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How does proof-of-work differ from proof-of-stake?

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Proof-of-Work (PoW) and Proof-of-Stake (PoS) are two consensus algorithms used in blockchain networks to achieve agreement on the state of the distributed ledger. Here's a brief comparison of the two:

  1. Basic Principle:
    • Proof-of-Work (PoW): Participants (miners) in the network must solve complex mathematical puzzles to validate and add new blocks to the blockchain. This requires a significant amount of computational power.
    • Proof-of-Stake (PoS): Validators are chosen to create new blocks based on the amount of cryptocurrency they hold and are willing to "stake" as collateral. The more coins a validator holds, the higher the chances of being chosen to validate a block.
 
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