PoW and PoS - what is it? : TON Tips

PoW and PoS - what is it?

Technologies Proof-of-Work and Proof-of-Stake


Posted by ZOXIONE on 26 May 2021

PoW (Proof-of-Work)  - this is a model for verifying and confirming a transaction during mining. PoW came to mining along with Bitcoin.

The main essence of Pow: the miner needs to solve a certain cryptographic problem, by means of calculations, send the received result for verification to the system, which compares it with the template. If the solution and the template match, the miner receives a reward, the amount of which is fixed.

At the moment, huge computing power is needed to solve one problem, so miners are combined into pools (*you can insert a link to the article about pools, how to treat them and blah blah blah*), where everyone receives a percentage of the reward, which is directly proportional to the computing power spent.

Pos (Proof-of-Stake) - this is a model for verifying and confirming a transaction during mining.

The key difference between PoS and PoW is that you don't need computing power. The transaction is confirmed at the expense of the wallet with this coin. That is, the more coins you have, the more blocks you will solve.

The reward is based on the transaction fee. With PoS, the reward is much less (it is accrued from coins in circulation) than with PoW, but the issue of cryptocurrency does not occur.

Advantages of PoW:

  1. It is used in many, many places and has already been tested;
  2. The impossibility of a DDoS attack on a blockchain using this algorithm.

Advantages of PoS:

  1. Inability to group together to dominate the network;
  2. Impossibility of attack 51%;
  3. Minimal energy costs;
  4. Low transaction fees;
  5. Improved decentralisation of the network.

In blockchains

At the moment, some blockchains use both technologies. For example, the PoW method for initial distribution and the PoS method for transaction confirmation. The overlap occurs because the number of cryptocurrency coins is fixed.

Ethereum uses PoW, but it needs to switch to PoS at this point to solve a number of problems.

Free Ton, on the other hand, uses PoS initially, so new users will be able to start earning. Free Ton is not afraid of the problems associated with PoW. So it is much more promising for new users. They can invest and start earning, or if they just want to work with blockchain they won't have to pay huge fees.