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Proof of Stake (PoS)

Proof of stake, or PoS, is a consensus mechanism for processing transactions and creating new blocks in a blockchain. With a PoS consensus, miners are replaced by validators, who stake their cryptocurrency to bet on the next block. If the block they bet on is validated, they earn rewards.

Proof of stake (PoS) means that a person can mine or validate block transactions according to how many coins one holds and puts up for staking. The mechanism reduces the amount of CPU work needed to verify transactions and blocks that keep a given blockchain secure.

Moreover, PoS changes the block verification process by using the computers of coin owners. The holders offer their crypto coins as collateral for a chance to validate blocks. An owner that stakes their coins to do this becomes a "validator."

What Are Proof of Stake (PoS) Validators?

Validators are the people on a blockchain who stake their currency to validate blocks and earn rewards. Proof of stake consensus algorithms select a validator for the next block based on various factors, such as how much cryptocurrency the person holds, or how long they’ve been staking.

Validators are selected at random. The PoS system randomizes the entire process, instead of using a competition-based mechanism, like the proof of work (PoW) method does. If you want to know more details, you can read up on the proof of stake model in greater detail here.

What’s the Difference Between Proof of Stake and Proof of Work?

The main difference between PoW and PoS is that PoW requires miners to solve complex mathematical problems in order to validate blocks, while PoS does not.

PoW is a more energy-intensive process, as it requires miners to expend a lot of computational power to find the correct answer to a mathematical problem.

In contrast, PoS requires validators to simply stake their coins to bet on the next block. If they’re selected to validate the block, they earn rewards.

Learn more about the differences between proof of stake and proof of work here