- Proof-of-Work vs Proof-of-Stake seems to be a never-ending debate
- Individuals should understand that both networks can help in different ways
- Bitcoin doesn’t need to shift on PoS, nor Ethereum needs to transition to PoW
Proof-of-Work (PoW) is the consensus algorithm that is used for mining Bitcoins, whereas Ethereum uses the Proof-of-Stake (PoS) algorithm. In PoW, the miner who solves the algorithm at first gets the ability to add a verified block in the blockchain. According to the PoS algorithm, a particular miner is selected randomly who can add a verified block to the chain. However, in the cryptosphere, there is a never-ending battle going on among the advocates of PoS and PoW. And the fight is only to know whether PoS is the best consensus mechanism or PoW.
Which is the best consensus algorithm for crypto mining?
According to the Ethereum developers, Proof-of-Stake is the best consensus algorithm to step forward with. But the main concern is whether the algorithm will advantage Bitcoin, which is being used as a store of value, with different aims. Opinions in the large crypto community are divided regarding the issue. On one side, few believe that PoW is ideal for Bitcoin, as it helps to achieve more excellent stability and security. On the other hand, there are advocates of PoS who claim that the mechanism offers a similar protection level while providing simplicity and scalability. Moreover, PoS is also considered for more negligible environmental impacts.
From Proof-of-Work to Proof-of-Stake
Both Proof-of-Work and Proof-of-Stake consensus mechanisms are having different purposes. Few advocates of Bitcoins don’t even address the PoW vs PoS debate. Many less partisan commentators acknowledged that both the consensus mechanisms have their own strengths and weaknesses. Many also considered that Proof-of-Stake is theoretically more prone to centralization, with inherent security issues.
According to Lex Sokolin, The global fintech co-head of ConsenSys, PoW’s most significant advantage is that it worked as the chassis for cryptographic security for over ten years. And now the consensus mechanism is securing a trillion in value. Moreover, the algorithm’s complexity is what attracts miners to maintain the network.
Is it beneficial for Bitcoin to shift towards PoS?
Although the PoS network is more superior on the balance of PoW, it doesn’t mean that Bitcoin needs to shift from Proof-of-Work. Lex Sokolin stated regarding the power consumption that oil and gas are still powering much of the world electricity consumption, which includes the human and machine operations used in the traditional financial sector. However, it doesn’t seem like the Bitcoin community will ever choose to shift.
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