What Is Proof-of-Stake?

Proof-of-Stake is a security method used in cryptocurrencies, which means that the probability that the miner will generate a new block in a blockchain is proportional to the amount of cryptocurrency they own. Consequently, the greater the amount of cryptocurrency held, the higher the chance for the miner to generate a new block.

In some networks using the PoS consensus algorithm, there is no block reward, and miners’ income is limited to transaction fees only. In PoS networks, “mining” is referred to as “forging.”

PoS is the mechanism alternative to PoW, which was first implemented in 2012 in the cryptocurrency called PPCoin (now PeerCoin). The PoS idea lies in solving the problem of PoW related to the large consumption of electricity.