You can imagine the blockchain environment like a classroom without a teacher, how can the class agree on what the correct answer is? That is the problem that the Consensus Mechanism needs to solve.
🔸 In the Crypto world, the 2 consensus mechanisms are PoW and PoS, regarded as the 2 kings ruling the world.
Proof of Work (PoW) is simply a competition of computational power. Miners compete to solve equations. Whoever has the strongest machine, consuming the most electricity to find the answer will be the one allowed to record it.
👉 The characteristic of this mechanism is extremely secure but slow and energy-consuming.
Proof of Stake (PoS) or Stake proof. Typically applied in Ethereum. This is the game of staking trust. You lock or stake your money to gain validation rights. If you cheat, that money will be confiscated.
👉 The characteristic of PoS is that while it is fast and energy-saving, it is easily concentrated in the hands of the wealthy.
🔹 The consensus mechanism is not just technology; it is also an economic barrier. It is designed to ensure that:
The cost to attack the network is always higher than the amount of money that can be stolen.
The fraudster will be bankrupt before they can cheat.
Between PoW and PoS, which mechanism do you prefer?
The information in this article is for reference only and is not investment advice. Please read carefully before making a decision.
