What is mining (POW AND POS)

What is mining (POW AND POS)

By Edy_bcn | Criptonewbies | 18 Jun 2020


Cryptocurrency mining is the way by which new cryptocurrencies are created on the Blockchain. There are two main ways to mine or create cryptocurrencies and they are known as POW (Proof of Work or Proof of Work) and POS (Proof of Stake or Proof of Stake).

Proof of Work or POW mining is developed using specialized computers, which are programmed to solve complex calculations that require a considerable expenditure of time, electricity and technological innovations. Perhaps it sounds a little difficult to understand but it is enough to be clear that these specialized computers are owned by "miners" or people and companies in charge of keeping afloat the existence and integrity of the Blockchain, verifying each of the transactions that run through the Blockchain. and earning small bits of Bitcoin as a reward. The larger the specialized computer network that the miner owns, the greater the reward received in Bitcoin.

 

On the other hand, we have the POS mining , the Proof of Stake (POS) method to create cryptocurrencies.
Although this method has not been widely developed and there is no definitive idea accepted by the whole community, we can find certain generalities that are presented below:In general, the POS method applies to those cryptocurrencies that have been fully mined by their creators.

The POS method generally rewards users with the most cryptocurrencies either in the form of new cryptocurrencies or receiving a small percentage for transaction fees
In general, the POS method consumes much less energy since complex computational calculations must not be solved, but all transactions on the Blockchain are verified by the cryptocurrency retainers and security is based on the Blockchain and its algorithm.

How do you rate this article?


2

0

Edy_bcn
Edy_bcn

Inspiration


Criptonewbies
Criptonewbies

The firts steps in criptoworld

Send a $0.01 microtip in crypto to the author, and earn yourself as you read!

20% to author / 80% to me.
We pay the tips from our rewards pool.