Proof of Stake vs Proof of Work

Article byWallstreetmojo Team
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 cryptocurrencyCryptocurrencyCryptocurrency refers to a technology that acts as a medium for facilitating the conduct of different financial transactions which are safe and secure. It is one of the tradable digital forms of money, allowing the person to send or receive the money from the other party without any help of the third party more. 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 –

What is Proof of Stake?

Proof of stakeProof Of StakeProof of Stake (PoS) mining is a consensus mechanism that validates blocks and transactions to secure a Cryptocurrency blockchain. In PoS, coin owners stake their coins to become a validator. Unlike the proof-of-Work (PoW) system, where users compete for their chance to append the blockchain, validators are selected at random in PoS depending on the user’s more 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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