If you have delved into the world of cryptocurrencies, you most likely have heard of these two terms: Proof of Work or Proof of Stake.
Proof of Work and Proof of Stake are the most common algorithms which are used in establishing the consensus within digital currencies, such as Bitcoin and Ethereum.
In today’s article we will be exploring what are these algorithms, their differences and how do they apply to their network.
What Is Proof Of Work (PoW)?
Proof of Work is a computer algorithm that is used in cryptocurrencies to reach a decentralized agreement when adding a new block to the blockchain. The concept first appeared in 1993, but the term was coined in 1999. The examples of cryptos that use PoW are Bitcoin, Ethereum, and Litecoin.
Miners verify transactions which are then added to a block. This process is called mining. But, in order to include the transaction in the next block, the miner needs to know the cryptographic hash value of the last recorded block and its status.
In order to find the hash of the last block,…