Topic: Whats the different POW and POS algorithm ? (Read 337 times)
The wiki article is a pretty good explanation. Basically, in Proof of Work a person/pool's chance of mining a block is determined by how much computing power they dedicate to the network. In Proof of Stake however, a person's chance of let's say "creating" a block is determined by their stake in the coin (how much they hold). This doesn't necessarily prevent centralisation but it does encourage re-investment in the cryptocurrency so that people don't cash out to fiat straight away. There are also hybrid systems like what Ethereum is starting to move towards for now.
Im new to enter the cryptocurrency world so I would like to ask how POW and POS algorithm work. Why is POS algorithm outstanding than POW?
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