Proof-of-Less-Work Explained
The original intention of Proof-of-Less-Work was to minimize energy usage in comparison to conventional Proof-of-Work in place without compromising security in order to maximize the resulting output.
In Proof of Less Work (PoLW), miners may give away a portion of their Coinbase rewards in exchange for a weight (> 1) for the work (block hash) they have completed. By discovering stronger hashes, the miners engage in both real and virtual mining, as evidenced by the fact that they burn a portion of the coinbase payouts.
Proof of Less Work is based entirely on the principles of Proof of Work. However, the only modification is that PoLW comes with sharding that makes it energy efficient so that miners can start using environmentally friendly mining. The most remarkable example of the coin that follows PoLW is Alephium, which uses less energy. However, the case is totally the opposite with Bitcoin, which utilizes Proof of Work.
It is, therefore, anticipated that for now, the overall cost would stay the same, and there would be less actual mining done in the real world as the workload increases. PoLW and PoW share the same security characteristics with regard to block generation costs.
What is the requirement of Proof-of-Less-Work?
For more than a decade, Proof of Work (PoW) has been operational in various fields. It is a highly reliable consensus algorithm that has been tested over time. But these days, energy consumption is a major priority that has raised energy consumption and environmental concerns, and it can be evidently seen that Proof of Work (PoW) needs help with this.
For this reason, Proof of Less Work (PoLW) was developed in order to lower the traditional Proof of Work’s energy usage without compromising the network’s decentralization. PoLW is the first kind of cost, which is the energy cost, which is an external expense that is paid in the real world and not on the blockchain.
The second is coin burning, commonly known as internal burning since it takes place inside the blockchain. The cost of attacking PoW and PoLW will be the same if you add them both up and compare them using the same metrics as PoW.
PoLW and PoW
In a traditional proof of work method, miners solve hashing problems using energy and crypto mining hardware like GPUs, FPGAs, or ASICs(majorly used); the total cost of mining is the sum of the equipment costs along with the energy cost consumed.
However, talking about PoLW, after a certain point of time, miners in Proof-of-Less-Work burn some coins to convert a fraction of the external cost to internal network cost by subsequently consuming less energy. In the occurrence of Proof of Less Work, mining expenses are internal (burning the coins within the network) as well as external (electricity, mining equipment).
This is how energy consumption is lowered without compromising security or decentralisation of the network because burning coins has a cost. Still, burning energy doesn’t, which reflects that in PoLW, the cost is the same as the cost in PoW but built differently.
Difference Between PoLW and PoW
How is it Different from Proof-of-Stake?
It differs in the first place because the existing coins are burnt to mine new ones instead of being staked to mine additional coins, which runs the danger of being reduced.
The primary difference lies in the fact that miners in Proof of Work (PoLW) still have to cover external expenses such as equipment costs and energy costs associated with hash calculation. It is crucial because, since energy prices cannot be controlled globally, it is impossible to control the hash rate globally and gain an unequal advantage over other users of the network.
The whole cost of Proof of Stake is produced by the network, which makes it risky because it may be less expensive and easier to manipulate the order and validation of transactions and blocks if you have direct or indirect control over a large number of coins (for example, through the use of wrapped tokens or derivatives of staked coins). It would reduce the network’s security.
PoLW is easier to understand and less complicated than PoS since it has been put to the test in the real world by many projects over extended periods, its security model is well-known in the crypto industry, and its applications are more able to survive attacks.
Compared to PoS, PoW appears to distribute coins more fairly. You can only purchase coins in Proof of Stake through market transactions, private or public sales, or both. Additionally, validators might also be far more expensive to run than miners. Since the majority of coins in PoW are often set aside for mining, there is a more significant opportunity for tiny miners to profit.
The post What is Proof-of-Less-Work (PoLW)? appeared first on Asicmarketplace.