What is Proof-of-Work and Proof-of-Stake Mining?

[DanielMDA]

Hey, so I was researching about mining, because Im a nerd, and I came across a term I couldnt understand: Proof-of-work Mining? What is it? And which is its difference compared to the ol´hardware mining? Any info is appreciated

[vanished]

-moved to mining subforum-

[RadiatingLight]

proof of work is all coins today, where to get a coin, you need to do work (mine).

some coins (etherium) are thinking about transitioning over to proof-of-stake, which is basically proving that you have the GPU, and could mine, but your GPU doesn't actually do any work (no power usage, no heat, etc.)

[DanielMDA]

2 minutes ago, RadiatingLight said:

proof of work is all coins today, where to get a coin, you need to do work (mine).

some coins (etherium) are thinking about transitioning over to proof-of-stake, which is basically proving that you have the GPU, and could mine, but your GPU doesn't actually do any work (no power usage, no heat, etc.)

So, how  does proof of stake work, then?

[Uzume]

15 minutes ago, DanielMDA said:

So, how  does proof of stake work, then?

 

They send vampires randomly to your house, and if any return it proves you have no stake.

[DanielMDA]

2 minutes ago, zzrhardy said:

 

They send vampires randomly to your house, and if any return it proves you have no stake.

But really how does it work

[Catsrules]

https://www.khanacademy.org/economics-finance-domain/core-finance/money-and-banking/bitcoin/v/bitcoin-proof-of-work
 

Check out the comments as well for example this one

 

 

[Uzume]

Proof of stake doesn't mean you prove you *could* mine, but literally means how much stake you have in the game. Ie, Etherium wants to move to proof of stake. That will mean that you "mine" by locking up Etherium you own in master nodes you create. Your hardware just runs these master nodes rather than solving puzzles. You aren't rewarded for the work you do, instead you are rewarded for the amount of Etherium you have (locked away) in these nodes.

 

This will mean the way to "mine" would be simply to buy in and run a node (or multiple nodes). Hardware wise this is much more efficient than the puzzle solving in proof of work mining. For the coin itself, this will incentivise behaviour that drives up the cost of Etherium, ie, buying lots of it and storing it away. It will use much less energy.

 

The downside is it rewards those who already have bulk etherium and makes it impossible to start from scratch without spending a lot of money to buy in. The rich get richer and the poor eat sh_t. Effectively it could be compared to earning interest on your Eth. The more you have, the more you earn.

[DanielMDA]

2 hours ago, zzrhardy said:

Proof of stake doesn't mean you prove you *could* mine, but literally means how much stake you have in the game. Ie, Etherium wants to move to proof of stake. That will mean that you "mine" by locking up Etherium you own in master nodes you create. Your hardware just runs these master nodes rather than solving puzzles. You aren't rewarded for the work you do, instead you are rewarded for the amount of Etherium you have (locked away) in these nodes.

 

This will mean the way to "mine" would be simply to buy in and run a node (or multiple nodes). Hardware wise this is much more efficient than the puzzle solving in proof of work mining. For the coin itself, this will incentivise behaviour that drives up the cost of Etherium, ie, buying lots of it and storing it away. It will use much less energy.

 

The downside is it rewards those who already have bulk etherium and makes it impossible to start from scratch without spending a lot of money to buy in. The rich get richer and the poor eat sh_t. Effectively it could be compared to earning interest on your Eth. The more you have, the more you earn.

Wow, your build is a beast! What kind of work you do so that you need 4 Vega 64s! I have a 1600X and an RX 580 8GB (might get another one and make it CF, alongside a refresh to a 2600X)

[Uzume]

6 hours ago, DanielMDA said:

Wow, your build is a beast! What kind of work you do so that you need 4 Vega 64s! I have a 1600X and an RX 580 8GB (might get another one and make it CF, alongside a refresh to a 2600X)

 

I run seti@home, but occasionally dabble in mining just to test out earning potential. Vast majority of time it just runs seti though.

[DanielMDA]

17 minutes ago, zzrhardy said:

 

I run seti@home, but occasionally dabble in mining just to test out earning potential. Vast majority of time it just runs seti though.

Wow, Im impressed. You should be on the show off your setup! Also, I get that you use Vega, since they are Compute Beasts. Also how much RAM do you have? And as last question, to mine, do you run them on CF (Cross-Fire)?

[Froody129]

7 minutes ago, DanielMDA said:

Wow, Im impressed. You should be on the show off your setup! Also, I get that you use Vega, since they are Compute Beasts. Also how much RAM do you have? And as last question, to mine, do you run them on CF (Cross-Fire)?

You don’t need Crossfire to mine, that’s just for games

[Uzume]

1 minute ago, DanielMDA said:

Wow, Im impressed. You should be on the show off your setup! Also, I get that you use Vega, since they are Compute Beasts. Also how much RAM do you have? And as last question, to mine, do you run them on CF (Cross-Fire)?

 

64GB of ram, that is a bit overspecced but I want to try Einstein@Home soon and that likes memory. With Seti@Home I leave CF on, it doesn't matter whether it is on or off. With it on though I can load up a game and play with the seti running in the background.

 

With mining I turn off CF though. Not sure whether it needs to be off, just out of habit. Mining saturates the GPUs even more than seti so gaming is not an option with it running.

[DanielMDA]

1 minute ago, Froody129 said:

You don’t need Crossfire to mine, that’s just for games

Then you just let them run separately?

[DanielMDA]

Just now, zzrhardy said:

 

64GB of ram, that is a bit overspecced but I want to try Einstein@Home soon and that likes memory. With Seti@Home I leave CF on, it doesn't matter whether it is on or off. With it on though I can load up a game and play with the seti running in the background.

 

With mining I turn off CF though. Not sure whether it needs to be off, just out of habit. Mining saturates the GPUs even more than seti so gaming is not an option with it running.

Do you get paid by running those things?

[Froody129]

Just now, DanielMDA said:

Then you just let them run separately?

Yeah, you just tell the miner which cards to use. Also he has 64gb RAM, as is stated in his sig...

[Uzume]

2 minutes ago, DanielMDA said:

Do you get paid by running those things?

You get paid for mining* but not for Seti@Home. With Seti (and other Boinc projects) you are donating you computer power and electricity usage to the project.

 

*assuming you weren't using Nicehash :0

[DanielMDA]

1 minute ago, zzrhardy said:

You get paid for mining* but not for Seti@Home. With Seti (and other Boinc projects) you are donating you computer power and electricity usage to the project.

 

*assuming you weren't using Nicehash :0

Wow. Also your build is like $5K right? And, just a question, why donate your compute power exactly?

[Uzume]

Just now, DanielMDA said:

Wow. Also your build is like $5K right? And, just a question, why donate your compute power exactly?

 

I brought the parts locally in Australia so the price came to around AUD11500 which is about USD8600. We pay a premium for parts here but it is good to have a local suppler to return things to should a warranty job be required. This build is in no way optimised for mining as it is too expensive for the number of GPUs used.

 

As to why donate rather than mine - well, just like the others in this sub that use Folding@Home, it is for a good cause I am interested in. Though it could be argued that Folding is a more useful cause than Seti. Also I am retired so it is something to do to keep the neurons firing.

[Alpha297]

I found this video pretty helpful.  It's an overview of how crypto currencies work in general.  Proof of work discussion starts about 14:20, but I recommend the whole video.  It's about 30 mins long total but well worth the time.

 

 

[DanielMDA]

21 hours ago, Alpha297 said:

I found this video pretty helpful.  It's an overview of how crypto currencies work in general.  Proof of work discussion starts about 14:20, but I recommend the whole video.  It's about 30 mins long total but well worth the time.

 

 

I have watched a whole lot of videos on the BVlockhain, History of BTC, forking, and mining in general. I just confused "proof of work" with "Proof of Stake" which I still don´t understand in-depth, however, I have the notion that it works like an interest on a bank would.

[DanielMDA]

So, I understand how hardware mining works (Proof-of-Work) but I dont know how Proof of stake works, I just haven`t wrapped up my mind around it. Any info is appreciated?

[Mira Yurizaki]

This article explains it pretty well: https://www.investopedia.com/terms/p/proof-stake-pos.asp

 

Basically:

Quote

The proof of stake (PoS) seeks to address this issue by attributing mining power to the proportion of coins held by a miner. This way, instead of utilizing energy to answer PoW puzzles, a PoS miner is limited to mining a percentage of transactions that is reflective of his or her ownership stake. For instance, a miner who owns 3% of the Bitcoin available can theoretically mine only 3% of the blocks.

 

Also there's https://blockgeeks.com/guides/proof-of-work-vs-proof-of-stake/

[WkdPaul]

Threads merged

[DanielMDA]

2 hours ago, wkdpaul said:

Threads merged

Thank you!