ELi5 PoW (Proof of Work) vs. PoS (Proof of Stake)


Im just trying to understand if theres one that is superior and the details of how each works and the pros and cons of each within the crypto space

In: Technology

I can explain this.

Bitcoin was the first practical system where a bunch of computers can agree on What’s What, agree on the state of the data mutually rather than being told it by a leader.

It does this by asking each computer on the network for its version of the data. But that raises a problem: someone could insert biased data favourable to themselves, spin up a million virtual machines, and have them all claim that’s the state of the data.

So Satoshi’s solution was to add proof-of-work, computationally difficult puzzles that must be solved to have input regarding the state of the ledger: [Bitcoin: A Peer-to-Peer Electronic Cash System](https://bitcoin.org/en/bitcoin-paper) said “If the majority were based on one-IP-address-one-vote, it could be subverted by anyone able to allocate many IPs. Proof-of-work is essentially one-CPU-one-vote.”

Proof-of-work and proof-of-stake are two slow-down mechanisms designed to add friction to input on the state of the blockchain. You couldn’t shout your own data over the other voices, because doing so requires more computers, more electricity, and that’s expensive.

There are problems with this slow-down mechanism, notably [Bitcoin’s enormous energy consumption](https://digiconomist.net/bitcoin-energy-consumption/). So proof-of-stake aims to achieve the same thing, but instead of having to buy computers and electricity, you have to buy the cryptocurrency of the blockchain itself. It achieves the same ends, i.e. making it expensive to have input into the state of the ledger, and therefore prohibitively expensive to input malicious scurrilous data, but without the need to burn so much energy.