Proof of work is a method to determine how the blockchain reach consensus. In other words, how can the network be sure that the transaction is valid or not? POW system is based on the advanced form of mathematics called ‘cryptocurrency’. Cryptocurrency uses mathematical equations to validate transactions. In the Bitcoin network, every time a transaction is sent, it takes about 10 minutes for the bitcoin network to confirm it and ‘block’ is created. This block is encrypted with a cryptographic hash equation. For the Bitcoin network to achieve verification without a third party, somebody must use their computational power to solve a cryptographic hash equation, otherwise known as Proof of Work. However, Proof of Work is not a fair system, because those with the most powerful and expensive hardware devices will always have the greatest chance of winning the reward.
As a result, other consensus mechanisms have been created, with one of the most popular being the Proof of Stake model. Proof of Stake was first created in 2012 by two developers called Scott Nadal and Sunny King. Proof of Stake model uses a different method to reach consensus in the network. It still uses cryptographic hash equations to verify transactions in the block but instead of getting a reward by solving equations first, the person who staked more coins in the network has chances to earn more. POS is faster than POW but POS makes rich richer because those who have more money will always have the best chance of winning the reward.
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