Proof-of-Work versus Proof-of-Stake: A Comparative Economic Analysis

Kose John, Thomas J Rivera and Fahad Saleh

The Review of Financial Studies, 2025, vol. 38, issue 7, 1955-2004

Abstract: We develop an economic model to compare equilibrium security of Proof-of-Work (PoW) versus Proof-of-Stake (PoS) blockchains. We derive general conditions to determine when PoW blockchains are more secure than otherwise equivalent PoS blockchains and vice versa. Applying real-world parameter values to these conditions, we demonstrate that PoS blockchains are more secure than otherwise equivalent PoW blockchains. Furthermore, we demonstrate that PoS’s security advantage over PoW is particularly salient for high-scale blockchains.

Keywords: G0; O3 (search for similar items in EconPapers)
Date: 2025
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