Limitations of Proof of Weight (PoW)
- Not economically friendly: Despite the Proof-of-Weight mechanism having a lot of advantages, Proof-of-weight is not designed to generate passive revenue streams as it is very challenging to attract users towards this model.
- Popularity: Secondly keeping the users incentivized to participate in such networks is very difficult, as they don’t earn rewards. Therefore, it is not that popular or preferred model by the blockchain community to achieve consensus.
Proof of Weight (PoW) Consensus Mechanism in Blockchain
A blockchain is a distributed ledger in which a record of transactions made in Bitcoin, or another cryptocurrency is maintained across several computers that are linked in a peer-to-peer network. The Blockchain ledger is immutable, decentralized, digitized, secure, traceable, and scalable and generates a great sense of trust by incorporating a consensus algorithm. Proof of Weight is a blockchain-based consensus mechanism that gives users a weight based on how much cryptocurrency they are holding. Currently, there are many consensus mechanisms in use but, the most popular of these is Proof of Work (PoW) and Proof of Stake (PoS) mechanisms.
Proof-of-work and proof-of-stake variations remain the most widely used mechanisms for reaching consensus but come with some limitations. Proof of Stake gives an unfair advantage to the rich nodes as more the coins they own more they can earn while Proof of Work consumes a lot of electricity and requires a complex hardware setup. As a result, Proof of Weight has been introduced recently and is different from the Proof of Work and Proof of Stake mechanism.