DeFi 10104 September 2021

Proof of Stake (PoS) Explained

Proof of Stake

Summary

  • Proof of Stake (POS) gives mining and validation transactions based on coins held
  • Proof of Stake (POS) was created as an alternative to Proof of Work (POW)
  • Proof of Stake (POS) is less risky on the network

In cryptocurrency, proof of stake is a coin mining concept that allows users to mine or validate blockchain transactions depending on the number of crypto coins they own. This means that the mining power of an individual lies in the number of coins they hold.

Currently, only altcoins use the proof of stake concept, including Nxt, Peercoin, Blackcoin, and ShadowCoin. Proof of stake is a safer alternative to proof of work, where a network attacker would need to own 51% of the stake to take over the market.

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