Consensus Mechanisms: PoW and PoS

Proof of Work (PoW)

Used by Bitcoin. Miners compete to solve a computational puzzle. Winner adds the next block and earns a reward.

• Pros: Battle-tested, highly decentralized
• Cons: Enormous energy consumption

Proof of Stake (PoS)

Used by Ethereum. Validators lock up cryptocurrency as collateral. Protocol selects validators weighted by their stake.

• Pros: 99.95% less energy than PoW, faster finality
• Cons: Newer, different attack vectors