What is Proof of Stake?
Proof of Stake (PoS) is a method used by blockchain networks to achieve consensus and validate new transactions. Unlike Proof of Work (PoW), which requires miners to solve complex mathematical problems to verify transactions, PoS selects validators based on the number of coins they are willing to “stake” or lock up as collateral.
In a Proof of Stake system, the more cryptocurrency a person holds, the higher the chances they have of being selected to validate a new block of transactions. This system reduces the energy consumption significantly compared to PoW, making it a more eco-friendly alternative for securing blockchain networks.
Validators in a PoS network earn rewards for confirming transactions and adding them to the blockchain. However, if they attempt to act maliciously, their staked coins can be forfeited, ensuring honest behavior. Some popular cryptocurrencies that use PoS include Ethereum (after its transition from PoW) and Cardano.
Proof of Stake offers a scalable, energy-efficient approach to maintaining the security and decentralization of blockchain systems while encouraging long-term participation from network users.
