Disadvantages of Proof of Work and Proof of Stake, Explained

3.

Wherever you are involved in PoW or PoS, the barriers to entry can be quite high.

As we mentioned before, becoming a profitable Bitcoin miner is far from easy. There's fierce competition from giant farms with vast resources, and getting your hands on the latest gear can be quite expensive. Plus, with the cost of electricity rising in many parts of the world and block rewards halving every four years, there's a real danger that you'll end up spending more money than you need. earn some.

Proof of Stake raises a different set of challenges. Ethereum's new network requires validating nodes to stake 32 ETH - and given that it's worth tens of thousands of dollars, it's an investment that will be out of reach for many typical consumers. These funds can also be reduced if technical issues inadvertently mean you are acting against the best interests of the network. While it's possible to be exposed to staking rewards for less, that means trusting centralized providers.

But there may be other approaches. Some blockchain networks offer a mix of masternodes owned by authorized organizations and validator nodes shared among all wallet users. Here, their interests are protected by a node representative verified by the PPoC mechanism. A big advantage here is that everyday users won't have to worry about the technical intricacies of keeping a blockchain running smoothly, but they will still be incentivized to stake.