Proof of Work vs Proof of Stake

Proof of work is not a novel concept and was developed to prevent server abuse. In the form of Bitcoin, it is used as a consensus algorithm. This consensus algorithm is integral for Bitcoin to remain neutral and have no single point of failure. In order for Bitcoin to be produced, it is dependent on miners. These miners produce the cryptocurrency and are rewarded with a block reward for mining the block. In a proof-of-work system, the miner must solve a complicated problem in order to mine the block. As opposed to proof-of-stake, in which miners receive a block reward in the form of transaction fees. There are some problems associated with that, a project will now have a single point of failure and the block is based on a stake, not on merit. Bitcoin, however, relies on computational power and incentivizes miners to solve the problem to get the reward. Another problem with proof-of-stake is that the projects are based on stake, so poorer nations might not be able to participate due to high transaction fees. Proof-of-work coins rely on computational power rather than a stake. The problem associated with proof-of-work is a 51 attack, in which if a computer has more computational power than the other nodes it can take over the network. With computational power, as more people get onto the network, the more difficult it becomes to execute a 51-49 attack.