Crypto FAQ: What are pros & cons of Proof-of-Work (PoW) vs Proof-of-Stake (PoS) blockchain consensus algorithms?
Pros and Cons of Proof-of-Work include:
- PROS:
- Incentivized cryptocurrency rewards for miners
- Transaction validation is decentralized
- Generally secure
- CONS:
- Expensive equipment needed
- Energy-intensive
- Slow TPS and higher transaction fees than PoS
Pros and Cons of Proof-of-Stake include:
- PROS:
- Doesn't require expensive equipment
- Energy-efficient
- Faster TPS and lower transaction fees than Proof-of-Work
- CONS:
- Largest stakeholders have the most influence over the blockchain
- Incentivizes coin hoarding
- Requires extensive up-front investment in the cryptocurrency
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