Proof-of-Work vs. Proof-of-Stake: What Is the Difference

Cryptocurrency uses a mechanism to verify the transactions and then store them in a secure distributed ledger called consensus mechanism. Different types of consensuses are currently playing the carousel role in the market like Proof-of-Stake (PoS), Proof-of-Work (PoW), Proof-of-Identity (PoI), Proof-of-Authority (PoA), Proof-of-Activity (PoA), Proof-of-Capacity (PoC), and many others.

Today we will differentiate the two most widely used consensus Proof of Work – (POW) and Proof of Stake – (POS), both algorithms are used to help the cryptocurrencies run safely and keep the distributed ledger secure and safe.

Here we will discuss both consensus mechanisms one by one and at the end, we would be able to find which one is best!

What is Proof of Work – (PoW)

Proof of Work or (PoW) is an older type of consensus algorithm first used by the bitcoin crypto, it helps to verify the transaction by solving mathematical puzzles. Solving these mathematical puzzles requires more time, power, and computer consumption. All these factors make it less efficient and less reliable but apart from that it archives higher security than POS. More than 300 cryptocurrencies are using this type of consensus, some of them are mentioned here Bitcoin (BTC), Dogecoin (DOG), Monero (XMR), Litecoin (LTC), and many others.

What is Proof of Stake – (PoS)

Proof of Stake – (POS) is a type of consensus algorithm used to verify each newly generated transaction and after verification, it would be stored in the databases or distributed ledger. Furthermore, it helps to create a new block in the entire blockchain. POS utilizes less computational power and the validators have large stake value to verify the transactions. More than a hundred cryptocurrencies using POS of them are mentioned here: Cardano (ADA), Ethereum (ETH), Solana (SOL), Polkadot (DOT), Tron (TRX), EOS (EOS), Cosmos (ATOM), Tezos (XTC), and many others.

Proof of Work vs Proof of Stake

Here we will differentiate both consensuses one by one with the help of a broader view of pros and cons.

Proof of Work – (PoW) Proof of Stake – (PoS)
It achieves strong security than POS It achieves less security than POW
It requires expensive equipment It doesn’t require expensive specialized equipment
It solves the mathematical puzzles to verify each transaction Validator stakes the coins to verify the transaction.
It is less efficient and takes more time and power consumption to validate the transaction It is efficient and takes less time to verify the transactions
Decentralized method to verify the transactions Less transaction fees


Tough competition Less power consumption
Higher transaction fee You need an extensive amount of crypto


Proof-of-Work – (PoW) and Proof-of-Stake – (PoS) both are consensus algorithms used to verify the transactions, POW verifies the transactions by solving mathematical puzzles while PoS stakes the coins to verify the transactions. PoS is more efficient, cheap, and reliable than PoW but it is less secure than PoW.

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