- class of consensus mechanism used in most blockchains
- token vested staking which secure creation of new valid blocks
- unlike proof of work
- which relies on computational power to solve complex mathematical problems
- pos assigns the right to validate transactions based on the number of tokens a validator holds
- and is willing to stake as collateral
- validators are chosen randomly
- with the probability of being selected typically proportional to the amount of stake they have
- method aims to be more energy-efficient and scalable compared to proof of work
- pros
- energy efficiency
- significantly reduces the energy consumption associated with mining
- as it doesn’t require extensive computational power
- scalability
- can handle higher transaction volumes more efficiently
- making it suitable for large-scale blockchain networks
- cons
- security
- decentralization
- rich get richer problem in pos which is less impactful in pow
- pow leaves minor ability for securing transactions without significant capital
- fairness
- pos network does not allow to start a network from 0 token supply by design
- in this sense pow is abjectively more fair: enables identical rules for vimputer lifetime
- accsability
- in pos network its impossible to mint tokens without owning any prior tokens
- pow is powerful transmuter enable to bypass existing financial system for onboarding
- proof of stake is implemented in token of leading blockchains