POS (Proof-of-Stake)

Proof of stake is indeed another type of validation that users can perform. Where almost everything that is true for proof of work system is also true with a proof of stake system. Where these two validators differ is that proof of stake isn’t a competition. Instead, to decide who gets to provide the proof for the algorithm computers will randomly choose between any user that puts up a bid (or stake) to do so.

In a proof of stake system, any node that chooses to run for a position to validate is called a validator. As opposed to the term “miner”. These validators then lock up a given amount of their corresponding cryptocurrency as a stake. Like a blind in poker, except should they not be chosen to validate, they don’t lose their stake. From this point, some proof of stake systems will randomly select which user will validate the following block, while others will base that selection on how long each user has held their coins, or even some will allow stakeholders to bet on which block will next be added.

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