There are two most common types of consensus protocols, proof of work (PoW) and proof of stake (PoS). A consensus protocol has a few main functions; selecting a block producer, validating the block is correct, and rewarding the block producer. The biggest difference between PoW with Bitcoin and PoS with Cardano is how the block producer is selected.
PoW is based on a physical resource, which requires hardware machines such as ASIC.
PoS is based on a virtual resource. Cardano uses their native token, ADA, to assign which stake pool gets to produce the blocks in the blockchain.
Bitcoin is one of the most secure protocols but what makes it incredibly secure is the physical resources and energy consumption required to take over the network. To distort and manipulate the blockchain, an attacker requires having the majority control of the hashing power. Security comes at a cost and the energy consumption will increase over time as the Bitcoin network grows.
But what if you can have your cake and eat it too? Use a fraction of the energy consumption with the same level of security.
To distort Cardano’s network you would need to control the majority ada. Below is a calculation of the amount of money required to have majority control of Cardano’s network.
Cardano’s protocol goes through a rigorous peer-reviewed process.
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