The Pros And Cons Of Bitcoin

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As stated previously, there are many different cryptocurrencies whose protocols are very close to that of bitcoin. There are several major areas in which these protocols typically differ.
A. Proof-of-Work vs. Proof-of-Stake
Proof-of-work means that the probability of “mining” a block is proportional to the processing work done by the miner. In a group of miners, coins in a proof-of-work system are split up based on their “hashrates,” or how many attempted hashes they can do a second. As stated previously, Bitcoin uses a proof-of-work system.
Proof-of-stake systems differ from proof-of-work ones because processing power is irrelevant to the probability of mining a block. Instead, the probability is based on how many coins that the miner is in possession of. So, if a miner has one percent of the coins in existence, they can mine one percent of the blocks. Owners of coins, then, become a kind of “stakeholder,” having more mining power when they hold more stakes. Proof-of-stake is often seen as an improvement over proof-of-work for two main reasons. The first is because of lower transaction fees in the long run. If rewards are solely paid with transaction fees in a proof-of-work system, miners may demand a minimum transaction fee as a reward for spending resources. Proof-of-stake discourages this, because solving blocks requires no physical resources. The second reason that benefit that proof-of-stake has over proof-of-work is that it reduces the likelihood of a specific kind of attack called a 51% attack, which involves an attacker who controls greater than 50% of the processing power (more on this later). Proof-of-stake reduces the likelihood of this, because instead of having to possess the majority of processing power, you would ...

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...ctions that they processed. If enough blocks were to be added onto this competing chain, it would take over the main chain, and thus the attackers would be able to collect the majority of the rewards for hashing blocks. More importantly, it would let attackers double spend their coins, as they could effectively undo the transaction and let the coins be spent again. Cryptocurrencies could combat this by making sure that mining pools comprise no more than 25% of the network [13].
VII. CONCLUSION
Fiat currencies are starting to become outdated, and many are looking for a solution to the issues of credit cards. Since the dawn of the internet, people have been kicking around the idea of creating a digital currency. It hasn’t been until recently, however, that this dream has become a reality. It has only been 6 years since the release of the first cryptocurrency, Bitcoin,

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