3.47K viewsEthereumProof Of Stake

Why proof of stake is better? Compared to proof of work.

Dan Gilbert Answered question August 1, 2018

There are several advantages that proof of stake have over traditional proof of work, for instance :

Energy Efficient:
Proof of stake eliminate the need to consume huge quantities of electrical energy in order to secure a blockchain (eg. it’s estimated that both Bitcoin and also Ethereum mining activity consume over $1 million well worth of electricity as well as hardware costs daily ).

More Secure Network:

  1. A more secure network as attacks become very costly: POS provide a stronger economic barrier for attack and also additional motivation to keep the participants honest. It is a lot more costly to acquire 51% of the coins compared to purchasing 51% of the computation power ( in the case of proof of work ). When you get a lot of coins, this makes its price increase and appreciate as well so as you try to buy more coins, it will gradually become more expensive to do so.
  2. For Proof of Work you can theorectically try to cheat the system infinitely until you eventually succeed, however for Proof of Stake, if the attack fail, you will lose all your stake which essentially make it difficult and more expensive to repeat the process.
  3. Even if you have successfully hack the system via a 51% attack, the system would worth nothing and leave you with coins that is practically worthless. While in the case of Proof of Work, you might still have PCs or hardwares which you can sell or use.
Dan Gilbert Changed status to publish August 1, 2018