- Proof of Work is a decentralized mechanism for mining blocks.
- Proof of Stake is more likely to be a centralized mechanism for mining blocks.
Total Supply refers to the total amount of coins or tokens of a specific cryptocurrency that has been created or mined. They are in circulation including those that are currently locked or reserved.
Coins that have been burned or destroyed should not be included in Total Supply. This refers to the coins that are sent to a dead address.Current Supply is the total amount of circulating supply that links to the coins that are referred to the public.
What is Proof of Work?
Proof of Work is a decentralized mechanism for mining blocks.
In the Proof of Work (POW) mechanism, there is a limited amount of coins that can be issued to control the total supply of any coin.
In Proof of Work, there are computers that are connected to a distributed network.These computer nodes run and keep checking all the transactions which are happening in the network. After validation,the reward for checking on the network is rewarded with some coins.
By using Proof of Work, no access is available to anyone for controlling the networkHowever, there is always a way to attach your own network.
An example of a Proof of Work coin is bitcoin.Bitcoin is a coin that is running on Proof of Work and its circulating/Total supply stands at 19,388,768 BTC and its maximum supply is 21,000,000,000.
What is Proof of Stake?
Proof of Stake is more likely to be a centralized mechanism for mining blocks.
In the Proof of Stake (POS) mechanism, there is an infinite amount of coins that can be issued due to which the total supply of any coin can not be controlled.
In Proof of Stake, you can stake your coin to the network for validating transactions to earn a reward.
By using Proof of Stake, the network is centralized and confidential. This network is not accessible to all. With Proof of Stake, there is an unlimited supply and anyone can buy any amount of coins and stake it after. In this way, they can be the governing body of the chain.
An example of a ProofofStake coin is ethereum., Ethereum is a coin that is running on Proof of Stake and its circulating/Total supply is at 120,248,574 ETC and its maximum supply is infinite.
In the Proof of Stake mechanism, we have to make sure that the burning rate of the coin is greater than the mining rate. If the burning rate is not greater than the mining rate, then it will have an unlimited source of coin.
My views on Proof of Work vs Proof of Stake is that The coin which is based on Proof of Work is better than the coin which is based on Proof of Stake but it does not matter that a coin is based on Proof of Work or Proof of Stake if it follows some rules that on Proof of Stake mechanism burning rate should be greater than mining rate and The power of that network should not be on some particular individuals.
Dr. Naveen Singh is an entrepreneur with achievements in sports, academics, healthcare, innovation, blockchain technology, telecommunications, and philanthropy. He is the Co-Founder and Chief Executive Officer (CEO) of Inery, the first layer-1 blockchain programmed for database management. With Inery, he aligns with his vision of a new paradigm for data to empower web3 and complete decentralization.