{"id":2535,"date":"2022-02-03T13:48:00","date_gmt":"2022-02-03T13:48:00","guid":{"rendered":"https:\/\/moneymade.wpenginepowered.com\/?p=2535"},"modified":"2025-06-03T17:18:58","modified_gmt":"2025-06-03T17:18:58","slug":"proof-of-stake-vs-proof-of-work","status":"publish","type":"post","link":"https:\/\/moneymade.io\/learn\/comparisons\/proof-of-stake-vs-proof-of-work\/","title":{"rendered":"Proof of Work vs Proof of Stake: Why Proof of Stake Hasn’t Killed Proof of Work…Yet"},"content":{"rendered":"\n

Is proof of work dead? What’s the difference between proof of work (PoW) and proof of stake (PoS)? The answers aren’t as clear as you think.<\/em><\/strong><\/p>\n\n\n\n

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How does the internet agree on anything? Our world is more interconnected than ever, making it ripe for mistrust and conflict. But somehow, we make it work. Just like how the United Nations was founded on agreements called treaties, the internet is also composed of agreements called protocols. These protocols are the foundation of the web we know today.<\/p>\n\n\n\n

Proof of what?<\/h2>\n\n\n\n

Protocols make it possible for anyone to use the internet. The hypertext transfer protocol (HTTP) and domain naming system (DNS) are just a couple of conventions we all adhere to online every day. Similarly, blockchains are also networks governed by rules called protocols. Since blockchains have no central authority, things like proof of stake (PoS) and proof of work (PoW) are necessary to prevent fraud, denial of service attacks, and other bad-faith behaviors.<\/p>\n\n\n\n

Because blockchains are decentralized, the network must agree on a universal protocol for ensuring security. Each blockchain has its own protocol\u2014also known as a consensus mechanism\u2014for securely validating transactions. Proof of work is the most secure and reliable mechanism for validating transactions. This is the one used by Bitcoin, Litecoin, and, currently, Ethereum.<\/p>\n\n\n\n

What is proof of work?<\/h2>\n\n\n\n

Pros and Cons of Proof of Work<\/h3>\n\n\n\n

Pros<\/strong><\/p>\n\n\n\n

    \n
  • Battle-tested\u2014most reliable track record<\/li>\n\n\n\n
  • Secure\u2014harder to hack<\/li>\n\n\n\n
  • Decentralized\u2014requires no middlemen<\/li>\n<\/ul>\n\n\n\n

    Cons<\/strong><\/p>\n\n\n\n

      \n
    • Inaccessible\u2014requires expensive hardware<\/li>\n\n\n\n
    • Unsustainable\u2014requires a lot of electricity<\/li>\n\n\n\n
    • Not scalable\u2014can’t handle high transaction volume<\/li>\n<\/ul>\n\n\n\n

      The ‘work’ in proof of work refers to the computational power expended to validate transactions. This work entails producing a cryptographic hash that represents all recent transactions on the network. A hash is a unique string of characters that is produced and permanently added to the blockchain by a pool of computers\u2014known as ‘miners’\u2014in exchange for newly minted tokens. This is how Bitcoin mining works.<\/p>\n\n\n\n

      Benefits and drawbacks of proof of work<\/h3>\n\n\n\n

      The main benefit of the proof of work mechanism is its security. Some may think it’s cryptography that makes Bitcoin secure, but it’s actually the work. Specifically, it’s the resources, like electricity and computing power, required to do the work. Because any given set of data will only generate one hash, the only way to successfully tamper with a proof of work ledger is by controlling over half its computing power. It’s this computational requirement that makes validating a fraudulent transaction too impractical to reasonably achieve in a proof of work environment.<\/p>\n\n\n\n

      While having more miners on the network makes it harder to hack, Bitcoin is also designed to get progressively harder to mine. You could once mine Bitcoin using almost any old computer, but the gradually increasing difficulty has brought the barrier of entry up along with it. Bitcoin mining has become so competitive that it’s now hard to do with anything other than specialized hardware.<\/p>\n\n\n\n

      Making Bitcoin mining harder isn’t exactly aligned with the philosophy of decentralization, resulting in the need for prohibitively expensive Bitcoin super-miners. Also, Bitcoin contends with increased energy consumption as the network grows, yet, its inability to scale means that the rate at which transactions are processed\u2014known as throughput\u2014remains almost stagnant. These drawbacks are some of the symptoms of a proof of work framework.<\/p>\n\n\n\n

      One solution to this has been abandoning proof of work in favor of different protocols on which the basis of new blockchains can be built. One popular alternative is proof of stake, and it’s taken the crypto world by storm as the go-to model for creating trustless networks. So, how does proof of stake work?<\/p>\n\n\n\n

      What is proof of stake?<\/h2>\n\n\n\n

      Pros and Cons of Proof of Stake<\/h3>\n\n\n\n

      Pros<\/strong><\/p>\n\n\n\n

        \n
      • Sustainable\u2014uses less electricity<\/li>\n\n\n\n
      • Accessible\u2014no minimum requirement to delegate<\/li>\n\n\n\n
      • Scalable\u2014can handle higher transaction volume<\/li>\n<\/ul>\n\n\n\n

        Cons<\/strong><\/p>\n\n\n\n

          \n
        • Inequitable\u2014Those with the most tokens have the most power and influence over the network<\/li>\n\n\n\n
        • Consolidated\u2014higher possibility of centralization<\/li>\n\n\n\n
        • Insecure\u2014network is more vulnerable to attacks<\/li>\n<\/ul>\n\n\n\n

          Proof of stake shares the same principles and goals of proof of work: a protocol for validating transactions without a central authority. The big change with proof of stake is that it replaces miners with token holders known as ‘validators.’ Rather than enforcing a hardware requirement for participating in the network, this framework sets an economic requirement to ‘stake’ a minimum number of tokens.<\/p>\n\n\n\n

          Staking is the only requirement for turning a computer into a proof of stake validator node, so specialized equipment isn’t necessary to participate. Staking usually involves locking tokens, meaning withdrawals are restricted for a period of time, in exchange for becoming a validator and earning rewards\u2014with the top crypto staking coins being the most lucative. A stake can also serve as collateral for the validator who can lose their staked tokens if they don’t fulfill their duties.<\/p>\n\n\n\n

          Benefits and drawbacks of proof of stake<\/h3>\n\n\n\n

          One way proof of stake is less competitive than proof of work is by including delegators. Since the minimum token requirement for becoming a validator is often too high for most people to afford, many proof of stake protocols allow individuals to delegate their tokens to a validator in exchange for receiving part of their rewards. The role of delegator allows for broader participation beyond just those who can afford to be a validator.<\/p>\n\n\n\n

          Proponents of proof of stake also believe it’s the best way to address the high electricity consumption that proof of work is often criticized for. While it’s generally true that running a proof of stake validator is less resource-intensive than a proof of work miner, active validators are still consuming electricity 24\/7. Although proof of stake makes blockchains more energy sustainable, there are some ways in which proof of stake is fundamentally flawed.<\/p>\n\n\n\n

          Comparing proof of stake vs proof of work: which is better?<\/h2>\n\n\n\n
          Stats<\/th>Proof of work<\/th>Proof of stake<\/th><\/tr><\/thead>
          Security<\/td>Secured by computer ‘miners’<\/td>Secured by ‘validators’ & ‘delegators’<\/td><\/tr>
          Accessibility<\/td>Requires certain hardware<\/td>Minimum token staking requirement for validators<\/td><\/tr>
          Inflation Rate<\/td>Block rewards (inflation) gradually decrease<\/td>Can be inflationary or deflationary<\/td><\/tr>
          Token Issuance<\/td>New tokens are rewarded to miners who create new blocks<\/td>New tokens are issued proportionally to active validators and delegators<\/td><\/tr>
          Hacker Susceptibility<\/td>Hackers must control over 50% of the computing power to exploit the network<\/td>Hackers must control over 50% of the token supply to exploit the network<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

          Every consensus mechanism must strike a balance between security and efficiency. On one hand, proof of work blockchains require tons of computing power to operate, which makes them extremely secure but highly inefficient. On the other hand, proof of stake requires fewer physical resources, like energy and computing power, but it also has inherent vulnerabilities that may compromise security.<\/p>\n\n\n\n

          As flawed as the proof of stake mechanism is, it hasn’t been an obstacle to the widespread popularity of proof of stake cryptos like Cardano and Solana. Proof of stake is so ubiquitous now that it has given rise to modular proof-of-stake architectures such as Tendermint. Tendermint is an open-source consensus protocol that is byzantine fault tolerant, which means the blockchain will still work even if one validator fails or misbehaves. Some popular protocols that have adopted some form of the Tendermint consensus include Cosmos, Terra, Polygon, and Binance Smart Chain.<\/p>\n\n\n\n

          Tendermint is an example of how, with the right solutions to the fundamental issues, proof of stake can overtake proof of work as the standard way to secure a blockchain. Meanwhile, Ethereum co-founder Vitalik Buterin is advocating for a slightly different approach. Last year, he co-authored a paper detailing how a hybrid model called Casper works and why it could be a good compromise. Ethereum is currently leading the charge toward proof of stake, with plans to upgrade the network slated for sometime this year.<\/p>\n\n\n\n

          Although the idea is still in its infancy, a hybrid model could make sense. If implemented correctly, Casper could offer the best of both worlds\u2014the security of proof of work with the efficiency of proof of stake. Hardware-mined altcoins are falling out of vogue, so newcomers and veterans alike see only the benefits of embracing new blockchain protocols. Although the alternative isn’t so eco-friendly, the verdict is still out on whether there’s a secure future for proof of stake.<\/p>\n","protected":false},"excerpt":{"rendered":"

          Is proof of work dead? What’s the difference between proof of work (PoW) and proof of stake (PoS)? The answers aren’t as clear as you think. How does the internet agree on anything? Our world is more interconnected than ever, making it ripe for mistrust and conflict. But somehow, we make it work. Just like […]<\/p>\n","protected":false},"author":11,"featured_media":2537,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10],"tags":[22,34,56],"post_authors":[94],"class_list":["post-2535","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-comparisons","tag-cryptocurrency","tag-global-markets","tag-technology"],"acf":[],"yoast_head":"\nProof of Stake vs Proof of Work: Understanding the Key Differences | MoneyMade<\/title>\n<meta name=\"description\" content=\"Is proof of work dead? 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What's the difference between proof of work (PoW) and proof of stake (PoS)? 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What's the difference between proof of work (PoW) and proof of stake (PoS)? The answers aren't as clear as you think.<\/em><\/strong><\/p>\n","innerContent":["\n<p><strong><em>Is proof of work dead? What's the difference between proof of work (PoW) and proof of stake (PoS)? The answers aren't as clear as you think.<\/em><\/strong><\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/columns","attrs":[],"innerBlocks":[{"blockName":"core\/column","attrs":{"width":"10%"},"innerBlocks":[],"innerHTML":"\n<div class=\"wp-block-column\" style=\"flex-basis:10%\"><\/div>\n","innerContent":["\n<div class=\"wp-block-column\" style=\"flex-basis:10%\"><\/div>\n"]},{"blockName":"core\/column","attrs":{"width":"80%"},"innerBlocks":[{"blockName":"core\/image","attrs":{"id":2537,"sizeSlug":"large","linkDestination":"none"},"innerBlocks":[],"innerHTML":"\n<figure class=\"wp-block-image size-large\"><img src=\"https:\/\/moneymade.io\/learn\/wp-content\/uploads\/2025\/05\/Money_Made_Proofof_Stake_Article_MO_ee3ca21933-1024x683.png\" alt=\"\" class=\"wp-image-2537\"\/><\/figure>\n","innerContent":["\n<figure class=\"wp-block-image size-large\"><img src=\"https:\/\/moneymade.io\/learn\/wp-content\/uploads\/2025\/05\/Money_Made_Proofof_Stake_Article_MO_ee3ca21933-1024x683.png\" alt=\"\" class=\"wp-image-2537\"\/><\/figure>\n"]}],"innerHTML":"\n<div class=\"wp-block-column\" style=\"flex-basis:80%\"><\/div>\n","innerContent":["\n<div class=\"wp-block-column\" style=\"flex-basis:80%\">",null,"<\/div>\n"]},{"blockName":"core\/column","attrs":{"width":"10%"},"innerBlocks":[],"innerHTML":"\n<div class=\"wp-block-column\" style=\"flex-basis:10%\"><\/div>\n","innerContent":["\n<div class=\"wp-block-column\" style=\"flex-basis:10%\"><\/div>\n"]}],"innerHTML":"\n<div class=\"wp-block-columns\">\n\n\n\n<\/div>\n","innerContent":["\n<div class=\"wp-block-columns\">",null,"\n\n",null,"\n\n",null,"<\/div>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>How does the internet agree on anything? Our world is more interconnected than ever, making it ripe for mistrust and conflict. But somehow, we make it work. Just like how the United Nations was founded on agreements called treaties, the internet is also composed of agreements called protocols. These protocols are the foundation of the web we know today.<\/p>\n","innerContent":["\n<p>How does the internet agree on anything? Our world is more interconnected than ever, making it ripe for mistrust and conflict. But somehow, we make it work. Just like how the United Nations was founded on agreements called treaties, the internet is also composed of agreements called protocols. These protocols are the foundation of the web we know today.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/heading","attrs":[],"innerBlocks":[],"innerHTML":"\n<h2 class=\"wp-block-heading\" id=\"h-proof-of-what\">Proof of what?<\/h2>\n","innerContent":["\n<h2 class=\"wp-block-heading\" id=\"h-proof-of-what\">Proof of what?<\/h2>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>Protocols make it possible for anyone to use the internet. The hypertext transfer protocol (HTTP) and domain naming system (DNS) are just a couple of conventions we all adhere to online every day. Similarly, blockchains are also networks governed by rules called protocols. Since blockchains have no central authority, things like proof of stake (PoS) and proof of work (PoW) are necessary to prevent fraud, denial of service attacks, and other bad-faith behaviors.<\/p>\n","innerContent":["\n<p>Protocols make it possible for anyone to use the internet. The hypertext transfer protocol (HTTP) and domain naming system (DNS) are just a couple of conventions we all adhere to online every day. Similarly, blockchains are also networks governed by rules called protocols. Since blockchains have no central authority, things like proof of stake (PoS) and proof of work (PoW) are necessary to prevent fraud, denial of service attacks, and other bad-faith behaviors.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>Because blockchains are decentralized, the network must agree on a universal protocol for ensuring security. Each blockchain has its own protocol\u2014also known as a consensus mechanism\u2014for securely validating transactions. Proof of work is the most secure and reliable mechanism for validating transactions. This is the one used by Bitcoin, Litecoin, and, currently, Ethereum.<\/p>\n","innerContent":["\n<p>Because blockchains are decentralized, the network must agree on a universal protocol for ensuring security. Each blockchain has its own protocol\u2014also known as a consensus mechanism\u2014for securely validating transactions. Proof of work is the most secure and reliable mechanism for validating transactions. This is the one used by Bitcoin, Litecoin, and, currently, Ethereum.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/heading","attrs":[],"innerBlocks":[],"innerHTML":"\n<h2 class=\"wp-block-heading\" id=\"h-what-is-proof-of-work\">What is proof of work?<\/h2>\n","innerContent":["\n<h2 class=\"wp-block-heading\" id=\"h-what-is-proof-of-work\">What is proof of work?<\/h2>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/heading","attrs":{"level":3},"innerBlocks":[],"innerHTML":"\n<h3 class=\"wp-block-heading\" id=\"h-pros-and-cons-of-proof-of-work\">Pros and Cons of Proof of Work<\/h3>\n","innerContent":["\n<h3 class=\"wp-block-heading\" id=\"h-pros-and-cons-of-proof-of-work\">Pros and Cons of Proof of Work<\/h3>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p><strong>Pros<\/strong><\/p>\n","innerContent":["\n<p><strong>Pros<\/strong><\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/list","attrs":[],"innerBlocks":[{"blockName":"core\/list-item","attrs":[],"innerBlocks":[],"innerHTML":"\n<li>Battle-tested\u2014most reliable track record<\/li>\n","innerContent":["\n<li>Battle-tested\u2014most reliable track record<\/li>\n"]},{"blockName":"core\/list-item","attrs":[],"innerBlocks":[],"innerHTML":"\n<li>Secure\u2014harder to hack<\/li>\n","innerContent":["\n<li>Secure\u2014harder to hack<\/li>\n"]},{"blockName":"core\/list-item","attrs":[],"innerBlocks":[],"innerHTML":"\n<li>Decentralized\u2014requires no middlemen<\/li>\n","innerContent":["\n<li>Decentralized\u2014requires no middlemen<\/li>\n"]}],"innerHTML":"\n<ul class=\"wp-block-list\">\n\n\n\n<\/ul>\n","innerContent":["\n<ul class=\"wp-block-list\">",null,"\n\n",null,"\n\n",null,"<\/ul>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p><strong>Cons<\/strong><\/p>\n","innerContent":["\n<p><strong>Cons<\/strong><\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/list","attrs":[],"innerBlocks":[{"blockName":"core\/list-item","attrs":[],"innerBlocks":[],"innerHTML":"\n<li>Inaccessible\u2014requires expensive hardware<\/li>\n","innerContent":["\n<li>Inaccessible\u2014requires expensive hardware<\/li>\n"]},{"blockName":"core\/list-item","attrs":[],"innerBlocks":[],"innerHTML":"\n<li>Unsustainable\u2014requires a lot of electricity<\/li>\n","innerContent":["\n<li>Unsustainable\u2014requires a lot of electricity<\/li>\n"]},{"blockName":"core\/list-item","attrs":[],"innerBlocks":[],"innerHTML":"\n<li>Not scalable\u2014can't handle high transaction volume<\/li>\n","innerContent":["\n<li>Not scalable\u2014can't handle high transaction volume<\/li>\n"]}],"innerHTML":"\n<ul class=\"wp-block-list\">\n\n\n\n<\/ul>\n","innerContent":["\n<ul class=\"wp-block-list\">",null,"\n\n",null,"\n\n",null,"<\/ul>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>The 'work' in proof of work refers to the computational power expended to validate transactions. This work entails producing a cryptographic hash that represents all recent transactions on the network. A hash is a unique string of characters that is produced and permanently added to the blockchain by a pool of computers\u2014known as 'miners'\u2014in exchange for newly minted tokens. This is how Bitcoin mining works.<\/p>\n","innerContent":["\n<p>The 'work' in proof of work refers to the computational power expended to validate transactions. This work entails producing a cryptographic hash that represents all recent transactions on the network. A hash is a unique string of characters that is produced and permanently added to the blockchain by a pool of computers\u2014known as 'miners'\u2014in exchange for newly minted tokens. This is how Bitcoin mining works.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/heading","attrs":{"level":3},"innerBlocks":[],"innerHTML":"\n<h3 class=\"wp-block-heading\" id=\"h-benefits-and-drawbacks-of-proof-of-work\">Benefits and drawbacks of proof of work<\/h3>\n","innerContent":["\n<h3 class=\"wp-block-heading\" id=\"h-benefits-and-drawbacks-of-proof-of-work\">Benefits and drawbacks of proof of work<\/h3>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>The main benefit of the proof of work mechanism is its security. Some may think it's cryptography that makes Bitcoin secure, but it's actually the work. Specifically, it's the resources, like electricity and computing power, required to do the work. Because any given set of data will only generate one hash, the only way to successfully tamper with a proof of work ledger is by controlling over half its computing power. It's this computational requirement that makes validating a fraudulent transaction too impractical to reasonably achieve in a proof of work environment.<\/p>\n","innerContent":["\n<p>The main benefit of the proof of work mechanism is its security. Some may think it's cryptography that makes Bitcoin secure, but it's actually the work. Specifically, it's the resources, like electricity and computing power, required to do the work. Because any given set of data will only generate one hash, the only way to successfully tamper with a proof of work ledger is by controlling over half its computing power. It's this computational requirement that makes validating a fraudulent transaction too impractical to reasonably achieve in a proof of work environment.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>While having more miners on the network makes it harder to hack, Bitcoin is also designed to get progressively harder to mine. You could once mine Bitcoin using almost any old computer, but the gradually increasing difficulty has brought the barrier of entry up along with it. Bitcoin mining has become so competitive that it's now hard to do with anything other than specialized hardware.<\/p>\n","innerContent":["\n<p>While having more miners on the network makes it harder to hack, Bitcoin is also designed to get progressively harder to mine. You could once mine Bitcoin using almost any old computer, but the gradually increasing difficulty has brought the barrier of entry up along with it. Bitcoin mining has become so competitive that it's now hard to do with anything other than specialized hardware.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>Making Bitcoin mining harder isn't exactly aligned with the philosophy of decentralization, resulting in the need for prohibitively expensive Bitcoin super-miners. Also, Bitcoin contends with increased energy consumption as the network grows, yet, its inability to scale means that the rate at which transactions are processed\u2014known as throughput\u2014remains almost stagnant. These drawbacks are some of the symptoms of a proof of work framework.<\/p>\n","innerContent":["\n<p>Making Bitcoin mining harder isn't exactly aligned with the philosophy of decentralization, resulting in the need for prohibitively expensive Bitcoin super-miners. Also, Bitcoin contends with increased energy consumption as the network grows, yet, its inability to scale means that the rate at which transactions are processed\u2014known as throughput\u2014remains almost stagnant. These drawbacks are some of the symptoms of a proof of work framework.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>One solution to this has been abandoning proof of work in favor of different protocols on which the basis of new blockchains can be built. One popular alternative is proof of stake, and it's taken the crypto world by storm as the go-to model for creating trustless networks. So, how does proof of stake work?<\/p>\n","innerContent":["\n<p>One solution to this has been abandoning proof of work in favor of different protocols on which the basis of new blockchains can be built. One popular alternative is proof of stake, and it's taken the crypto world by storm as the go-to model for creating trustless networks. So, how does proof of stake work?<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/heading","attrs":[],"innerBlocks":[],"innerHTML":"\n<h2 class=\"wp-block-heading\" id=\"h-what-is-proof-of-stake\">What is proof of stake?<\/h2>\n","innerContent":["\n<h2 class=\"wp-block-heading\" id=\"h-what-is-proof-of-stake\">What is proof of stake?<\/h2>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/heading","attrs":{"level":3},"innerBlocks":[],"innerHTML":"\n<h3 class=\"wp-block-heading\" id=\"h-pros-and-cons-of-proof-of-stake\">Pros and Cons of Proof of Stake<\/h3>\n","innerContent":["\n<h3 class=\"wp-block-heading\" id=\"h-pros-and-cons-of-proof-of-stake\">Pros and Cons of Proof of Stake<\/h3>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p><strong>Pros<\/strong><\/p>\n","innerContent":["\n<p><strong>Pros<\/strong><\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/list","attrs":[],"innerBlocks":[{"blockName":"core\/list-item","attrs":[],"innerBlocks":[],"innerHTML":"\n<li>Sustainable\u2014uses less electricity<\/li>\n","innerContent":["\n<li>Sustainable\u2014uses less electricity<\/li>\n"]},{"blockName":"core\/list-item","attrs":[],"innerBlocks":[],"innerHTML":"\n<li>Accessible\u2014no minimum requirement to delegate<\/li>\n","innerContent":["\n<li>Accessible\u2014no minimum requirement to delegate<\/li>\n"]},{"blockName":"core\/list-item","attrs":[],"innerBlocks":[],"innerHTML":"\n<li>Scalable\u2014can handle higher transaction volume<\/li>\n","innerContent":["\n<li>Scalable\u2014can handle higher transaction volume<\/li>\n"]}],"innerHTML":"\n<ul class=\"wp-block-list\">\n\n\n\n<\/ul>\n","innerContent":["\n<ul class=\"wp-block-list\">",null,"\n\n",null,"\n\n",null,"<\/ul>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p><strong>Cons<\/strong><\/p>\n","innerContent":["\n<p><strong>Cons<\/strong><\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/list","attrs":[],"innerBlocks":[{"blockName":"core\/list-item","attrs":[],"innerBlocks":[],"innerHTML":"\n<li>Inequitable\u2014Those with the most tokens have the most power and influence over the network<\/li>\n","innerContent":["\n<li>Inequitable\u2014Those with the most tokens have the most power and influence over the network<\/li>\n"]},{"blockName":"core\/list-item","attrs":[],"innerBlocks":[],"innerHTML":"\n<li>Consolidated\u2014higher possibility of centralization<\/li>\n","innerContent":["\n<li>Consolidated\u2014higher possibility of centralization<\/li>\n"]},{"blockName":"core\/list-item","attrs":[],"innerBlocks":[],"innerHTML":"\n<li>Insecure\u2014network is more vulnerable to attacks<\/li>\n","innerContent":["\n<li>Insecure\u2014network is more vulnerable to attacks<\/li>\n"]}],"innerHTML":"\n<ul class=\"wp-block-list\">\n\n\n\n<\/ul>\n","innerContent":["\n<ul class=\"wp-block-list\">",null,"\n\n",null,"\n\n",null,"<\/ul>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>Proof of stake shares the same principles and goals of proof of work: a protocol for validating transactions without a central authority. The big change with proof of stake is that it replaces miners with token holders known as 'validators.' Rather than enforcing a hardware requirement for participating in the network, this framework sets an economic requirement to 'stake' a minimum number of tokens.<\/p>\n","innerContent":["\n<p>Proof of stake shares the same principles and goals of proof of work: a protocol for validating transactions without a central authority. The big change with proof of stake is that it replaces miners with token holders known as 'validators.' Rather than enforcing a hardware requirement for participating in the network, this framework sets an economic requirement to 'stake' a minimum number of tokens.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>Staking is the only requirement for turning a computer into a proof of stake validator node, so specialized equipment isn't necessary to participate. Staking usually involves locking tokens, meaning withdrawals are restricted for a period of time, in exchange for becoming a validator and earning rewards\u2014with the top crypto staking coins being the most lucative. A stake can also serve as collateral for the validator who can lose their staked tokens if they don't fulfill their duties.<\/p>\n","innerContent":["\n<p>Staking is the only requirement for turning a computer into a proof of stake validator node, so specialized equipment isn't necessary to participate. Staking usually involves locking tokens, meaning withdrawals are restricted for a period of time, in exchange for becoming a validator and earning rewards\u2014with the top crypto staking coins being the most lucative. A stake can also serve as collateral for the validator who can lose their staked tokens if they don't fulfill their duties.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/heading","attrs":{"level":3},"innerBlocks":[],"innerHTML":"\n<h3 class=\"wp-block-heading\" id=\"h-benefits-and-drawbacks-of-proof-of-stake\">Benefits and drawbacks of proof of stake<\/h3>\n","innerContent":["\n<h3 class=\"wp-block-heading\" id=\"h-benefits-and-drawbacks-of-proof-of-stake\">Benefits and drawbacks of proof of stake<\/h3>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>One way proof of stake is less competitive than proof of work is by including delegators. Since the minimum token requirement for becoming a validator is often too high for most people to afford, many proof of stake protocols allow individuals to delegate their tokens to a validator in exchange for receiving part of their rewards. The role of delegator allows for broader participation beyond just those who can afford to be a validator.<\/p>\n","innerContent":["\n<p>One way proof of stake is less competitive than proof of work is by including delegators. Since the minimum token requirement for becoming a validator is often too high for most people to afford, many proof of stake protocols allow individuals to delegate their tokens to a validator in exchange for receiving part of their rewards. The role of delegator allows for broader participation beyond just those who can afford to be a validator.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>Proponents of proof of stake also believe it's the best way to address the high electricity consumption that proof of work is often criticized for. While it's generally true that running a proof of stake validator is less resource-intensive than a proof of work miner, active validators are still consuming electricity 24\/7. Although proof of stake makes blockchains more energy sustainable, there are some ways in which proof of stake is fundamentally flawed.<\/p>\n","innerContent":["\n<p>Proponents of proof of stake also believe it's the best way to address the high electricity consumption that proof of work is often criticized for. While it's generally true that running a proof of stake validator is less resource-intensive than a proof of work miner, active validators are still consuming electricity 24\/7. Although proof of stake makes blockchains more energy sustainable, there are some ways in which proof of stake is fundamentally flawed.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/heading","attrs":[],"innerBlocks":[],"innerHTML":"\n<h2 class=\"wp-block-heading\" id=\"h-comparing-proof-of-stake-vs-proof-of-work-which-is-better\">Comparing proof of stake vs proof of work: which is better?<\/h2>\n","innerContent":["\n<h2 class=\"wp-block-heading\" id=\"h-comparing-proof-of-stake-vs-proof-of-work-which-is-better\">Comparing proof of stake vs proof of work: which is better?<\/h2>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/table","attrs":[],"innerBlocks":[],"innerHTML":"\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Stats<\/th><th>Proof of work<\/th><th>Proof of stake<\/th><\/tr><\/thead><tbody><tr><td>Security<\/td><td>Secured by computer 'miners'<\/td><td>Secured by 'validators' & 'delegators'<\/td><\/tr><tr><td>Accessibility<\/td><td>Requires certain hardware<\/td><td>Minimum token staking requirement for validators<\/td><\/tr><tr><td>Inflation Rate<\/td><td>Block rewards (inflation) gradually decrease<\/td><td>Can be inflationary or deflationary<\/td><\/tr><tr><td>Token Issuance<\/td><td>New tokens are rewarded to miners who create new blocks<\/td><td>New tokens are issued proportionally to active validators and delegators<\/td><\/tr><tr><td>Hacker Susceptibility<\/td><td>Hackers must control over 50% of the computing power to exploit the network<\/td><td>Hackers must control over 50% of the token supply to exploit the network<\/td><\/tr><\/tbody><\/table><\/figure>\n","innerContent":["\n<figure class=\"wp-block-table\"><table class=\"has-fixed-layout\"><thead><tr><th>Stats<\/th><th>Proof of work<\/th><th>Proof of stake<\/th><\/tr><\/thead><tbody><tr><td>Security<\/td><td>Secured by computer 'miners'<\/td><td>Secured by 'validators' & 'delegators'<\/td><\/tr><tr><td>Accessibility<\/td><td>Requires certain hardware<\/td><td>Minimum token staking requirement for validators<\/td><\/tr><tr><td>Inflation Rate<\/td><td>Block rewards (inflation) gradually decrease<\/td><td>Can be inflationary or deflationary<\/td><\/tr><tr><td>Token Issuance<\/td><td>New tokens are rewarded to miners who create new blocks<\/td><td>New tokens are issued proportionally to active validators and delegators<\/td><\/tr><tr><td>Hacker Susceptibility<\/td><td>Hackers must control over 50% of the computing power to exploit the network<\/td><td>Hackers must control over 50% of the token supply to exploit the network<\/td><\/tr><\/tbody><\/table><\/figure>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>Every consensus mechanism must strike a balance between security and efficiency. On one hand, proof of work blockchains require tons of computing power to operate, which makes them extremely secure but highly inefficient. On the other hand, proof of stake requires fewer physical resources, like energy and computing power, but it also has inherent vulnerabilities that may compromise security.<\/p>\n","innerContent":["\n<p>Every consensus mechanism must strike a balance between security and efficiency. On one hand, proof of work blockchains require tons of computing power to operate, which makes them extremely secure but highly inefficient. On the other hand, proof of stake requires fewer physical resources, like energy and computing power, but it also has inherent vulnerabilities that may compromise security.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>As flawed as the proof of stake mechanism is, it hasn't been an obstacle to the widespread popularity of proof of stake cryptos like Cardano and Solana. Proof of stake is so ubiquitous now that it has given rise to modular proof-of-stake architectures such as Tendermint. Tendermint is an open-source consensus protocol that is byzantine fault tolerant, which means the blockchain will still work even if one validator fails or misbehaves. Some popular protocols that have adopted some form of the Tendermint consensus include Cosmos, Terra, Polygon, and Binance Smart Chain.<\/p>\n","innerContent":["\n<p>As flawed as the proof of stake mechanism is, it hasn't been an obstacle to the widespread popularity of proof of stake cryptos like Cardano and Solana. Proof of stake is so ubiquitous now that it has given rise to modular proof-of-stake architectures such as Tendermint. Tendermint is an open-source consensus protocol that is byzantine fault tolerant, which means the blockchain will still work even if one validator fails or misbehaves. Some popular protocols that have adopted some form of the Tendermint consensus include Cosmos, Terra, Polygon, and Binance Smart Chain.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>Tendermint is an example of how, with the right solutions to the fundamental issues, proof of stake can overtake proof of work as the standard way to secure a blockchain. Meanwhile, Ethereum co-founder Vitalik Buterin is advocating for a slightly different approach. Last year, he co-authored a paper detailing how a hybrid model called Casper works and why it could be a good compromise. Ethereum is currently leading the charge toward proof of stake, with plans to upgrade the network slated for sometime this year.<\/p>\n","innerContent":["\n<p>Tendermint is an example of how, with the right solutions to the fundamental issues, proof of stake can overtake proof of work as the standard way to secure a blockchain. Meanwhile, Ethereum co-founder Vitalik Buterin is advocating for a slightly different approach. Last year, he co-authored a paper detailing how a hybrid model called Casper works and why it could be a good compromise. Ethereum is currently leading the charge toward proof of stake, with plans to upgrade the network slated for sometime this year.<\/p>\n"]},{"blockName":null,"attrs":[],"innerBlocks":[],"innerHTML":"\n\n","innerContent":["\n\n"]},{"blockName":"core\/paragraph","attrs":[],"innerBlocks":[],"innerHTML":"\n<p>Although the idea is still in its infancy, a hybrid model could make sense. If implemented correctly, Casper could offer the best of both worlds\u2014the security of proof of work with the efficiency of proof of stake. Hardware-mined altcoins are falling out of vogue, so newcomers and veterans alike see only the benefits of embracing new blockchain protocols. Although the alternative isn't so eco-friendly, the verdict is still out on whether there's a secure future for proof of stake.<\/p>\n","innerContent":["\n<p>Although the idea is still in its infancy, a hybrid model could make sense. If implemented correctly, Casper could offer the best of both worlds\u2014the security of proof of work with the efficiency of proof of stake. Hardware-mined altcoins are falling out of vogue, so newcomers and veterans alike see only the benefits of embracing new blockchain protocols. Although the alternative isn't so eco-friendly, the verdict is still out on whether there's a secure future for proof of stake.<\/p>\n"]}],"_links":{"self":[{"href":"https:\/\/moneymade.io\/learn\/wp-json\/wp\/v2\/posts\/2535","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/moneymade.io\/learn\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/moneymade.io\/learn\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/moneymade.io\/learn\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/moneymade.io\/learn\/wp-json\/wp\/v2\/comments?post=2535"}],"version-history":[{"count":0,"href":"https:\/\/moneymade.io\/learn\/wp-json\/wp\/v2\/posts\/2535\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/moneymade.io\/learn\/wp-json\/wp\/v2\/media\/2537"}],"wp:attachment":[{"href":"https:\/\/moneymade.io\/learn\/wp-json\/wp\/v2\/media?parent=2535"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/moneymade.io\/learn\/wp-json\/wp\/v2\/categories?post=2535"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/moneymade.io\/learn\/wp-json\/wp\/v2\/tags?post=2535"},{"taxonomy":"post_authors","embeddable":true,"href":"https:\/\/moneymade.io\/learn\/wp-json\/wp\/v2\/post_authors?post=2535"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}