I'm looking for an explanation of the difference between Proof of Work algorithm and the Proof of Stake and how they relate to Bitcoin and the Blockchain.

Also looking for a fairly simple, non-technical answer. You can get a little technical but I'm not a dev and have no clue how to code.

Peace and Love,

Krypto Kid

3 Answers 3


The following points try to simplify/abstract:

  • A cryptocurrency has its own blockchain to store all the transactions that occurred.
  • A proof of work/stake algorithm are different methods (or algorithms) to achieve consensus on which block will be added next to the blockchain
  • Proof of work (PoW) requires proof that work of some kind occurred. In the case of Bitcoin miners are required to do this work before any of their blocks is accepted by others.
  • Proof of stake (PoS) requires users that have a high stake at the currency (i.e. hold a lot of coins) to determine the next block. This has a high risk of some party achieving monopoly of the currency but there are several methods to prevent that (by allocating random stakeholders to agree on a new block, and others).

The main difference could be summarized in that proof of work requires burning an external resource (mining hardware) while proof of stake does not. Proof of work could be criticized that if price/bitcoin rewards/fees drop then less people have incentives to mine thus the security of the system is reduced. Proof of stake could be criticized that since it is free to stake/add new blocks to the blockchain you could use it to stake several similar coins at the same time (see "nothing at stake" problem in PoS link above).


  • Bitcoin, Litecoin and many others uses the PoW method.
  • NXT, BitShares and others uses the PoS method.
  • Ethereum uses PoW but is scheduled to change to PoS.
  • Peercoin uses a combination of PoW and PoS.
  • I'm good now lol. I now know PoS blockchains are mostly scams, so no need to send me links for dapps on ETH. Thanks
    – KryptoKidz
    Commented Nov 4, 2018 at 18:19

PoS can essentially eliminate the problem of needing the processing power and the energy to finish the PoW algorithm. Overall, PoS seems to be a better solution as it will make the blockchain safer, drastically reduce its power consumption, and reduce the time it takes to make transactions.

We had wrote an article from a non-developer point of view to explain the differences between PoS and PoW. You may refer to this link to see the full article. https://www.dapp.com/article/proof-of-stake-or-proof-of-work-whats-the-difference

Hope you can find this helpful


In a nutshell:

PoW - Requires the proof of some kind of work (in this case hardware processing) to determine the next block PoS - Requires an actual stake of the currency to determine the next block


PoW - Bitcoin PoS - Ethereum (Constantinople fork - prior to this, ETH was PoW)

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