Proof of Work and Proof of Stake

When we talk about PoW and PoS we mean protocols used to protect and operate a cryptocurrency network.

In a PoW system, such as Bitcoin and Ethereum, transactions are confirmed and recorded by miners. In a PoS system, instead of miners, there are validators. They verify transactions by locking up (in technical terms “stake“) a certain amount of their crypto. Both miners and validators receive reward and transaction fees.

PoS requires very little energy to run, a PoW system has a greater environmental impact. For this reason we could consider the first one as the future. However, it’s still largely untested, at least on the scale of PoW, which has seen over a decade of testing on the popular Bitcoin network.