Blockchains have been classified and analyzed on innumerable basis—from privacy to security to the extent of decentralization. One area which has attracted a lot of attention from blockchain critics is the consensus system that a given blockchain employs to achieve a trustful and secured database.
One such consensus system is the Proof of Work (PoW) which is used to create a distributed trustless consensus. Let’s understand this in simpler terms.
What is Proof of Work?
In any blockchain, a consensus algorithm is used to confirm the transactions that take place and to produce new blocks on the chain. PoW is one such consensus algorithm. The most famous application of PoW is the Bitcoin and Ethereum.
The main benefits of a PoW consensus algorithm are protected against DOS attacks. It imposes certain limits on the actions to be performed in the network which need quite some effort to be executed making it essential for the attackers to use a lot of computational power.
Difference from PoS
The PoW is often understood in contrast to PoS (Proof of Stake) where the creator of a new block is chosen deterministically depending on its wealth. PoW is a more fair, for the lack of a better term, as it rewards the first miner who solves each block problem.
Though PoW adds more security to the chains on a block, it requires more computational power and a high computing power hardware.
POW based Cryptocurrencies to invest in
In spite of the high amount of computational power required, the PoW is quite a common and popular consensus algorithm and is employed by a lot of cryptocurrencies. It creates a trustless (no need of a third-party) and a distributed system some of the best among which are:
Ethereum Classic (ETC): a secure, public, trustless, and decentralized platform for running applications. It is a continuation of the original Ethereum platform and employs smart contracts and PoW for successful and smooth running of applications.
Circulating Supply: 101,176,764 ETC
Market Cap: 3274245.65x against ETH
Current Price: 0.031x against ETH
Decred (DCR): a multi-platform digital currency with support for macOS, Windows, and Linux, Decree uses the PoW mining protocol for efficiency and convenience. The users also have the option of joining a mining pool which gives smaller contributors an opportunity to receive consistent pay-outs for their work.
Total Supply: 7,551,846 DCR
Circulating Supply: 7,131,846 DCR
Market Cap: 852185.72x against ETH
Current Price: 0.117x against ETH
ZenCash (ZEN): an anonymous and decentralized platform that offers media, messaging, and money transfer services. The platform is a privacy-based platform and has been built on the TLS integration which protects both the protocol and the data exchanged between communications.
Total Supply: 21,000,000 ZEN
Circulating Supply: 3,599,725 ZEN
Market Cap: 219290.30x against ETH
Currently Trading at: 0.069x against ETH
Komodo (KMD): Komodo is a blockchain platform that offers a highly secure and decentralized hosting of blockchains. Using the Komodo platform, businesses can develop their own open blockchain systems. Komodo employs the delayed PoW as its consensus mechanism which increases the security of layer on every chain on a block.
Circulating Supply: 104,052,004 KMD
Market Cap: 750533.28x against ETH
Currently Trading at: 0.0075x against ETH
Zcash (ZEC): the first open, permission-less cryptocurrency that allows users to exchange information without revealing their identities. Like ZenCash, Zcash is also a privacy-based crypto but the difference is that it provides an optional privacy and therefore the users have a choice.
Circulating Supply: 3,663,506 ZEC
Market Cap: 1,6,34,874.83x against ETH
Currently Trading at: 0.462x against ETH
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Hitesh Malviya is the Founder of ItsBlockchain. He is one of the most early adopters of blockchain & cryptocurrency enthusiast in India. After being into space for a few years, he started IBC in 2016 to help other early adopters learn about the technology.
Before IBC, Hitesh has founded 4 companies in the cyber security & IT space.
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