can deal with 33% of the whole financial network in a room full of humming PCs.

Lower barrier to entry

Proof-of-stake (PoS) validators need to purchase tokens once to take an interest in the proof-of-stake consensus mechanism. Interestingly, a miner in a proof-of-work should buy and keep high-end mining hardware due to sizeable computational power, causing high energy costs.

Proof-of-stake Cons

Unproven at large scale

It is not of the size of Bitcoin or Ethereum. Accordingly, PoS is not relatively as decentralized or secure as the Proof of Work network.

However, while PoS networks are not right now as extensive as Bitcoin’s, there is not a great explanation they can’t fill the gap with time. Proof-of-stake systems might have the option to scale past proof-of-work systems because of lower entry barriers and no requirement for specific hardware.

Coin consolidation

PoS urges coin collection to improve the probability of winning a block and acquiring an award.

A rich entry or early adopters can corner token business sectors and get a large sum of coin ownership. Generally, proof-of-stake systems permit quite a few validators. Since validators are easy to build, somebody controlling most of the tokens could close down the network.

Some new proof-of-stake currencies pre-offer tokens to investors. These deals have made up 40% or more, benefiting early investors.

Less robust security

As expressed beforehand, lowering the entry barrier for network clients can help support validator count and subsequently decentralization. However, it can likewise lessen network security.

To go after a proof-of-work network, you would have to purchase enough stuff to represent the whole web and afterward pay to run everything. The underlying hardware cost and more energy use make attacking the network less practical. Proof-of-stake systems have low starting expenses, making them weaker.

The upfront expense to go after an extensive proof-of-stake network is becoming little. For instance, securing a more significant part of the Avalanche network costs around $20 billion. The more individuals utilize proof-of-stake networks and hold their coins, the harder it is to go after them.

When should PoW or PoS be used?

The consensus cycle lowers the centralization of the elements liable for validating transactions. Unchangeable, trustless, and disseminated blockchain networks require a complete consensus process.

The sort of agreement required fluctuates by the network. Proof-of-work is fundamental for network security, fraud avoidance, and trust-building. Because of that, no one can misle a miner about a transaction. PoW keeps a crypto asset’s transaction history by making the data modification tougher with time. PoW decides the most valid blocks if there are a few available. Also, the distributed clock that permits miners to enter and stop requires PoW.

However, using a PoS-based procedure likewise impacts network performance and security. PoS has fast on-chain transactions and network transfer settlements. Validators will probably control vast measures of the network token to keep the chain secure.

But, PoS and PoW protection from risks is still questionable. In this way, proof-of-space has come to verify transactions—for instance, PoW and PoS blockchains experience centralization issues.


Proof of Work is the way to mine Bitcoin, Dash, and other cryptocurrencies. However, you must be mindful of its issues, for example, the power it requires, the centralization issue, and the risk of 51% attacks. On the other hand, PoS can be more productive due to its security, scalability, and energy efficiency. Alternate models may build up some momentum before long because of the ecological impacts.

Related Posts

The 5 Safest NFT Marketplace to Buy & Sell in 2022

This guide will show five of the top hottest NFT marketplaces you need to try and sell your digital assets in 2022. We will also answer some of your burning questions about the NFT marketplace.

Why Are CryptoPunks so Expensive

One of the oldest NFTs is Cryptopunks. There are 1000 collectible characters on Ethereum. On the other side, their prices are extremely high. Discover why their prices are so expensive in this article.

NFT in the Wine Industry: Why the Sudden Obsession with NFTs

Anything under the sun that is digitized can be an NFT. But is an NFT wine possible? Find out why the wine industry is suddenly obsessed with NFTs.

Everything You Need to Know About Blockchain Advantages and Disadvantages 

Blockchain technology works to secure the integrity of your data. Most importantly, it increases trust and brings cost savings across the network.

The Difference Between NFTs and Cryptocurrency: Explained

Digital entrepreneurs are familiar with the terms, “NFT” and “Cryptocurrency”. In this article find out the difference between these two terms.

Top 7 Rug Pull Scams in DeFi and How to Avoid Them

DeFi space has revolutionized the financial services industry by eliminating the middlemen. However, as strong is the potential and rewards, as strong are the risks regarding frauds and scams.