What do POS and POW mean?
What is the difference and what is the influence on the coin in question?
Thanks in advance
POW:4.
Proof-of-WorkTo implement a distributed timestamp server on a peer-to-peer basis, we will need to use a proofof-
work system similar to Adam Back's Hashcash, rather than newspaper or Usenet posts.
The proof-of-work involves scanning for a value that when hashed, such as with SHA-256, the
hash begins with a number of zero bits. The average work required is exponential in the number
of zero bits required and can be verified by executing a single hash.
For our timestamp network, we implement the proof-of-work by incrementing a nonce in the
block until a value is found that gives the block's hash the required zero bits. Once the CPU
effort has been expended to make it satisfy the proof-of-work, the block cannot be changed
without redoing the work. As later blocks are chained after it, the work to change the block
would include redoing all the blocks after it.
The proof-of-work also solves the problem of determining representation in majority decision
making. If the majority were based on one-IP-address-one-vote, it could be subverted by anyone
able to allocate many IPs. Proof-of-work is essentially one-CPU-one-vote. The majority
decision is represented by the longest chain, which has the greatest proof-of-work effort invested
in it. If a majority of CPU power is controlled by honest nodes, the honest chain will grow the
fastest and outpace any competing chains. To modify a past block, an attacker would have to
redo the proof-of-work of the block and all blocks after it and then catch up with and surpass the
work of the honest nodes. We will show later that the probability of a slower attacker catching up
diminishes exponentially as subsequent blocks are added.
To compensate for increasing hardware speed and varying interest in running nodes over time,
the proof-of-work difficulty is determined by a moving average targeting an average number of
blocks per hour. If they're generated too fast, the difficulty increases.
Proof-of-stake is a method of securing a cryptocurrency network through requesting users to show ownership of a certain amount of currency. It is different from proof-of-work systems that run hashing algorithms to validate electronic transactions. It is most commonly used as a supplement to proof-of-work in Peercoin and a few other electronic currencies.
Proof of Stake is a proposed alternative to Proof of Work. Like proof of work, proof of stake provides a mechanism for determining who signs bitcoin transactions (see "main" bitcointalk thread, and a Bounty Thread).
It was probably first proposed here by Quantum Mechanic. With Proof of Work, the probability of mining a block depends on the work done by the miner (e.g. CPU/GPU cycles spent checking hashes). With Proof of Stake, the resource that's compared is the amount of Bitcoin a miner holds - someone holding 1% of the Bitcoin can mine 1% of the "Proof of Stake blocks".
Some argue that methods based on Proof of Work alone might lead to a low network security in a cryptocurrency with block incentives that decline over time (like bitcoin) due to Tragedy of the Commons, and Proof of Stake is one way of changing the miner's incentives in favor of higher network security.
