Login to your account

Username *
Password *
Remember Me

Create an account

Fields marked with an asterisk (*) are required.
Name *
Username *
Password *
Verify password *
Email *
Verify email *
Captcha *
Reload Captcha

Proof of Stake v Proof of Work Featured

Written by  May 04, 2020

Ethereum's underlying protocol will be changed from Proof of work to the Proof of stake protocol, but how many of us actually know what that means?

What are the core distinctions between the two? Furthermore, what makes one better than another?

Proof of Work

PoW was initially published in 1993 by Cynthia Dwork and Moni Naor, and it was really given a purpose in 2008 when Satoshi Nakamoto published his paper “Bitcoin: A Peer-to-Peer Electronic Cash System” creating the blockchain and the cryptocurrency called Bitcoin.

PoW can provide a distributed consensus, meaning that it is not necessary to trust and rely on now middleman like MasterCard, PayPal or Banks when discussing transactions, due to the fact that they keep registers with information about for every account. You can remove them altogether, gaining speed, efficiency and transactions at lesser fees.


When we are talking about PoW we can also underline the well-known concept of “mining” the process when computers are linked into a network in order to solve various mathematical problems to verify the legitimacy of each and every block in the blockchain and make new coins.

The difficulty of mining is underlined by its competitive nature, making it necessary to add more computing power to the network, the higher this parameter is, the higher the chances are for the miner to get rewarded by the system with coins.

Also, there are mining pools, people that are teaming up in order to increase the chances of mining a new block and also collecting the reward.


The process of mining has its pros and cons, miners help by adding processing power to the network in order to maintain the positive balance within the blockchain.

The main issue of it is the costs that are involved for each block creation, which is large, depending mostly on the processing power of each miner’s machine and it requires massive consumption of energy, it is not cost-effective.

According to recent studies, Bitcoin miners alone use approximately 54 TWh electricity, enough to power 4 million households in the UK.

Proof of Stake

On the other hand, PoS aims also to establish consensus on the blockchain, the overall process remains the same as PoW, but reaching the end goal is totally different.

In the case of PoS, the entire process of creating a block is done virtually, and on PoS based cryptocurrencies, the creator of books is no longer called “miner” but “validator”, in order to become a validator the system automatically selects a candidate based on a quasi-random way depending on the users capital also defined as “stake”.

In general, the bigger the stake the bigger the chances are for the node to become a validator. but choosing the validator depending entirely on the stake will favour the wealthy so it was necessary to add alternative methods of selection, depending on the age of the coins staked, meaning that the longer the coins stay in that deposit, the more likely the possibility to be rewarded by the system.

Another method is Randomising block selection where the validators are selected by searching for nodes including a combination of the lowest hash value and the highest stake since the size of stake is visible to all in the blockchain the next validator or “forger” can be easily predicted.

In order to participate in the process of creating a new block, the coins have to be held as a stake for a minimum of 30 days.



The main advantages of using PoS rather than PoW are that they are environmentally friendly and also cost-effective, electricity and hardware costs are much lower than the costs associated with the PoW protocol. Being less stressful, more people are added to the system creating more nodes and making the system more decentralised.

If you are new to the Cryptocurrency world and would like to open an account we recommend Cex.io.

Do you find this article useful? Comment below or follow us on Facebook or Twitter.

Simon Billings

Simon has worked for many years in crypto markets for the likes of BT and Cisco, developing his skills and experience along the way. He still works on projects and happily for us finds time to sharing his knowledge on Cyber Savvy UK.

Leave a comment

Make sure you enter all the required information, indicated by an asterisk (*). HTML code is not allowed.

Follow Us


Help and Advice

May 06, 2020

Beginners Guide To Cryptocurrency

Cryptocurrency has been around since 2009 and has grown in popularity ever since. But if you’re a beginner in the cryp...

Feb 10, 2020

Tips To Trade The Volatile Crypto Market

The expected economic impact of the coronavirus has resulted in crashing stock markets across all the globe. ...

May 08, 2020

What is Cryptojacking?

'Cryptojacking' is a term used to describe the action of secretly using a computer to mine cryptocurrency for profit. ...

May 26, 2020

Ways to invest in the cryptocurrency market

Bitcoins huge price movement back in 2017 attracted many investors who wanted to profit from the emergence of this new d...

May 11, 2020

What is an ICO?

An ICO stands for Initial Coin Offering, it is a method for teams to raise funds for a project in the cryptocurrency spa...

Jun 24, 2020

The difference between Bitcoin, Altcoins and Tokens

The cryptocurrency market is well established, but then there are new people discovering the benefits of crypto trading ...

Feb 20, 2020

How VPN Services Protect Your Data

Wherever you are, a virtual private network is still one of the best ways to secure your crypto data on the internet. ...

Jan 31, 2020

Tips on keep your mobile banking apps secure

If you are buying and selling cryptocurrency and need to fund your investments or withdraw your money, it always pays to...

Jan 13, 2020

Be wary of shoulder surfing

When you are trading in the office this is rarely a problem as you know your colleagues and you are in an enclosed envir...

May 11, 2020

How to protect your Gmail account

Technology is constantly changing and at a pace which is hard to keep up with, but 'safety first' always applies. ...

Apr 06, 2020

Every new crypto computer needs protecting

All those crypto files you’ve saved through the years that you can’t remember what they are? Goodbye, it wasn’t me...

Feb 07, 2020

Is 2 Factor Authentication Enough?

The technology and security controls in every example is different and therefore, the time, effort, and cost required to...

Jan 08, 2020

What you need to know about filing Crypto taxes in the UK

For some time, Governments across the world have been cracking down on crypto taxes.

Feb 21, 2020

Proton Mail: The Best Secure email Provider there is

Proton Mail offers a comprehensive level of security, while also locating its data centres ‘underneath 1000 meters of ...

Jan 15, 2020

How to secure your router from Cyber Attacks

Hackers nowadays are seen using routers as botnets to launch cyber attacks on large companies and organisations. ...

Feb 17, 2020

What is a Trojan?

As the name suggests, Backdoor Trojans are designed to grant an external user full control over a system by creating a b...