Proof of Stake (PoS) is a consensus mechanism used in many cryptocurrencies. In a PoS system, validators are chosen to create new blocks and secure the network based on the number of coins they hold. The more coins a validator holds, the higher their chances of being chosen to validate blocks and earn rewards.
Unlike Proof of Work (PoW), which relies on computational power to validate transactions, PoS is more energy-efficient, as it doesn’t require miners to solve complex mathematical puzzles. Instead, validators are incentivized to act honestly by holding a stake in the network. If they attempt to act maliciously, they risk losing their stake.
PoS encourages long-term investment in the cryptocurrency and provides a more democratic way of securing the network, as users with larger stakes have more influence. However, some critics argue that PoS systems can be prone to centralization, as wealthy individuals or organizations with large stakes may have disproportionate control over the network.
