Hybrid POW-POS

A consensus mechanism needs to be implemented in order to confirm a new group of trustless transactions (‘blocks’) on a distributed ledger called a blockchain.

PoW

Proof of Work (PoW) mining, makes use of high powered computer hardware to deduce a desired sequence of numbers, called a hash, in order to create consensuses on a given blockchain and trying to solve exceptionally difficult math problems. Finding a solution is basically a guessing game, but checking if a solution is correct is easy.This incentivises more computing power to be added to the network, which results in the difficulty being increased, pushing miners to improve the efficiency of their mining systems to maintain a positive economic balance. With this, inflation can also be controlled.

There are also concerns regarding security when it comes to PoW; it is vulnerable to a “51% Attack”, meaning, theoretically, whoever holds 51% of the entire network’s computing power can manipulate the blockchain to their advantage, preventing new transactions from being confirmed, and having the ability to double-spend currency.

PoS

Proof of Stake isn’t about mining, it’s about validating .Proof of Stake (PoS) allows users to mine for rewards using very minimal resources in terms of hardware and software , putting up a stake, or locking up an amount of their coins, to verify a block of transactions.

A positive aspect of a PoS consensus mechanism is that there are more people ‘mining’, however, there is another benefit concentration problem; Individuals who own more cryptocurrencies, or a higher stake, will receive more dividends. This creates a situation where those who can afford to hold the most tokens receive the most rewards, and those who can only afford few tokens may even be wasting resources in the form of electricity, by keeping devices on in order to mine.

PoW+PoS

A PoW/PoS hybrid system is a middle ground between the two. It still requires a lot of computing power for the PoW aspect. However, the amount of computers needed is less because it also requires you to hold some of the underlying cryptocurrency as a stake for the PoS aspect.

Hybrid PoW+PoS censuses mechanism, can maximise user engagement, benefiting both parties. The PoS mechanism also implements a check and balance system. If there is a consensus mismatch in the network, and a miner is suspected of being fraudulent, then the majority of holders can vote their mining to be deemed invalid.

Regarding security, PoW progress needs to be approved by PoS, therefore, PoW miners cannot change the rule by themselves which prevent the chance of 51% attack. This helps the network remain secure.

Ciprian Popa