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
- security assumption are usually lower with honest majority assumption ~67%
- while classical nakamoto consensus assume 51% acting honestly
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
and others