How Proof of Work OperatesIt relies on miners using computational power to solve puzzles & validate transactions. This ensures security but demands vast energy resources, making it inefficient at scale.
The Limitations of Proof of WorkBitcoin mining consumes more energy than some countries, raising environmental concerns. Also, expensive hardware requirements push out individual miners, leading to network centralisation.
How Proof of Stake FunctionsProof of Stake selects validators based on the amount of cryptocurrency they stake as collateral. This method reduces energy consumption and increases transaction speed without requiring costly mining equipment.
The Drawbacks of Proof of StakeThis system may favor wealthier participants who can stake more, centralising power. Also, as a newer approach, it is less battle-tested than Proof of Work, raising security concerns.