What is the difference between proof of work and proof of stake?
Proof-of-work is a piece of data which is difficult to produce but easy for others to verify and which satisfies certain requirements. Proof of stake is a proposed alternative to proof of work. With proof of stake, the resource that's compared is the amount of Bitcoin a miner holds.
With proof of work the probability of mining a block is dependent on how much work is done by the miner. With proof of stake, a person can mine depending on how many coins they hold.
With POW, the payout becomes smaller and smaller for Bitcoin miners. There's less incentive to avoid a 51% attack. The POS system makes any 51% attack more expensive.
Proof-of-work requires high computing power, which means hardware which is expensive. With proof of steak, there's no need for expensive hardware.
Proof-of-work requires more electric power while proof of stake is energy efficient.
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