Proof of Work vs. Proof of Stake: Beginner's Guide!! 👨‍🏫

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📺Essential Videos📺

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- TIMESTAMPS -
0:00 Intro
1:51 Cryptocurrency Consensus Explained
5:51 What Is Proof Of Work?
10:24 What Is Proof Of Stake?
13:42 PoW: Strengths & Weaknesses
16:32 PoS: Strengths & Weaknesses
21:05 Conclusion: Which Is Better?

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⛓️ 🔗 Useful Links 🔗 ⛓️

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👨‍🏫Cryptocurrency Consensus Explained👨‍🏫

Consensus in cryptocurrency follows the same idea as consensus between people. The difference is it’s computers coming to a consensus AKA an agreement about whether a transaction is valid or not. Usually, the consensus threshold in cryptocurrency is more than half, or 51%

⛏What is Proof of Work?⛏

Any computer that wants to process transactions on a proof of work cryptocurrency blockchain like Bitcoin needs to solve a complex equation to earn the right to do so. This costs time and energy to do

If this sounds tedious and arbitrary, it’s because it is. This idea of work exists exclusively as a means of protecting a cryptocurrency from manipulation by the computers connected to its blockchain

💰What is Proof of Stake?💰

Instead of using large amounts of computing power and energy to solve an equation to process transactions, a cryptocurrency coin is staked i.e. locked on the blockchain to earn the right to do so

The length of time a cryptocurrency must be staked to process transactions can vary, as can the minimum amount of coins or tokens a computer must lock up as stake

Logically, the more cryptocurrency you stake, the more likely you are to process transactions and create a block

⛓PoW: Advantages and Disadvantages⛓

In theory, anyone can connect their computer to a proof of work cryptocurrency to process transactions and earn cryptocurrency as a reward for doing so

However, over the years companies have developed specialized computers called application specific integrated circuit machines or ASICs for short. This is gradually centralizing PoW cryptocurrencies

What’s worse is that when a new and improved ASIC is released, the older model usually ends up in a landfill, and this is one of the many environmental concerns about proof of work cryptocurrency mining

💱PoS: Advantages and Disadvantages💱

In theory, anyone can connect their computer to a proof of work cryptocurrency to process transactions and earn cryptocurrency as a reward for doing so

This is facilitated by the minimal hardware and energy requirements to participate in most proof of stake cryptocurrency blockchains

However, most proof of stake cryptocurrency blockchains have high thresholds when it comes to the minimum stake you need to put down to connect to it as an independent computer

Moreover, most proof of stake cryptocurrencies had something called a premine which is where a bunch of coins or tokens are minted in advance and distributed to the team and large investors

Consequently, most proof of stake cryptocurrencies are more centralized than Bitcoin and Ethereum since the average user is stuck delegating to a validator or staking pool belonging to the team and VCs

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📜 Disclaimer 📜

The information contained herein is for informational purposes only. Nothing herein shall be construed to be financial legal or tax advice. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Trading cryptocurrencies poses considerable risk of loss. The speaker does not guarantee any particular outcome.

#bitcoin #blockchain #consensus #staking #mining #pos #pow

[cryptohair]

Ah the biggest crypto channel on the inter-webs.

[yb]

Welcome to coin bureau, the largest crypto channel in the whole inter-webs, add free, transparent and no clickbait titles like other (small) crypto channels ;) Finally!

[stoempert]

BitBoy can't handle this channel being the biggest 😂

[korswe]

Proof of stake is not new. It’s called fiat money. People with lots of money gets to make the decisions. Proof of work is new.

[JYTE]

Congrats, ... the largest crypto channel by subscribers. :) Btw, BitBoy might not like this so much. 😂

[GuyinaCoffeeCup]

Bitboy from " largetst crypto channel" to "largest crypto community" . lol CoinB is the largest crypto channel and community in all of interwebs

[natusfreedom]

Bitboy, should stop, saying his channel is the biggest crypto channel, that’s false advertisement lol

[Admin-dr]

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I discovered that depending on salary was waste of time, I have make huge earnings from investment i made on trade and I know more is yet to come

[alekgj]

Congratulations!!!
Your channel is the # 1 crypto channel, you passed BitBoy!
Well done, you deservedly.

[evanmichaels]

80, 000 more subscribers than Bitboy!!

[可可韩]

Proof of Work vs. Proof of Stake: Beginner's Guide!! man_teacher

[cointechiecrypto]

any proof of stake blockchain with fair launch???

[lynxlagoon]

Kadena is PoW and can do 480, 000tps, why is no one talking about this

[JonasLekevicius]

Not your best video. Conflating many unrelated issues. Consensus mechanisms can and should be compared, but most of "pros and cons" are not related to consensus mechanisms. For example, pre-mine has nothing to do with consensus. Neither does blockchain size, it's unrelated.

Instead, there are more important, consensus related problems that should have been discussed. Stake means hacker is risking its own reward -- that seems worth a mention? Delegation introduces social lag to attacks. Etc.

[avaamelia]

Trading stocks is profitable but trading Bitcoin now is more profitable than stocks

[fitnessforever]

Thanks Guy..please do a vid on the 'Types of Pos' we have in the space and explain in a nutshell how they work/are secured nd the differences between them.. E.g Pos, SPos, NPos, PPos etc.

You can explain concepts of each and match some examples to them 🌟🙏🏆

[derek.seaborn]

It’ll be interesting to see how well proof of stake holds up when huge amounts of money are at… stake. In other words, in my opinion PoS has not been proven to be effective.

[aryan]

Simple. POW and POS are Sybil mechanisms. Sybil mechanisms are used to prevent people from creating multiple identities and take over the network. POW uses hash power, POS uses stake power as a limited resource.

[WikiTicky]

How many asic silicon manufactures are there? If you have to buy specific hardware... that's centralized. If you have to be next to cheap power... that's centralized.

[eddymoffis]

Trading systems allow you to limit the factor of emotional influence on decision-making,