As Bitcoin continues to make (and lose) fortunes worldwide, more and more investors – both amateur and institutional – are looking to the true mechanics of cryptocurrency to gain insight into one of the most volatile investment landscapes in existence.
Proof of Work vs. Proof of Stake: Which is Better? | 3-min crypto
Before Satoshi Nakamoto first published the whitepaper that would usher in a new era of virtual currencies in 2009, the biggest hurdle in creating a digital store of money without a central authority to manage it was security. Unlike traditional currencies like USD or commodities like oil and gold, each unit of Bitcoin was just a string of code.
What would stop malicious actors from easily duplicating the currency? Or rather, from spending the same coins multiple times? And how could anyone trust a public ledger of transactions stored online in a world where news of yet another cyberattack is released every day? The answer to that question was something known as the Proof of Work protocol.
But perhaps not anymore. The Proof of Work protocol made cryptocurrency possible and solved major problems with maintaining the security and integrity of the blockchain — but as Bitcoin and other cryptocurrencies have proliferated and scaled, Proof of Work has also created its fair share of problems.
