Proof of Stake vs Proof of Work

Updated on March 11, 2024
Article byWallstreetmojo Team
Edited byAshish Kumar Srivastav
Reviewed byDheeraj Vaidya, CFA, FRM

Difference between Proof of Stake and Proof of Work

Proof of stake (POS) and proof of work (POW) are both consensus mechanisms, but they differ in energy consumption and level of safety. POW consumes too much electric power. Proof of stake power consumption requirements is lesser than proof of work, making it a greener alternative.

Let us look at the two concepts to dig deeper into the layers of proof of work vs proof of stake debate.

Proof of Work vs Proof of Stake

What is Proof of Work?

Proof of work is a consensus mechanism used in cryptocurrency. It authenticates a transaction without relying on a central authority. This transaction is validated on a blockchain, a type of electronic ledger that records all the transactions. Each transaction is recorded as a new block and is added to the blockchain. Following are some crucial points regarding proof of work mechanism –

  • One of the most popular applications of POW is made by bitcoin. The blockchain system contains many members in its network who participate through nodes. A bitcoin node is any computer that runs a bitcoin implementation and stores the entire blockchain.
  • Each transaction is authorized and validated by solving complicated mathematical problems. This process of solving complex mathematical problems is called mining. 
  • The miners compete with each other; the first one to solve gets rewarded. They are paid in the cryptocurrency they are approving. This mode of payment is referred to as block rewards.
  • Solving these complex mathematical problems requires a powerful computer. The increase in computing power also increases the electricity consumption. So, only the most powerful computer manages to solve the math before everyone else and wins the mining contest.
  • For hacking the proof of work consensus mechanism, the hacker’s computer needs to surpass 51% of the network’s computational power. To breach the POW, hackers need to spend a lot of money on the computer. For smaller networks, it is easier.
  • Once a node hacks a network, it can authenticate spams and fraudulent transactions as well as mess with previous transactions.

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What is Proof of Stake?

Proof of stake is another consensus mechanism. In POS, instead of miners, there are validators. They are also known as forgers. Since there is no mining competition, powerful computers are not required for POS. The considerable drop in the cost and energy-saving nature on a comparative scale are some key advantages of POS. Let us look at proof of stake in more detail below –

  • Instead of mining, here the validators possess certain amount of stake in the network. The validator or the node with a higher stake is chosen by the POS protocol to validate a transaction. In return, the validator gets a fee for every transaction.
  • POS is considered a safer mechanism than POW as the hacker needs to own 51% of a network. Such a breach is possible but improbable. Besides, it will be very expensive to hold that much stake.
  • Cardano is a popular POS blockchain platform. Ethereum has also been making news for its decision to switch to POS from POW.
  • As per a report, bitcoin’s software that functions on POW required as high as 22 terawatt-hours in 2018.

POW vs POS Infographics


Proof of Work vs. Proof of Stake

Validating nodesMinersValidators/Forgers
Energy consumptionVery highComparatively low
ConsiderationBlock rewardsTransaction fee
HackingHacker would need 51% computational powerHacker would need a 51% stake
SafetyEasier to hackHarder than POW

This has been a guide to Proof of Work vs Proof of Stake. Here we discuss their top differences along with infographics and a comparison table. You may also have a look at the following articles –

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