Proof of Work is a model in which miners use their computers’ processing power to verify transactions in the blockchain. They are then rewarded for the “blocks” of verified transactions they create. This creates a system in which miners with the most processing power are able to mine the most. You work, you get rewarded.
However, this means that outside influencers can come out of the blue and mine large amounts of currency, provided they have enough money to buy more processing power. It creates the potential for a “51% attack”, which refers to the fact that if an individual or group owns over half of the processing power of the blockchain, they can subvert it to their own ends.
Proof of Stake is a model that allows you to mine an amount of a currency, equivalent to the stake you hold in it. It rewards people who hold stakes in the currency, over those who do not. It also makes a 51% attack less likely, and less damaging if it were to occur.
The Proof of Stake system minimizes waste of processing power and harnesses it more efficiently. This shareholder-type method will reward those who hold onto the currency, which works great for balancing systems such as Ethereum, which will eventually tend towards inflation. This would make them a more stable currency and thus more appealing for adoption by the average consumer.
Do you think Ethereum's switch to Proof of Stake will be good for the currency? Let me know what you think about Proof of Work versus Proof of Stake in the comments below. As always, if you enjoyed this article, please upvote, follow, and resteem!
Spacecadet1