PoW vs PoS
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.
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