The main difference is that the proof of stake is typically distributed records or ledgers that remove the proof of work element. When one subtracts the proof of work, it removes the most objective physical proof source—making the proof of stake more subjective. Always remember that the proof of work is the actual physical and tangible record.
The thing about proof of stake systems is that they have become a lot more scalable. The more scalable they have become, the more it removes the physical work base’s steady and computational measure.
When it comes to distributing the ledgers, it is based more on mimicking the blockchain and its functionality more than the blockchain setup. The energy expended to show some proof comes in batches of data and streams them together for an appeal that looks like the blockchain. However, all serve to show a particular element of authority in the blockchain design realm. It does not provide purposes like decreasing or increasing the concrete objectivity when it comes to distributed ledgers.
The overarching problem experienced with proof of stake is that when the blockchain has splits or forks (which are typically due to disagreements that happen with a community base), it ends up causing the proof of work miners to have to decide where they’re mining power goes. Instead of having all the mining power go to one focused blockchain, they will be in the turmoil of determining how they will split their mining power, whether it be on the original blockchain or the one that has just been formed.
Splitting the power does not give more opportunities to mine more crypto. It can significantly decrease what can be mind, causing a lack of integrity in the network. Chasing the chance to unearth new money doesn’t look good on behalf of the network.
In a nutshell, this might be one of the easiest ways to understand why proof of stake is less convenient and less secure than proof of work.
What’s the deal with proof of work?
Well, over and over again, it has proved itself to be the most dynamic and efficient way of generating the much-needed blockchain security. Proof of work requires a precise and known amount of energy to figure out the cryptographic puzzle pieces and provides no alternatives to the measures.
Proof of work is data-laden, and it is difficult, time-consuming, and costly to produce. On the miners’ end, it has various levels of difficulty in them verifying and satisfying requirements for solving the “puzzle.” There tends to be a bunch of trial and error when producing these pieces of data. Which, at first, can have a low profitability measure. However, once valid data is made, the profitability increases.
A false assumption about proof of work is that it can’t be efficient. Anyway, that cannot be proved because other components are attached to measuring proof of work that can either be robust or lacking. The overall idea of PoW on its own is powerful. The level of efficiency is dependent upon what else is attached to it.
Let’s talk about some components to help us go more in-depth on the subject:
In the blockchain world, there is a terminology called fault tolerance, which is the number of nodes that happen to be distributed in the network. It can negatively disrupt the flow and system if any people send corrupt information throughout the network to their peers.
Over the years, Bitcoin has found a way to bypass that issue, though it might be better to figure out how to nip this issue in the bud. Bitcoin avoids the problem by employing external physical signal miners; that’s the primary job of sending the network nodes.
In recent years the proof of work has been removed and thus leaves the fault tolerance system at 33%.
An essential foundational security design to bring more security to the blockchain is called full replication of the database. In simple terms, that means that the ledger has much more protection. Why? Because it is copied in a multitude of nodes globally within the network whenever it can be applied.
The full replication system does have its limitations. It is more secure, but the scalability is a challenge. For example, there is some proof of stake networks that have moved away from this format. Cardano and Ethereum 2.0 are one of the most prominent examples of moving away from the replicated structure to a fragmented database called sharding. The sharding database offers scalability that gives networks what they are looking for, but they don’t provide the same security for the distributed ledgers.
The great benefit of social scalability being a part of this process is that it is highly objective. When we bring it down to a personal level, it means that no one can be excluded from using the system because of any prejudice or the human condition. It spells out more equality and less bias for everyone. Pow blockchains have a reputation for being highly objective and can keep the socially scalable aspect globally.
Now, the downside to this is that PoS systems operate on the blockchain. POS systems are not objective. They are subjective and innately lack social scalability. So, stakers in the POS system can easily experience the same type of restrictions, bias, and the human condition as the traditional ones that we’ve always had.
Censorship resistance is the way of the people in this day and age. It is also the central and most favourable aspect of Bitcoin. People love knowing that no third party, corporation, or government has the control to know where their transactions are going and how their finances are stored.
Bitcoin and the blockchain are not owned by any single entity like traditional financial institutions are. So, censorship resistance assures that all the laws and precepts that govern conventional financial institutions are not placed upon this new financial method, even in a retroactive way to alter rules to fit agendas that are not in alignment with the intent of censorship resistance.
It is important to realize that censoring transactions on the blockchain are not completely impossible. It takes a lot of invasive and intensive resources to track transactions, which means to turn most people from trying. However, if someone or an entity wanted to, that can very well happen.
Popular Proof of Stake fallacies
It has already been proven that proof of work is a more robust measure than Proof of Stake. However, there are still some fallacies about proof of stake that need to be cleared up.
Staking is perfection in computer science and innovation.
When it comes to the PoS community, there is no innovation involved or any kind of breakthrough computer science. Actually, if you compare the central banking system with PoS, there are really not too many differences. The facets that are similar are minimal capital requirements, processing transactions, following licensing rules, security deposits, and basically anything else that is common to how a central banking system works.
What are the mathematical gimmicks about?
There is plenty of proof of stake projects that are on purpose, designed with high complexity mathematical structures and algorithms. The main motivation behind such complex mathematical structures is to basically cover up the lack of security that is found in their systems. The hope is that the complex mathematical models bring about an appeal that looks more complex and secure than it really does.
Sneaky proof of stakes are okay
Actually, it’s not okay. Basically, this means that proof of work is an external operation. This is what the miners run. Proof of stake is solely involved on the inside with the ledgers. In simple terms, it means that the full-scale nodes are not able to get rid of the stakers in the POS system even if there is a split. What this tells us is that the point of stake is not totally censorship-resistant and that the sensors within cannot be disposed of.
Staking is the investment that sunk.
The truth about staking is that they’re really actually not such a thing as staking. Okay, not in the way that we tend to think. The proof of stake world, staking really isn’t that real. Really, all it is is a group of well-informed, trusted Rich participants that control the whole system. So why do we acknowledge staking? Well, the true and false of it is that the miners are the ones that do the real staking business. They are the ones that do sync the equipment, data centers, electricity and recover investments after years of work. It can take years for minors to recover their investments in mining materials. All the reasons above prove who the real stakers are on this side of the industry.
The blockchain and distributed ledger are synonymous
That is not correct. That would be more correct for the proof of work structure. Proof of stake only mimics the processes, models, and structures of blockchains. They do this to look more appealing and authoritative to consumers. In reality, proof of stake is simply just distributed in larger networks. Blockchains can be distinguished by their complexity, expensive machines in manpower to do the mind-blowing and complex computing that marks the proof of work side of things. On the flip side, proof of stake is actually not that complex, cheap to run, and rather trivial in their constructs.
Voting is crucial
The importance of voting shenanigans again that this is just another way that proof of stake tries to be on the same level as blockchains. The voting mechanisms that are found in the midst of proof of stake projects try to cover up their very insecure structures and models. It tries to appear on the authority side of democracy or about power. If you know the ins and outs of both proof of work and proof of staking, you will know off the bat that that type of modelling is not secure and is not innovative.
Honest and true blockchains avoid going that way because of this lack of security. The voting system does not at all suit the mechanisms and technological movements of the blockchain. Unfortunately, it just does not complement the sound engineering techniques that are required for the blockchain to work the way that it does.
So just for a simple recap, we can see that proof of stake is a lot less secure and stable than proof of work. Proof of stake mimics the blockchain and uses complicated mathematical models to appear more sophisticated than it actually is. Proof of stake is also very subjective in nature, which leaves room for confusion and instability.
Proof of work is based on the actual blockchain. There is no mimicking. It is objective in nature. Its main objective is that the nodes on the blockchain are able to validate all of the transactions that come through with the helping hands of miners. Powerful computers are used in operation to complete the transactions and to block spam attacks, as well as Distributed Denial of Service Attacks.
At the moment, the only way that the proof of stake could become more secure is if proof of work blockchains had a mixture of objective and subjective systems. What could happen is that combo could be weaved into the distributed ledgers of the proof of stake systems. Which in turn, would provide higher levels of security. Until that happens, proof of work will be your most solid and secure means.