Comparison on Proof of Work Versus Proof of Stake and Analysis on Why Ethereum Converted to Proof of Stake

Research Article
Open access

Comparison on Proof of Work Versus Proof of Stake and Analysis on Why Ethereum Converted to Proof of Stake

Mingjie Chen 1*
  • 1 University of California San Diego    
  • *corresponding author mic018@ucsd.edu
Published on 13 September 2023 | https://doi.org/10.54254/2754-1169/12/20230624
AEMPS Vol.12
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-915371-67-6
ISBN (Online): 978-1-915371-68-3

Abstract

As approaching the era of Ethereum 2.0, the already unique and innovative cryptocurrency will witness a game-changing upgrade, and in this context, there is a lively discussion of the Proof of Work (PoW) and Proof of Stake (PoS) consensus mechanism. Moving from a PoW consensus mechanism to a PoS consensus mechanism is one of the most anticipated changes in this update. A close comparison of the two most popular consensus mechanisms, PoW and PoS, provides some strengths and drawbacks to these mechanisms. This comparison then becomes the building block to identifying the reasons behind Ethereum's upgrade to Proof of Stake. With the help of the comparison, this paper identifies a few drawbacks of the PoW consensus mechanism that Ethereum is currently facing. This paper finds that Ethereum's shift to PoS has indeed reduced the drawbacks of the Proof of Work consensus mechanism, mainly in terms of energy consumption, transaction cost, and confirmation speed.

Keywords:

proof of work, Proof of Stake, cryptocurrency, Ethereum, consensus mechanism

Chen,M. (2023). Comparison on Proof of Work Versus Proof of Stake and Analysis on Why Ethereum Converted to Proof of Stake. Advances in Economics, Management and Political Sciences,12,200-204.
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References

[1]. N. Lachtar, A. A. Elkhail, A. Bacha and H. Malik, "A Cross-Stack Approach Towards Defending Against Cryptojacking," in IEEE Computer Architecture Letters, vol. 19, no. 2, pp. 126-129, 1 July-Dec. 2020, doi: 10.1109/LCA.2020.3017457.

[2]. Shi, N. A new proof-of-work mechanism for bitcoin. Financ Innov 2, 31 (2016). https://doi.org/10.1186/s40854-016-0045-6.

[3]. Kiayias, A., Russell, A., David, B., & Oliynykov, R. (2017, August). Ouroboros: A provably secure proof-of-stake blockchain protocol. In Annual international cryptology conference (pp. 357-388). Springer, Cham.

[4]. Tasca, Paolo; Tessone, Claudio J. (2019-02-15). "A Taxonomy of Blockchain Technologies: Principles of Identification and Classification". Ledger. 4. doi:10.5195/ledger.2019.140. ISSN 2379-5980.

[5]. Lau, Yvonne (2021-05-27). "Ethereum founder Vitalik Buterin says long-awaited shift to 'proof-of-stake' could solve environmental woes". Forbes. Retrieved 2021-05-29.

[6]. Gervais, A., Karame, G. O., Wüst, K., Glykantzis, V., Ritzdorf, H., & Capkun, S. (2016, October). On the security and performance of proof of work blockchains. In Proceedings of the 2016 ACM SIGSAC conference on computer and communications security (pp. 3-16).

[7]. Reeder, T. (2021, October 1). The truth about bitcoin and Ethereum energy consumption. Medium. Retrieved September 13, 2022, from https://medium.com/gochain/the-truth-about-bitcoin-and-ethereum-energy-consumption-20a325f39b52.

[8]. Boom, D. V. (2022, September 12). Ethereum merge: Crypto's carbon footprint is about to shrink. CNET. Retrieved September 14, 2022, from https://www.cnet.com/personal-finance/crypto/countdown-to-ethereum-merge-what-it-is-and-why-its-important/.

[9]. Ethereum. (2022, September 13). Ethereum Energy Consumption. ethereum.org. Retrieved September 14, 2022, from https://ethereum.org/en/energy-consumption/.

[10]. Sergeenkov, A. (2022, April 13). How to check your ethereum transaction. CoinDesk Latest Headlines RSS. Retrieved September 14, 2022, from https://www.coindesk.com/learn/how-to-check-your-ethereum-transaction/.

Cite this article

Chen,M. (2023). Comparison on Proof of Work Versus Proof of Stake and Analysis on Why Ethereum Converted to Proof of Stake. Advances in Economics, Management and Political Sciences,12,200-204.

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About volume

Volume title: Proceedings of the 2nd International Conference on Business and Policy Studies

ISBN：978-1-915371-67-6(Print) / 978-1-915371-68-3(Online)
Editor：Javier Cifuentes-Faura, Canh Thien Dang
Conference website: https://2023.confbps.org/
Conference date: 26 February 2023
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.12
ISSN：2754-1169(Print) / 2754-1177(Online)

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References

[1]. N. Lachtar, A. A. Elkhail, A. Bacha and H. Malik, "A Cross-Stack Approach Towards Defending Against Cryptojacking," in IEEE Computer Architecture Letters, vol. 19, no. 2, pp. 126-129, 1 July-Dec. 2020, doi: 10.1109/LCA.2020.3017457.

[2]. Shi, N. A new proof-of-work mechanism for bitcoin. Financ Innov 2, 31 (2016). https://doi.org/10.1186/s40854-016-0045-6.

[3]. Kiayias, A., Russell, A., David, B., & Oliynykov, R. (2017, August). Ouroboros: A provably secure proof-of-stake blockchain protocol. In Annual international cryptology conference (pp. 357-388). Springer, Cham.

[4]. Tasca, Paolo; Tessone, Claudio J. (2019-02-15). "A Taxonomy of Blockchain Technologies: Principles of Identification and Classification". Ledger. 4. doi:10.5195/ledger.2019.140. ISSN 2379-5980.

[5]. Lau, Yvonne (2021-05-27). "Ethereum founder Vitalik Buterin says long-awaited shift to 'proof-of-stake' could solve environmental woes". Forbes. Retrieved 2021-05-29.

[6]. Gervais, A., Karame, G. O., Wüst, K., Glykantzis, V., Ritzdorf, H., & Capkun, S. (2016, October). On the security and performance of proof of work blockchains. In Proceedings of the 2016 ACM SIGSAC conference on computer and communications security (pp. 3-16).

[7]. Reeder, T. (2021, October 1). The truth about bitcoin and Ethereum energy consumption. Medium. Retrieved September 13, 2022, from https://medium.com/gochain/the-truth-about-bitcoin-and-ethereum-energy-consumption-20a325f39b52.

[8]. Boom, D. V. (2022, September 12). Ethereum merge: Crypto's carbon footprint is about to shrink. CNET. Retrieved September 14, 2022, from https://www.cnet.com/personal-finance/crypto/countdown-to-ethereum-merge-what-it-is-and-why-its-important/.

[9]. Ethereum. (2022, September 13). Ethereum Energy Consumption. ethereum.org. Retrieved September 14, 2022, from https://ethereum.org/en/energy-consumption/.

[10]. Sergeenkov, A. (2022, April 13). How to check your ethereum transaction. CoinDesk Latest Headlines RSS. Retrieved September 14, 2022, from https://www.coindesk.com/learn/how-to-check-your-ethereum-transaction/.

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