PoW & PoS

Proof of Work is the Cryptocurrency’s Blockchain protection algorithm from different kinds of attacks. This technique provides the verification of calculations by particular miners. The data analyzed by PoW is encrypted in the block and contains link to the previous block on Blockchain and number of transactions recorded in the block. The probability that the system chooses you as a “miner who discovered a new block” depends on your equipment capacity. The more capacity your mining farm has, the higher is your chance to confirm the block. This is the reason why miners started to create special “mining pools”.

Due to the collection of funds of our investors and the presence of the unique mining pool, the company increases the share of profits for each of them. Mining plays one of the key roles in the cryptocurrencies ecosystem. The work of miners ensures all key functions of the network:

transactions confirmation;
calculation of the cryptographic block signature;
network protection from the false data;
support of the network decentralization.

From the commercial point of view, miners get the remuneration for their work in cryptocurrency. It attracted even more private investors and companies to this field. In the opinion of many experts in this sector, mining is one of the most stable and clear niches in the crypto-industry. Besides, many governments of the world have legalized this business through the clear juridical regulations. In the last 5 years, the development of special mining equipment has become more popular due to this fact. A good example of such equipment is ASIC. Such equipment allows FluxOn company to work with cryptocurrencies mining.

While cryptocurrencies become more popular, we observe the gradual growth of the mining activities. This is one of the key factors that persuaded our company to work in this niche.

Among disadvantages, we can mention quick changes of tendencies in cryptocurrencies mining algorithms and their complexity. In simple terms, the mining equipment becomes obsolete over time, and its income reduces. It is related to the two factors - more high-technological equipment appears, and the complexity of cryptocurrencies extraction increases. Therefore, the profitability of mining decreases.

Advantages of Proof-of-Stake:

To expand the attack, you need a lot of funds, therefore it becomes impractical from the financial point of view.
At the same time, if the attacker has a large number of tokens, he will probably suffer from the attack as it will undermine the sustainability of the cryptocurrency.
The algorithm Proof-of-Stake excludes costs for the mining equipment that makes the work with this algorithm much easier and gives a competitive advantage over Proof of Work.

Disadvantages of Proof-of-Stake:

PoS gives additional motivation to accumulate funds on the one account that can affect the decentralization of network.
If a small group collects large funds, it will be able to impose own rules of network work to other participants.
Disputes between Pow and PoS supporters have a long history, however the nature of such contradictions is more theoretical. Nowadays, it’s proved that alliances of Proof of Work and Proof-of-Stake give the best possible result.

To sum up, one can say: the mining and cryptocurrencies niche is being established and recognized by the world community. Two years ago, cryptocurrencies were discussed in narrow circles and now it is a topic for international forums and conferences. This is a strategically important field in the development of many countries, struggle for technologies and subject of competition for many states. Already today, billions of dollars are invested in the development of this field. Many world´s known foundations and private investors participate in the development of this sector. All these facts can only point to one thing – the start of development of the whole industry in a world scales.