Symbiosis instead of dichotomy
Proof of Stake (PoS) and Proof of Work (PoW) are the two most popular protocols for reaching consensus in blockchain networks. The fundamental difference between PoW and PoS is where the miner receives the reward. The task of both protocols is identical: to provide safety and reliability of a network, but methods are still different.
Instead of having to make a choice in favor of any protocol, wanting to take advantage of one, but miss the benefits of another. In the blockchain BeeNode we use both protocols. The combination of two mechanisms: PoS and PoW allows you to provide network users with the benefits of two technologies. Due to this symbiosis, the blockchain works much more reliably, and the mining becomes more optional and profitable.
Proof of Work Protocol Description
Both protocols have advantages and disadvantages. Before comparing them, let's understand in detail the features of each. Let's start with the most common — Proof of Work. PoW is the basis of the first and most popular blockchain — Bitcoin.
However, the mechanism of the Protocol Proof of Work is not a product of cryptocurrencies, it first appeared before the first cryptocurrencies. Cynthia Yard and Moni Naor proposed the concept in 1993, according to the authors, the Protocol was to protect the system from attacks due to the fact that access to any resource would be granted only after an intensive task would be solved. The term PoW itself appeared only in 1999.
DDoS attacks. In modern blockchain networks, PoW can be represented as a kind of competition: the network gives the task — to solve a complex mathematical problem, and miners take up the solution. The one whose equipment is the first to find the right answer will receive a reward.
In the Bitcoin network, as in the networks of other cryptocurrencies, PoW is used to generate new blocks and ensure security. The process of searching for blocks itself is accidental: out of thousands of miners, anyone can find a new block in the network, but not only he, but all other miners are rewarded according to the efforts that were made to search.
Proof of Stake Protocol Description
Unlike PoW, the Protocol Proof of Stake is a purely cryptocurrency mechanism, which appeared relatively recently. The PoS Protocol was proposed in 2011 at one of the forums dedicated to cryptocurrency. In 2012 appeared the first coin that uses this mechanism of mining in the blockchain.
In Proof of Work blocks are those whose equipment is more powerful and faster solves complex mathematical problems, and in Proof of Stake the greatest probability to find a new block in those nodes that have a greater share of coins. Nodes that own a large proportion of coins and thus receive a reward for the discovery of new blocks, called masternodes.
The advantage of the PoS-Protocol is that the extraction of coins does not consume enormous energy resources for the extraction of coins. No special equipment is required for mining, it is enough to own a certain share of coins in your wallet.
By and large, masternodes are a kind of PoS-mining. This mechanism also implies that the owners of coins act as guarantors of security and safety in the network, but there are several differences.
First, the creation of a masternode itself requires compliance with several conditions. In PoS-mining rewards can get every coin owner. To create a masternode coin owner need a certain and often a large number of coins.
Secondly, the masternodes do not open new blocks by themselves and do not get rewarded for it. Master nodes serve blockchain participants, providing them with various services: hosting, instant transactions, anonymity, and so on. For these services, the owners of the masternodes receive a commission.
Why beenode blockchain combines PoW and PoS
Despite the fact that the protocols are not similar and most experts oppose one another, the developers of the BeeNode blockchain decided that the combination of these protocols is the best option for ensuring the stable operation of the network.
POS and PoW protocols are vulnerable to 51% attack. To carry out such an attack in a network with PoW you need to own more than half of the computing power, and to carry out such an attack in the PoS-network you need to buy and hold more than half of all coins in your wallet. Both attacks are difficult to carry out, but real. With a combination of PoS and PoW attack 51% becomes almost impossible, which protects the blockchain.
The BeeNode blockchain takes the best from both protocols. Due to the use of Proof of Work, it is almost impossible to attack the network, and due to the cost of electricity, an additional value of coins is created, and the rate of the crypto currency is growing. In addition, the Proof of Stake Protocol also helps to build up the rate: the more coins are stored in the wallet, the greater the chance to open a new block and get rewarded, so people are constantly striving to purchase coins, create demand and push the rate up.
Both protocols have advantages and disadvantages. However, the combination of the two mechanisms makes it virtually impossible for blockchain-network BeeNode flaws and greatly enhances dignity, making the blockchain is fast, reliable and safe.