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Author Topic: Whats the different POW and POS algorithm ?  (Read 280 times)
kawasaki5050
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May 09, 2017, 08:09:40 AM
 #1

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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Iranus
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May 09, 2017, 08:36:45 AM
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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.

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