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Proof of Work vs. Proof of Stake: Which Is Better?

Karel Kašpar by Karel Kašpar
August 20, 2022
in Litecoin
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Proof of Work vs. Proof of Stake: Which Is Better?
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Proof of work and proof of stake are the two most popular and oldest consensus mechanisms cryptocurrency projects use. One of the biggest arguments in the crypto space is which of these two consensus mechanisms is better: proof of work or proof of stake?

This is difficult to say because they are different mechanisms with different characteristics. Nonetheless, we will compare the critical attributes of the two mechanisms and see which is best between proof of work and proof of stake.


What Is Proof of Work?

man working on metal with grinder

Proof of work is a decentralized consensus mechanism used for cryptocurrencies that require mining. The first example that comes to mind is Bitcoin, the first cryptocurrency ever created.

Cryptocurrencies using proof of stake need miners to verify transactions by mining blocks, who are then rewarded with new units of the cryptocurrency.

There is a fixed number of transactions that a block can contain, which means that the amount of time taken to mine a block is approximately fixed. The mining process requires the use of computers to solve a mathematical puzzle to mine the blocks.


The process also requires significant amounts of energy to run the computers. This serves as a deterrent to those who wish to manipulate the network by reversing a confirmed transaction, for example. The amount of energy expended and the hardware cost is part of why Bitcoin mining is so expensive.

The older a block gets, the more difficult it becomes to reverse the transactions or change any detail in it. Dogecoin, Litecoin, and Bitcoin Cash are other cryptocurrencies that use proof of work.

What Is Proof of Stake?

three stakes sticking out of water with a bird sitting on one

Proof of stake is a consensus mechanism used in cryptocurrencies that do not use mining but rather rely on staking to secure the network. Investors holding a certain amount of the cryptocurrency are allowed to stake their holdings to secure the network and get rewarded with new units of the cryptocurrency.

The principle behind proof of stake is that if stakers are holding a significant amount of a cryptocurrency, they won’t do anything to harm the network. They are therefore trusted to own a validator node, which validates transactions on behalf of the network.

Proof of stake was created as an alternative to proof of work, which due to its energy demands, is expensive. Validator nodes, on the other hand, can be as simple as a personal computer, which does not require more power than any other computer.

Cryptocurrencies that use proof of stake include Cardano, Binance Coin, and Solana.

Proof of Work vs. Proof of Stake: Security

First, let’s compare the two consensus mechanisms based on security. The primary focus of security for a blockchain is decentralization. Besides this, the difficulty of reversing or altering a transaction makes the network secure.


Bitcoin currently has over 12,000 nodes scattered in 93 countries. It means for miners to launch an attack on the network successfully, they will need a little over 6,000 of the miners to agree, which is a difficult task.

Even if the miners agree to launch an attack, they will need to go back and undo past transactions, an effort that is likely futile, owing to the insane amount of energy required to do this. It has therefore been argued that the high energy consumption in proof of work networks is a feature and not a bug.

For proof of stake, a validator who wishes to launch an attack on the network must have the majority share of the cryptocurrency. This strategy makes such an attack less rewarding to the attacker and serves as a deterrent. In addition, transactions must be verified by a number of validators before it is confirmed.

In terms of security, both proof of work and proof of stake are reliable, and it all depends on how decentralized the network is and the effort or cost it will take to launch an attack on the network.

Proof of Work vs. Proof of Stake: Fees

a hand handing dollar bills to another hand

Using Bitcoin as an example, proof of work cryptocurrencies generally cost more to process transactions. However, several cryptocurrencies use PoW and still process transactions cheaply. Examples include Litecoin and Bitcoin Cash, which sometimes charge a fraction of a cent in transaction fees.

Proof of stake generally has a reputation for costing very little in fees. Examples are Cardano and Solana, which also process transactions at fractions of a cent. In fact, most cryptocurrencies with near zero fees are proof of stake cryptocurrencies.

Proof of stake is the mechanism with lower fees, but the proof of work cryptocurrencies listed above also process transactions at low fees. It, therefore, depends on the cryptocurrency you are using.

Proof of Work vs. Proof of Stake: Transaction Time

picture of an hourglass

Proof of work networks tend to take longer to process transactions. This is called the block time, which varies from project to project. For Bitcoin, the block time averages around ten minutes, while projects like Litecoin broadcast a new block roughly every 2.5 minutes.

Proof of stake cryptocurrencies generally process transactions faster, with some taking only a few seconds to finalize transactions. In addition, the network configuration allows transactions to broadcast much faster, in turn allowing validators to validate much faster.

Proof of Work vs. Proof of Stake: Transaction Throughput

picture of the number five in a tally written with chalk on a black background

Transaction throughput refers to the number of transactions processed per second. While proof of work networks like Litecoin have higher throughput than Bitcoin, they still lag behind proof of stake networks.


Some proof of stake networks process thousands of transactions per second, with prime examples being Avalanche (5,000), Cosmos (10,000), and Tron (2,000).

Clearly, proof of stake networks are better in terms of transaction throughput, and this is why some people argue that it is better since if people want crypto to hit the mainstream and replace or work alongside fiat currency, crypto transactions must have near instant finalization.

Proof of Work vs. Proof of Stake: Verdict

Proof of work consensus has proven to be very effective at securing Bitcoin so far. Bitcoin has never experienced a breach, and there is hardly a future possibility. Bitcoin’s superior security has been attributed to the proof of work mechanism and the substantial decentralization of nodes.

However, other proof of work cryptocurrencies, such as Ethereum Classic (ETC), have suffered several 51% attacks, which shows that although PoW is very secure, it’s not without issue.

In terms of transaction throughput and fees, proof of stake cryptocurrencies are still ahead of proof of work cryptocurrencies. In addition, proof of stake networks do not require the massive amount of energy that proof of work projects require.

Considering all these factors, it can be said that proof of stake is a better consensus mechanism than proof of work.



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