Quote from: Alphazet on March 30, 2024, 10:20:23 PM

I'm a newbie and wonder
What is the fundamental difference between Proof of Work (PoW) and Proof of Stake (PoS) ?

Before knowing the difference between these two, you first know that these two are the types of consensus mechanisms. Now what consensus mechanism is: it's a set of rules that allows all participants of the blockchain network to agree on the current state of the blockchain. So considering this definition, these two POS and POW are mostly used, there are many other types of mechanisms that also exist, but as I said these are mostly used. So, the basic difference between them is.

POW (Proof of Work) mechanism requires computational power, while POS (Proof of Stake) requires staking of cryptocurrency. POW requires more energy while POS doesn't require energy as its assets (virtual) based. POW is older then POS, but POW is slower then POS. POW is better then POS in terms of equability, like in POW rich don't get richer, everyone can participate, but in POS only those will earn blockreward who will stake more funds in the blockchain. Most projects based on POW are decentralized, while on POS they are not.