Proof of work (PoW) or proof of stake (PoS)? This discussion, which was started by Vitalik Buterin and Ethereum, is as old as the second largest cryptocurrency network.
Now, Cardano (ADA) is at the center of the latest debate about these two methods for securing a decentralized network.
Charles Hoskinson, the founder of the Cardano network and the current president of IOHK, the company in charge of the ADA projects and Ethereum Classic (ETC), has talked about the proof of stake system recently during Unblocked, a crypto conference.
At the event, the scientist has affirmed that the world is going to become more digital every day and this is a process that simply cannot be stopped from happening. According to Hoskinson, the main example of this is all we can see around us and cryptocurrencies are included in this.
He emphasized the importance of creating digital systems that will let people protect their money and that people should be worried about this because they will have to do their part.
His reasons for choosing PoS are, according to him, philosophical differences between the two technologies. Proof of work has a great structure, but several elements of proof of stake are very interesting to him. PoW, he said, is very expensive to participate, while PoS is easier to buy in and more decentralized. Also, it spends less energy.
The CEO affirmed that PoW worked better if you were ok with people who were not really loyal to the network running this process, as he believes that PoS creates more loyalty, since you have to hold the tokens, you can’t just sell them.
This led the more advanced system, PoS, to basically throw away all the expensive work of Bitcoin and to really advance the network.