Proof-of-Stake VS Proof-of-Work – Which Crypto Giant Out Of Ethereum and Bitcoin Hosts The Better Consensus?
The consensus a cryptocurrency uses determines how transactions are formed on the blockchain. If a cryptocurrency uses a Proof-of-Stake (PoS) consensus, transactions are confirmed by trusted validators on the network. However, for Proof-of-Work (PoW) blockchains, the crypto miner has to generate a target hash that is less than or equal to that of the block. Miners use devices that generate computations quickly to achieve this.
Bitcoin (BTC), the blockchain industry pioneer, utilizes the PoW consensus. However, Ethereum (ETH), the altcoin leader, has recently switched to a PoS consensus. Each mode of consensus has its merits and its downfalls, and this editorial piece will examine each crypto ecosystem and determine which is better.
Ethereum – Solving Scalability With PoS
Ethereum is undoubtedly one of the most prolific figures in the blockchain industry. The crypto giant has provided explosive returns for its users and recently switched to a PoS consensus to heighten its performance.
PoW was Ethereum’s initial consensus. However, in September 2022, Ethereum switched to a PoS consensus to combat its high energy consumption and low performance. The switch allowed Ethereum to increase its transaction speed to 100,000 per second, improving its scalability!
Another benefit that came from the switch to a PoS consensus was its reduction in energy consumption. The Ethereum platform reduced its carbon footprint by 99.95%, increasing its sustainability and the sustainability of the dApps built on the Ethereum network.
Ethereum’s PoS consensus could have contributed to its recent positive market trend. The platform has increased its market capitalization by 6.16% in the past seven days at the time of writing. This positive trend has brought Ethereum’s market capitalization to an eye-watering $204 billion, showcasing its importance in the crypto market.
The Pioneer Of The Crypto Market – Bitcoin
As many know, Bitcoin is the crypto market powerhouse. The platform has created many millionaires through its explosive growth from its inception. In July 2010, Bitcoin began trading at $0.0008. However, at the time of writing, the coin is worth $23,186.66, with an all-time high of $68,000.
Bitcoin’s dominance is apparent because it was the first cryptocurrency in existence. The platform has survived each bear market that has destroyed other cryptocurrencies, even while utilising a consensus that limits its performance.
It is reported that Bitcoin uses the same energy annually as multiple countries! However, the PoW consensus that Bitcoin utilizes ensures a high level of security for the Bitcoin blockchain.
While PoS blockchains require validators to process transactions, PoW blockchains use miners to add new blocks to the blockchain. Although this method of consensus takes longer, it allows miners to earn crypto rewards in the mining process.
As mentioned above, each mode of consensus has its merits and downfalls. PoS blockchains focus on scalability, sustainability, and overall performance. On the other hand, PoW blockchains focus on security, crypto rewards, and providing a decentralized method of verifying transactions
So, which crypto giant out of Bitcoin and Ethereum hosts the better consensus? In the current state of the world, sustainability is now a priority. This is one of the main reasons why Ethereum has switched to a PoS consensus and why it is now the preferred mode of consensus within the blockchain industry.
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