·      Fixed coins in existence: There is a limited quantity of coins that are constantly in circulation throughout the network. There is no way to create additional coins—that is, mining is not an option for bitcoin and other PoW-based systems. Keep in mind that there are only a limited number of coins or, in certain situations, "starts with PoW, then shifts to PoS." The purpose of launching PoW is to coins or digital cash within the system.

·      Transaction fee as reward to minters/forgers: Transaction fees are imposed on each transaction as a form of compensation to minters and fraudsters. This is gathered and given to the forging entity of the new block. Keep in mind that the transaction fee is forfeited if the forged block is determined to be fraudulent. Additionally, the validator's stake is forfeited (a process also referred to as cutting).

·      Impracticality of the 51% attack: The 51% attack is impractical because it requires the attacker to own 51% of all the cryptocurrency in the network, which is a costly requirement. This judged the attack to be too costly, time-consuming, and unprofitable. Problems may arise while accumulating such a large portion of all cryptocurrency since there may not be enough money to buy and because the cost of acquiring more and more coins will increase. Additionally, the validator will become reward-negative if it validates incorrect transactions since it will forfeit its stake.

ADVANTAGES OF POS

·      Energy-efficient: Less energy is used because nodes aren't fighting with one another to add new blocks to the blockchain. Additionally, no issue needs to be resolved, unlike with a Proof-of-Work system, which saves energy.

·      Decentralization: A further incentive of exponential payouts is in place to join a mining pool in blockchains such as Bitcoin (which use a Proof of Work system to establish distributed consensus), which makes the blockchain more centralized. Rewards in a Proof-of-Stake system, such as Peercoin, are linear in relation to the stake amount. Thus, joining a mining pool offers no additional benefit at all, which encourages decentralization.

·      Security: To launch an assault on a network, an attacker must possess 51% of the stakes, which can be rather costly. This results in a network that is secure.

WEAKNESS OF A POS MECHANISM

·      Large stake validators: A group of candidates for validation will have a higher probability of becoming validators if they band together and possess a sizeable portion of the entire cryptocurrency. Greater odds result in more picks, which cause an increasing number of forging reward earners to become owners of a sizable portion of the money.

Over time, this could lead to the network being more centralized.

New technology: PoS is only now becoming widely used. Research is being done to identify weaknesses, address them, and make the system workable for real-time money transactions on a live network.