Proof of Work is dead; Long Live Proof of Stake | Medium

Relax, proof of work (PoW) is not dead, but it is true that many projects in the cryptocurrency world are becoming more enthusiastic about proof of stake (PoS). We agree with this overall trend, and would like to provide some explanations as to why. To start, we will briefly explain what mining is. Then, we will give a brief overview of why proofs exist. Finally, we’ll dig into the differences between PoW and PoS.

What is Mining?

Mining is the process that keeps a blockchain network moving. In crypto, mining is often seen as race to see who can create the next block the fastest. The node(s) who propose the correct block first gains the block reward.

PoW is a consensus mechanism in which nodes are essentially solving complex math problems. Solving the PoW scheme requires large amount of computing power, which is expensive. We will dig in to this later.

Ultimately, miners facilitate transactions and maintain integrity in the blockchain ledger. The basic steps to mining are clearly outlined in the Bitcoin whitepaper. Verbatim from the whitepaper, the steps are as follows:

“1) New transactions are broadcast to all nodes.

2) Each node collects new transactions into a block.