# WHAT IS PROOF

Proof-of-work & proof-of-stake are the most popular algorithms to lớn secure and manage a blockchain, but they both have trade-offs

By

**Luke Conway**/ February 18, 2022, 2:25 pm EST

Proof-of-work & proof-of-stake are consensus mechanisms, or algorithms, that allow blockchains lớn operate securely. These consensus mechanisms keep blockchains secure by allowing only genuine users to add new transactions.

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They work by making potential participants prove sầu they have dedicated some resource, lượt thích money or energy, lớn the blockchain. This feature helps filter out those who may not be genuine or committed lớn the network. The main difference between proof-of-work và proof-of-stake is how they choose who can add transactions khổng lồ the chain.

### Quiông chồng facts:

Proof-of-work and proof-of-stake are algorithms, also known as consensus mechanisms, that help blockchains synchronize data và remain secure.These algorithms determine which node (computer) in the network can add the next bloông chồng of transactions to the chain.Both mechanisms have proven khổng lồ be successful at maintaining blockchains, though they each have trade-offs.## What is proof-of-work?

Proof-of-work is a system where computers compete against each other to lớn be the first to lớn solve sầu complex puzzles.

This process is commonly referred lớn as mining because the energy và resources required lớn complete the puzzle are often considered the digital equivalent to lớn the real-world process of mining precious metals from the earth.

Nathaniel Popper’s book "Digital Gold" uses an analogy to describe proof-of-work in the Bitcoin system:

“It is relatively easy to lớn multiply 2,903 and 3,571 using a piece of paper và pencil, but much, much harder to figure out what two numbers can be multiplied together to get 10,366,613.”

Using this analogy, we can imagine that a miner in Bitcoin’s network must figure out which two numbers can be multiplied khổng lồ reach 10,366,613 by guessing combinations of numbers until it hits the correct answer. Once a computer determines that 2,903 can be multiplied with 3,571 to make 10,366,613, the computer presents the solution khổng lồ the other computers in the network, which can easily verify that 2,903 & 3,571 bởi vì, in fact, equal 10,366,613 when multiplied.

When a miner solves this “puzzle” before other miners, they are allowed to lớn create a new blochồng (a grouping of transactions) and broadcast it khổng lồ the network of nodes, which will then individually perkhung audits of the existing ledger and the new bloông chồng. Should everything check out, the new bloông xã is "chained" onlớn the previous block, creating a chronological chain of transactions. The miner is then rewarded with bitcoins for supplying their resources (energy).

### Proof-of-work, mining and security

Mining requires a great khuyễn mãi giảm giá of electricity and secures the network by ensuring that only those that can prove they have expended resources are granted the right to lớn appover a new mix of transactions to the blockchain.

Because of this feature, it is difficult, time-consuming and expensive sầu to attaông xã a proof-of-work system like Bitcoin’s. Attackers would need to lớn purchase và set up mining equipment and pay for the electriđô thị lớn run the equipment. They would then compete to solve the puzzle và attempt lớn add a bloông xã of transactions containing counterfeit bitcoins lớn the chain.

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Should the nefarious miner successfully solve sầu the puzzle first, they would try to broadcast a new block of transactions out khổng lồ the rest of the network. The network’s nodes would then perform an audit lớn determine the legitimacy of the block and the transactions within it.

As the nodes audit the new bloông chồng against the previous version of the ledger, they would notice the counterfeit bitcoins. The bloông chồng would be considered invalid based on consensus rules.

Proof-of-work makes it impossible khổng lồ counterfeit bitcoin unless a nefarious miner controls more than một nửa of the entire network — this means they must control at least 51% of both the cumulative computing power of miners, known as the hashrate, and the nodes in the network. If they did control more than half of the network, the bad actor could broadcast a bad bloông chồng to the network và have sầu their nodes accept the bloông xã to lớn the chain.

Given how large Bitcoin’s network has grown and how much energy miners contribute to lớn the proof-of-work system, such an attaông chồng would be nearly impossible today.

If a government, company or other entity were to gather enough resources khổng lồ successfully make up more than 50% of the network with the intention of attacking it, the network’s genuine participants would likely create a new branch of the chain, also known as a fork, rendering the previous chain và the attack against it useless.

## What is proof-of-stake?

In the proof-of-stake system, validators (the proof-of-stake equivalent of miners) are chosen to lớn find a bloông xã based on the number of tokens they hold rather than having an arbitrary competition between miners determine which node can add a block.

In this system, the “stake” amount, or quantity of crypto a user holds, replaces the work miners vì chưng in proof-of-work. This staking structure secures the network because a potential participant must purchase the cryptocurrency and hold it to lớn be chosen lớn form a blochồng và earn rewards.

Participants are required to lớn spend money & dedicate financial resources lớn the network, similar to lớn how miners must expend electrithành phố in a proof-of-work system. Those who have spent money on coins khổng lồ earn these rewards have sầu a vested interest in the network"s continued success.

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Proof-of-stake prevents attacks and counterfeit coins with essentially the same mechanism as proof-of-work. Instead of controlling 51% of the mining hashrate & nodes, lượt thích with proof-of-work, attackers of a proof-of-stake system would need khổng lồ hold at least 51% of the coin’s supply & control at least 51% of the network"s nodes.